Do you think there should be a cap on grand prizes? If so, what should it be and what should the state do with the excess funds raised from ticket sales?

No, why would there need to be a cap? If you could become a billionaire just by buying a ticket, then bravo, or do you think there is some reason against it? I can think of none. I do not buy lottery tickets, kind of like throwing my money away and I do not get the thrill of taking a chance to win a pot.
In PA, all revenue generated by our lottery benefits senior citizens (or so they tell us) I do think that is a good idea, because with a little luck we will all be senior citizens some day, and any help would probably be apreciated.

Since there is no tax cap, and since the winnings will be spent and invested, everybody is happy. Yet, the winner is the happiest, of course. (I am keeping quiet, because I live partly on gifts: I do not look a gift horse in the mouth!)

Yes, there should definitely be a cap on how high the lottery goes. Maybe 5 or 10 million at the most. Honestly, why would anyone need 150 million dollars? They don't. Nobody does. Cap it! Give the rest to the public school system and cancer research!