The term "state lotteries" refers to the fact that these companies were originally under the direct control of the state and sold lottery games. Most lotteries originally sold scratchcards and lotto (or draw-based games). It is only in the past three decades that these businesses have started to expand their product portfolios into new verticals, such as sports betting.
Many lotteries have joined the sports betting business in the 21st century, but there are also companies in the "lottery family" whose origins actually lie in sports games. For example, all Nordic lotteries started in sports. As a result, the role of sports games in lotteries varies greatly.
The sweeping changes in gambling legislation in the US market have prompted discussions over how lotteries should react to, for example, online gambling and the possibility of launching sports games alongside scratchcards and lotto.
So far, there's little commonality between different US states' solutions to this conundrum. In many cases, US lotteries have ended up launching operations in digital channels and entering the betting vertical.