A State Government may, within the State, prohibit the sale of tickets of a lottery organised, conducted or promoted by every other State.
The primary goal of the Lotteries (Regulation) Act is to bring the lottery industry under government control, ensuring that it operates within a legal framework that protects consumers and promotes responsible gaming practices. By regulating how lotteries are conducted, the Act seeks to prevent fraud and exploitation while allowing states to generate revenue through legitimate lottery operations.
| Act Id | 199817 |
| Act Number | 17 |
| Enactment Date | 1998-07-07 |
| Act Year | 1998 |
| Ministry | Ministry of Home Affairs |
| Enforcement Date | 02-10-1997 |
Simplified Explanation
This section empowers State Governments to prohibit the sale of lottery tickets organized by other states within their own territory. Let’s break it down:
Key Provisions
- Authority to Prohibit:
A State Government can disallow the sale of lottery tickets organized, conducted, or promoted by any other state within its own jurisdiction. - Scope:
- The prohibition applies only to lotteries from other states.
- A state may continue to run its own lotteries while banning the sale of tickets from external lotteries.
Purpose of Section 5
- Preserving State Autonomy:
- Lotteries are a State List subject under the Constitution (Entry 40). This section ensures states retain the power to decide whether to allow or restrict the sale of lottery tickets from outside their jurisdiction.
- Protecting Local Revenue:
- States running their own lotteries may prohibit external lotteries to safeguard their revenue streams.
- By restricting external lotteries, the government can reduce competition and ensure more local participation.
- Reducing Illegal Activities:
- Unchecked sale of external lottery tickets can lead to black market activities or fraud.
- States can ensure that only authorized lotteries operate within their borders.
Legal and Practical Implications
- Uniform Enforcement:
- States can impose a complete or selective ban, creating variation in lottery operations across the country.
- This can lead to a situation where one state’s lottery is legally sold in some states but prohibited in others.
- Impact on Lottery Operators:
- Operators of inter-state lotteries must ensure compliance with state-specific rules.
- Violation of these prohibitions can result in penalties or legal actions under the Act.
- Judicial Precedents:
- The Supreme Court has upheld the right of states to ban external lotteries within their jurisdiction.
- For instance, states like Tamil Nadu and Karnataka have prohibited all forms of lotteries, including those from other states, citing social and economic concerns.
Illustrative Example
If State A (e.g., Kerala) organizes a lottery, State B (e.g., Tamil Nadu) can prohibit the sale of Kerala lottery tickets within Tamil Nadu’s territory. However, Kerala may still sell these tickets in states that permit them (e.g., Maharashtra).
