Meghalaya seeks review of 1999 SC decision that banned sale of state lotteries in other states

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Meghalaya government on Friday sought the review of a 1999 decision of the Supreme Court upholding the validity of Section 5 of the Lottery Regulation Act, 1998, reported Live Law.

Under Section 5, a state can ban sale of lotteries in its territory including those organised by other states.  The current law permits only a state government to undertake organising of lotteries.

Appearing for Meghalaya, senior advocate Mukul Rohatgi informed a bench headed by Chief Justice N V Ramana that the hilly north-eastern states are small in size and a major chunk of their revenue used to come from running lotteries.

He said the financial condition of these states have suffered majorly during the pandemic and requested the court to review its earlier decision. A two judge bench of the Supreme Court in B.R Enterprises case (1999) held that a state can run a business in lottery in another state only if the latter too was organizing lotteries.

The decision meant, a state which did not organize lotteries can ban sale of lotteries of other states.

Representing Sikkim, senior advocate A M Singhvi said that the Regulation Act is a central legislation, the subject being covered by List I. However, under Section 5, the Centre has impermissibly delegated the power to regulate lotteries to states though they cannot have any regulatory power over a central list subject in a federal structure like India, he argued.

Currently only a handful of states permit lotteries which predominantly are smaller states from north east India. Punjab, Maharashtra, West Bengal, and Kerala are the other states organising lotteries.

The Chief Justice of India, N.V. Ramana, while inquiring about the stand of the Central Government on the issue, asked how a state could be permitted to invoke a central legislation to ban lotteries.

As reported by Live Law, CJI while stating that in the present case, the government, and not private organisers were running lottery, he inquired about the stand of the Central Government and asked:

“How can the state invoke provisions of the central law and ban the lottery business?…If in federal structure one state bans the lottery of another state and tomorrow one state bans goods from another…can this be permitted or allowed?”