Yes, the lottery can be considered a form of exploitation because the government is gaining too much from the taxes. However, one can argue that exploitation can only occur if the person is not aware that they are being exploited. Here, people who buy lottery tickets are 100% aware of all the facts that the government is going to get about 40% of the winnings and the cash payout loss of about 400 million (if we consider the current Powerball).
I think that the lottery is often a way to just take money from those who may not be competent enough to do some extra research. A lot of the money that is collected through the lottery is not rewarded, but is either given to employees with the lottery, different institution or taxed away before it is rewarded.
No, the lottery is not a form of exploitation. It is based on sheer luck. The Powerball Lottery is an exceptional situation - with an unprecedented prize of $1.5B. Should there be a limit for prizes? It's difficult to answer this question when a lottery is played on a national scale. If nobody claims the Powerball prize next time, shouldn't part of it be donated to charity? Should there be a payout restriction for the winner. No, the winner is legally entitled to cash out the entire winning at once. The rules might have to be adjusted to deal with this kind of situation; however, it is unlikely that they'll be such a large prize up for grabs ever again.
The lottery can be a glimmer of hope for many individuals. It can easily be abused by individuals who over spend and lose thousands of dollars trying to win the big jackpot, but if one plays responsibly the lottery can be a fun and equal opportunity at a large pile of money.