Section 3 in The Lotteries (Regulation) Act, 1998
Title: Prohibition of lotteries
Save as otherwise provided in section 4, no State Government shall organise, conduct or promote any lottery.
Title: Conditions subject to which lotteries may be organised, etc
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;
(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.
Title: Prohibition of sale of ticket in a State
A State Government may, within the State, prohibit the sale of tickets of a lottery organised, conducted or promoted by every other State.
Title: Prohibition of organisation, etc., of lottery
The Central Government may, by order published in the Official Gazette, prohibit a lottery organised, conducted or promoted in contravention of the provisions of section 4 or where tickets of such lottery are sold in contravention of the provisions of section 5.
(1) Where a lottery is organised, conducted or promoted after the date on which this Act receives the assent of the President, in contravention of the provisions of this Act, by any Department of the State Government, the Head of the Department shall be punishable with rigorous imprisonment for a term which may extend to two years or with fine or with both:
Provided that nothing contained in this section shall render such Head of the Department liable to any punishment if he proves that the contravention was committed without his knowledge or that he exercised all due diligence to prevent the commission of such contravention.
(2) Notwithstanding anything contained in sub-section (1), where a contravention under this Act has been committed by a Department of Government and it is proved that the contravention has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any officer, other than the Head of the Department, such officer shall also be deemed to be guilty of that contravention and shall be liable to be proceeded against and punished accordingly.
(3) If any person acts as an agent or promoter or trader in any lottery organised, conducted or promoted in contravention of the provisions of this Act or sells, distributes or purchases the ticket of such lottery, he shall be punishable with rigorous imprisonment for a term which may extend to two years or with fine or with both.