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LOTTERIES (REGULATION) ACT, 1998
LOTTERIES (REGULATION) RULES, 2010
4. Appointment of distributor or selling agent 18
5. Procedure to prohibit the sale of lottery tickets by the Central Government 18
Lotteries (Regulation) Act, 1998
[17 OF 1998]
An Act to regulate the lotteries and to provide for matters connected therewith and incidental thereto.
Be it enacted by Parliament in the Forty-ninth Year of the Republic of India as follows:—
Short title, extent and commencement.
1. (1) This Act may be called the Lotteries (Regulation) Act, 1998*.
(2)It extends to the whole of India.
(3)It shall be deemed to have come into force on the 2nd day of October, 1997. Definitions.
2. In this Act, unless there is anything repugnant in the subject or context,
(a) “bumper draw of a lottery” means a special draw of lottery conducted on or during any festival or other special occasion wherein the prize money offered is greater than the prize money offered in the case of other ordinary draw of lotteries;
(b) “lottery” means a scheme, in whatever form and by whatever name called, for distribution of prizes by lot or chance to those persons participating in the chances of a prize by purchasing tickets;
(c) “prescribed” means prescribed by rules made under this Act.
COMMENTS
SECTION NOTES
2.1 Definition of Bumper Draw of a Lottery [Section 2(a)]
u “Bumper draw of a lottery” means a special draw of lottery.
u A bumper draw is conducted on or during:
n Any festival, or
*Dated 7-7-1998. 1
n Any other special occasion.
u The prize money offered in a bumper draw of a lottery is greater than the prize money offered in the case of other ordinary draws of lotteries.
2.2 Definition of Lottery [Section 2(b)]
u “Lottery” means a scheme.
u A lottery can exist in whatever form and can be called by whatever name.
u The purpose of a lottery is for the distribution of prizes.
u Prizes are distributed:
n By lot, or
n By chance.
u Prizes are distributed to those persons participating in the chances of a prize.
u Participation in the chances of a prize is achieved by purchasing tickets.
Prohibition of lotteries.
3. Save as otherwise provided in section 4, no State Government shall organise, conduct or promote any lottery
COMMENTS
CASE LAWS
u Lottery Distributors and Bid Rigging - Applicability of Competition Law - In this case, the Competition Commission of India (CCI) initiated an inquiry into alleged cartelization and bid rigging in the tender process for appointing lottery distributors for the Mizoram State Lottery. The tender bids were identical, quoting the minimum permissible rates, raising suspicion of collusive practices. The Gauhati High Court, however, quashed the proceedings on the ground that lottery is res extra commercium and outside the scope of the Competition Act, 2002. The Supreme Court reversed this decision, holding that while lottery business may be regulated under the Lotteries (Regulation) Act, the process of appointing distributors and the services they provide constitute a “service” under section 2(u) of the Competition Act. The Court clarified that anti-competitive practices in the lottery business, such as collusion in tendering, fall squarely within the CCI’s jurisdiction, irrespective of the lottery’s classification as gambling. It ruled that the High Court’s intervention was premature and that CCI proceedings must be allowed to continue. Therefore, the appeals were allowed and the investigation into bid rigging was permitted to proceed — Competition Commission of India v. State of Mizoram AIRONLINE 2022 SC 46.
Conditions subject to which lotteries may be organised, etc.
4. A State Government may organise, conduct or promote a lottery, subject to the following conditions, namely:
(a) prizes shall not be offered on any pre-announced number or on the basis of a single digit;
(b) the State Government shall print the lottery tickets bearing the imprint and logo of the State in such manner that the authenticity of the lottery ticket is ensured; S. 4
(
(
(
(
(
c) the State Government shall sell the tickets either itself or through distributors or selling agents;
d) the proceeds of the sale of lottery tickets shall be credited into the public account of the State;
e) the State Government itself shall conduct the draws of all the lotteries;
f) the prize money unclaimed within such time as may be prescribed by the State Government or not otherwise distributed, shall become the property of that Government;
g) the place of draw shall be located within the State concerned;
(h) no lottery shall have more than one draw in a week;
(
(i) the draws of all kinds of lotteries shall be conducted between such period of the day as may be prescribed by the State Government;
(j) the number of bumper draws of a lottery shall not be more than six in a calendar year;
k) such other conditions as may be prescribed by the Central Government.
