**Executive Summary**
This document summarises the Indian government's response to questions raised in Lok Sabha regarding lotteries regulation in the country. The response clarifies that no recent study/assessment of lottery revenue has been conducted. It outlines measures taken by the Ministry of Home Affairs to ensure compliance with the Lotteries (Regulation) Act, 1998 and describes the GST framework applied to lotteries, including changes to rates over time.
**Key Points / Main Content**
* **Studies and Assessments:**
* No recent study or assessment has been conducted regarding revenue generated from lotteries.
* **Compliance and Regulation:**
* The Ministry of Home Affairs issued directives on 02.08.2011, under Section 10 of the Lotteries (Regulation) Act, 1998, stating that State Governments are responsible for compliance.
* Further directives were issued on 18.07.2018, requiring lottery-running States to have online lottery software/hardware certified by STQC.
* Instructions issued on 22.01.2019 prohibited lotteries combining online and paper features.
* Complaints are forwarded to the concerned lottery organizing States.
* **Revenue Information:**
* Information on revenue collected from lottery ticket sales is under the purview of State Governments.
* There is no distinct tariff item or service code for the supply of lottery under GST, so revenue data cannot be provided.
* **GST Framework:**
* Measures are in place to strengthen monitoring and curb illegal operations to protect GST revenue.
* GST is payable at 40% from 22.09.2025 on lottery tickets sold by State Governments to distributors or agents, payable by distributors/agents on a reverse charge basis.
* No GST is collected on the further sale of lottery tickets.
* The GST rate on lottery has been rationalized from 01.03.2020, removing the distinction between lotteries run by State Governments and those authorized by them. The rate was 12% for state run lotteries and 28% for state authorised lotteries.
* From 01.03.2020 until 22.09.2025, a uniform rate of 28% GST was applicable.
**Impact Analysis**
**State Governments**
* **Impact:** Responsible for ensuring compliance with the Lotteries (Regulation) Act, 1998 and are responsible for providing revenue information.
* **Action Required:** To comply with directives from the Ministry of Home Affairs, ensure software/hardware is STQC certified for online lotteries, and stop lotteries combining online and paper features.
**Lottery Distributors/Selling Agents**
* **Impact:** Responsible for paying GST on lottery tickets sold by State Governments, on a reverse charge basis, effective from 22.09.2025, at a rate of 40%.
* **Action Required:** Ensure compliance with the GST framework and remit applicable taxes.
**Ministry of Home Affairs**
* **Impact:** Responsible for issuing directions to state governments.
* **Action Required:** No action specified.
**Ministry of Finance**
* **Impact:** Responsible for overall policy and for answering questions in Lok Sabha.
* **Action Required:** No action specified.
Key Entities Referenced
Lotteries (Regulation) Act, 1998: Act regulating lotteries in India, compliance with which is a central point of inquiry in the document.
GST: Goods and Services Tax, with its revenue implications from lottery sales being a significant concern.
Lotteries (Regulation) Rules, 2010: Rules under the Lotteries (Regulation) Act, compliance with which is a point of inquiry in the document.
Ministry of Home Affairs: Ministry issuing directions related to compliance with lottery regulations.
Ministry of Finance: The ministry to which the parliamentary question is addressed, responsible for lottery regulation.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA
UNSTARRED QUESTION NO. 1237
TO BE ANSWERED ON MONDAY, DECEMBER 08, 2025/AGRAHAYANA
17, 1947 (SAKA)
LOTTERIES REGULATION IN THE COUNTRY
1237. SHRI ANURAG SINGH THAKUR:
Will the Minister of FINANCE be pleased to state:
(a) whether the Government has recently conducted any
study/assessment regarding the revenue generated from lotteries
conducted by different States in the country, if so, the details
thereof;
(b) whether the Government has taken note of the compliance by
States with the provisions of the Lotteries (Regulation) Act, 1998,
particularly with regard to conduct, regulation and prohibition of
lotteries, if so the details thereof along with the details of revenue
collected by the Union and the State Governments from lotteries,
including GST during the last five years, year-wise;
(c) whether instances of violation of Section 4 of the Lotteries
(Regulation) Act, 1998 (relating to conditions for organising
lotteries) and proliferation of unregulated/online lotteries have
been reported in the country, if so, the details thereof; and
(d) the measures being taken by the Government to strengthen
monitoring, curb illegal operations and ensure that legitimate
revenue under the Lotteries (Regulation) Act, 1998 and GST
framework is duly protected?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) No such study/assessment has been conducted recently.
(b), (c) and (d)
Ministry of Home Affairs has issued directions on 02.08.2011 under
Section 10 of the Lotteries (Regulation) Act, 1998 stating that it is
the responsibility of the State Governments to ensure compliance
with the provisions of the Lotteries (Regulation) Act, 1998 and the
Lotteries (Regulation) Rules, 2010 in letter and spirit. Further,
directions have been issued by Ministry of Home Affairs on
18.07.2018 to all the lottery running States to have theirsoftware/hardware used for online lottery certified by
Standardization, Testing and Quality Certification Directorate
(STQC) to ensure integrity of the hardware/software used for
operation of online lottery. Thereafter, instructions have been
issued on 22.01.2019 to all lottery running States that a lottery
combining features of online and paper lotteries is not in
accordance with the Lotteries (Regulation) Rules, 2010 and
therefore, the same be stopped forthwith in case already launched
by any of the lottery organizing State Governments. Taking into
cognizance the responsibility assigned to lottery organizing States
under the Lotteries (Regulation) Rules, 2010, the complaints
received in the Ministry are forwarded to the concerned lottery
organizing States for appropriate action.
The information related to revenue collected from sale of lottery
tickets by the State Governments, falls under the purview of the
concerned State Governments. Further, under GST, there is no
distinct tariff item or service code for the supply of lottery.
Therefore, it is not possible to provide the requested information
regarding GST revenue from lotteries.
Under the GST framework, the following measures are already in
place, to strengthen monitoring, curb illegal operations and ensure
that legitimate GST revenue is protected:
GST is payable @40%, with effect from 22.09.2025, on the
lottery tickets at the stage of their sale by the State
Governments to lottery distributors or selling agents. This is
payable by the lottery distributors or selling agents on a
reverse charge basis.
No GST is collected on further sale of the lottery tickets as
these transactions have been exempted.
The GST rate on lottery has been rationalized from
01.03.2020 onwards wherein the distinction between lottery
run by State Governments and lottery authorized by State
Governments was done away with. Prior to 01.03.2020, lottery
attracted two GST rates, namely, lottery run by State
Governments at 12% and lottery authorized by State
Governments at 28%. From 01.03.2020 till 22.09.2025, lottery
attracted a uniform rate of 28% GST and from 22.09.2025 till
date it attracts a uniform rate of 40% GST.
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