In a method for administering a lottery in combination with a pari-mutuel pool, tickets are generated at point-of-purchase terminals, each ticket including a series of randomly generated or user-selected numbers. A portion of the purchase price of each ticket is allocated to the pari-mutuel pool and is treated as a wager in the pari-mutuel pool, while another portion of the purchase price may be allocated to other pools, including a supplemental payout pool. If the ticket is a winning ticket, a preliminary amount of a payout from the wager in the pari-mutuel pool is determined. In some cases, this preliminary amount is supplemented from monies in the supplemental payout pool.