Legality of State sponsored Lotteries
If section 30 of the Indian contract act , 1872 clearly states Agreements by way of wager void.- Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made. exception being horse race ... Q1. How are the state having their own lottery ? Q2. And if the state fails to give the money due to the person who wins .. he cannot file a suit in the court of law ?
Indeed, according to Section 30 of the Indian Contract Act, agreements by way of wager void. However, if skill plays a substantial part in the result and prizes are awarded according to the merits of the solution, such competitions have been held as not a lottery, which would be categorised as wager. But where prizes depend upon a chance, is a lottery. An agreement for payment of prize money on a lottery ticket came within the category of wagering agreement as contemplated by Section 30. The courts have held neither provisions of a central act nor that of a state act controlling the activities relating to lottery would change the basic nature of the transaction and such contract would fall under Section 30. Thus, if a State is having a lottery, the results of which purely depends on luck, such an competition can be challenged in the court.
A suit for recovery of money won in a competition, which is not illegal, can be filed in a court of law.
Relevant Cases:B.R Enterprises v. State of U.P (1999) 9 SCC 700. Subhash Kumar Manwani v. State of M.P. AIR 2000 MP 109. Sir Dorabji Jamsetji Tata Ltd Edward P. Lance, AIR 1917 Bom 138.
 Coles v. Odhams Press ltd. (1936) 1 KB 416.