Indian Penal Code, 1860, Section 294A. Keeping lottery office.—Whoever keeps any office or place for the purpose of drawing any lottery [not being [a State lottery] or a lottery authorised by the [State] Govern­ment], shall be punished with imprisonment of either description for a term which may extend to six months, or with fine, or with both. And whoever publishes any proposal to pay any sum, or to deliver any goods, or to do or forbear doing anything for the benefit of any person, on any event or contingency relative or applicable to the drawing of any ticket, lot, number or figure in any such lottery, shall be punished with fine which may extend to one thousand rupees.]

Anything connected with lottery is penal offence  in India. There is no any possibility of attempting to start any venture connected with lottery.

the Supreme Court held that it was constitutionally valid to discriminate between online and paper lotteries as two distinct classes of lotteries in terms of the Lotteries (Regulation) Act and therefore, a state government may ban online lotteries regardless of the fact that it may be conducting paper lottery schemes. The Supreme Court observed that as long as a state does not itself conduct a particular class of lotteries, it may ban within its territory that class of lotteries conducted by other states.

2) In states like Madhya Pradesh ,Tamil Nadu ,Kerala lotteries are banned 

In India, the Public Gambling Act, 1867 and other State regulated laws have been enacted to govern gaming and gambling in India. While these laws deal with the physical gaming and operation of gaming/ gambling houses, no reliance has been placed on the concept of “virtual and online gaming”.

In India, online gaming is not prohibited. Online gaming with stakes or real money is allowed in most of the states of India. Therefore, unless specifically prohibited by the state government, it is not prohibited.

With regards to taxation on the earnings from the gaming activities, in cases where the winnings/prize money by way of gaming activities exceeds the amount of INR 10,000 the TDS provisions are applicable @ 30% without cess.   

If it's attached to online lottery then it may have issues but you need to approach high court for the same

The Public Gambling Act of 1867 is the Indian law that governs all kinds of gambling activities in the country, which should include any lotto betting websites in its spectrum. However, the Public Gambling Act is not applicable to the entire country all at once.

Since gambling is a state government issue, each state has its own laws when it comes to gambling. But most Indian states choose to accept the Public Gambling Act of 1867, nevertheless.

There are 13 Indian states where these government-sanctioned lotteries are completely legal which are 

• Kerala
• Goa
• Maharashtra
• Madhya Pradesh
• Punjab
• West Bengal
• Assam
• Arunachal Pradesh
• Meghalaya
• Manipur
• Sikkim
• Nagaland
• Mizoram

 In these 13 states, the state governments operate an official lottery, tickets to which can only be bought in person and not online. Apart from the state government authorized lotteries in the following states, Indians cannot play the physical lottery in India.

You can safely and legally run any international lottery online by using a lottery site that is based outside India. Since these online lottery tickets are bought outside the country and the actual lottery is also drawn outside India, any Indian citizen can buy tickets from them. As the online lottery is played outside Indian jurisdictions, even people from states in India and other countries where the lottery is considered illegal can play the online lottery.

Dear Client, 

                     Online lottery is not illegal in India and was obviously never referred to in the Public Gambling Act of 1867. Although some states have specifically legalised online lottery sales through the state provider most Indian state legislation does not specifically refer to online lottery ticket sales.Lucky draw legal in India recently the NITI Aayog clarified that the Lotteries Regulation Act, 1998 Section 2(b) states that the lucky draws which are conducted to promote digital transactions do not come under the category of lottery and are thus are not banned.

Thanks &  Regards