To sell lottery tickets just create an item for the different lottery games. Enter the ticket information (price, description, etc.) and then scan the barcode of the ticket into the stock number field or use your own stock number field and scan the barcode into UPC1 or UPC2 field. Typically RetailEdge users will create a separate department for these items in order to better categorize their lottery sales histories.
At the time of sale when you scan the barcode on the lottery ticket, it will simply enter the item onto the sales screen just like any other item. You would create this item with an Item Type of Non-Stock since you probably don't care about tracking inventory on these and just tracking sales. If you are selling Mega Millions, Powerball, etc. (not pre-printed tickets/scratch offs) as well, you might not have a barcode on them you can use. In this case you should just create a SKU for the item that is easy to sell (P1, MM2, etc.). Then you can enter this stock number to sell the ticket. If these types of tickets come with extras like Megaplier for an extra $1, you could have these items prompt you for the price at the time of sale, allowing the clerk to quickly change the price of the item to account for the adder. This can be set on the Misc tab when creating or modifying the item.
You might want to consider using the touch sales screen and creating a page of lotto numbers if this is the case. Remember you don't need a touch screen to use the Touch Sales Screen, and this can be very useful for these types of items that you sell a lot of and don't have barcodes.
To redeem the lottery you just select Payout from the Register menu or if you are using the Touch Sales Screen, press the Advanced button and then Payout. If you need to track the specific ticket information when paying out you can scan the unique barcode found on many of the tickets in the description field when creating the payout.
You can setup Payout types from the Tools menu.