COMMENTS
CASE LAWS
u Weekly draw and single digit lottery – Interpretation of scheme - The petitioner challenged the Karnataka State Government’s practice of conducting daily lotteries under various names, alleging that it violated sections 4(a) and 4(h) of the Lotteries (Regulation) Act, 1998, which prohibit prizes based on single digits or pre-announced numbers and restrict a lottery scheme to only one draw per week. The High Court of Karnataka rejected the petition, holding that the government had structured different schemes with unique names and formats for each day, ensuring no one scheme had more than one draw in a week. On the allegation of single-digit-based prizes, the Court observed that although one digit was pre-fixed (0–9), the second digit was randomly drawn and participants needed both digits to win, making it a two-digit scheme. The Court concluded that this method did not breach section 4(a) as prizes were not based on a single digit alone, nor did it violate section 4(h) since each scheme was only drawn once weekly. Thus, the state’s model, though clever, complied with the statutory framework — Ashvin S. N. v. Union of India AIR 2005 KARNATAKA 88.
Prohibition of sale of ticket in a State.
5. A State Government may, within the State, prohibit the sale of tickets of a lottery organised, conducted or promoted by every other State.
COMMENTS
CASE LAWS
u Prohibition of other States’ Lotteries - The appellants, involved in organizing and promoting lotteries under the authority of the State of Nagaland, challenged a notification issued by the State of Kerala prohibiting the sale of other States’ lottery tickets within its territory. Kerala justified the ban under section 5 of the Lotteries (Regulation) Act, 1998. 3
LOTTERIES (REGULATION) ACT 1998 WITH LOTTERIES (REGULATION) RULES 2010 – BARE
ACT WITH SECTION NOTES
AUTHOR : Taxmann's Editorial Board
PUBLISHER : Taxmann
DATE OF PUBLICATION : December 2025
EDITION : 2026 Edition
ISBN NO : 9789371264839
NO. OF PAGES : 24
BINDING TYPE : Paperback
Rs.
75
DESCRIPTION
Lotteries (Regulation) Act 1998 with the Lotteries (Regulation) Rules 2010 [Bare Act with Section Notes] by Taxmann is an authoritative statutory publication that presents the complete legal framework governing the regulation, organisation, prohibition, and control of lotteries in India. This 2026 Edition consolidates the updated text of the principal Act and the allied Central Rules, supplemented with structured section-wise notes, editorial comments, and selective judicial references. The publication serves as a dependable statutory reference for understanding the interaction between lottery regulation, public policy, federal powers, criminal liability, and regulatory oversight under Indian law. By combining the bare legislative text with concise section notes and relevant case law summaries, the book bridges the gap between statutory provisions and their practical application. It enables readers to understand the statutory scheme governing State-organised lotteries and prohibitions, as well as judicial developments on online lotteries, inter-State restrictions, distributor liabilities, and enforcement mechanisms.
This book is intended for the following audience:
• Legal Practitioners, Judges & Law Firms
• Government Departments (Central & State)
• Lottery Operators, Distributors & Selling Agents
• Enforcement & Regulatory Agencies
• Academicians, Law Students & Researchers
• Policy Makers & NGOs
The Present Publication is the 2026 Edition, covering the amended and updated text of the Lotteries (Regulation) Act [Act No. 17 of 1998] and Rules, with the following noteworthy features:
• [Comprehensive Statutory Coverage] Complete and updated text of the Lotteries (Regulation) Act 1998 and the Lotteries (Regulation) Rules 2010
• [Section-wise Notes & Editorial Commentary] Clear explanations highlighting legislative intent, scope, conditions, prohibitions, and operational requirements
• [Selective Case Law Digest] Important Supreme Court and High Court rulings on State powers, prohibition of lotteries, distributor rights, penalties, and federal structure
• [User-friendly Structure] Logical arrangement with section-wise presentation, explanatory notes, and a detailed subject index
• [Latest Legal Position] Incorporates relevant judicial developments in lottery regulation and enforcement
• [Practical Compliance Guidance] Focus on statutory requirements for organising lotteries, appointment of agents, record-keeping, audits, and publication of results
• [Penalties & Enforcement Focus] Detailed coverage of offences, cognisable and non-bailable provisions, company and officer liability, and enforcement powers
