"This result was particularly gratifying as it was achieved against the background of a retail environment that continues to be very challenging," said chairwoman Judy Kirk and chief executive Todd McLeay in the annual report.
"Our business is in good shape - our brands are strong, our sales are high, and our retailers and staff are committed.
"From this base, we now look to the future with a specific strategic objective - to encourage more people to play."
Problem Gambling Foundation chief executive Graeme Ramsey said tough economic times contributed to higher lottery sales.
"I do think there's the impact of the recession and people thinking a big win would cure all their ills."
But the "really big issue" was the incidence of jackpots over a certain size. "When a jackpot gets beyond about $12.5 million it drives sales dramatically... I think we need to rethink those jackpots."
While the incidence of problem gambling directly attributable to lotteries was low, they were increasingly seen as a secondary problem for those with other gambling habits, such as playing the pokies.
Mr Ramsey questioned the Lotteries Commission's ambition to get more people to play.
"I certainly think that in very tough economic times, which look set to continue, the mission of Lotteries to continue to grow gambling does not appear appropriate for a state-owned enterprise."
Of the almost billion-dollar sales figures, $498.4 million was paid out in prizes, including to holders of 28 tickets worth more than $1 million.
In April, a $35.4 million draw was split two ways between tickets bought in Dinsdale and Dannevirke.
A Greymouth couple won $8.4 million in November and said the winning ticket became soaked with sweat from their excitement.
"I wrote the numbers on the top of the ticket and started checking them off - I checked off about two, and then the winning line just seemed to leap out at me, it was surreal," said one of the couple at the time.
"We were too shocked to celebrate. I just had a beer and went to bed, but neither of us slept a wink."
The record single prize in the 2010/2011 year was $28 million won by a pig hunter.
The winner said at the time that his hands shook so much he could not write his name on the ticket.
"We have been down to our last dollar a couple of times this year, so winning this much money is amazing."
The largest ever Lotto prize was $36.9 million won by a Wairarapa syndicate of four family members in 2009.
The Lotteries Commission gave $183.3 million of its profits for grants to hundreds of community, environment, health, arts and other projects.
About $10 million helped to fund the Real New Zealand Festival - 175 public events held at the same time as the Rugby World Cup - and helped to pay for the recording of national anthems for the tournament.
The remainder - about $244 million - was taken up mostly by GST, the lottery duty and retailer commissions. Promotions and salaries were among the smaller costs.
Tomorrow night, more than $11 million in cash and other prizes could be won.
Powerball is set to jackpot to $5 million, and a further $5 million worth of prizes, including cars, boats and a bach, could be shared in the New Year's Eve triple dip draw.
Big spenders
* $925.9m, lottery sales including Lotto, Keno and Instant Kiwi in the 2010/11 year.
Where the money went
* $498.4m in prizes from 26,954,853 tickets.
* $183.3m of profit given for distribution by the NZ Lottery Grants Board.
* $244m taken up by GST, lottery duty and commissions for retailers.
Big winners
* 28 prizes above $1m, including 12 above $2m.
* $28.7m biggest lottery jackpot, won by a Papakura pig hunter last year.
Have your say
How much do you spend a week on Lotto? And what have you won? email newsdesk@nzherald.co.nz
