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Nagaland challenges 2021 Kerala High Court decision on 2018 lottery rules

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The Supreme Court on Tuesday issued notice to the State of Kerala on a Special Leave Petition filed by the State of Nagaland challenging the 2021 Kerala High Court’s order which upheld the power of the State Government to regulate lotteries from other states, reported Live Law.

This is the second case on lottery subject filed in the Supreme Court in last few days. Meghalaya and Sikkim filed a case challenging the 1999 decision of BR Enterprises case which is also heard by the Supreme Court.

The Nagaland case pertains to the challenge against the judgment delivered by the Kerala High Court on May 17, 2021, which upheld the amendments brought to Kerala Paper Lotteries (Regulation) Rules in 2018 to regulate marketing and sale of lotteries organised by other states in their own State.

According to the report on Live Law, Justice Joseph orally remarked that he personally had his own views on the judgement of B.R. Enterprises which held that the state cannot ban other states’ lotteries, unless it banned its own lotteries. To this, the SG urged that he may be able to convince the bench that the law laid down in B.R. Enterprises was the correct law. He stated that–

“Otherwise, you cannot cut competition…Ultimately, the state is in the field of competition. Lottery is a (form of) trading Under Article 286.”

The Kerala High Court in a 2021 decision asserted that Rules allowing the State Government (host state) to take action against the Organising State would be valid, since the Organising State could not unabashedly exploit the subject of the Host State. The Kerala High Court held as follows:

An elected State, answerable to its subjects, certainly owes a duty to its citizens to take such measures as authorized by law and within the limits prescribed by law, to prevent such exploitation, even at the threshold stages. Law being dynamic and capable of adapting to different circumstances, the Rules impugned are only measures for adapting law to varying challenges.

The next date of hearing is on 29 September 2022.

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