Plans are afoot to investigate the new lottery introduced to Bermuda after it was revealed that organisers may not have a licence to operate the system legally.

It is understood the new Caribbean Lottery, a gaming system which was imported from the Caribbean in May, could be in violation of sections under the Lotteries Act - specifically operating without a licence.

And this has been the focus of an investigation spearheaded by the Government's consumer watchdog, the Consumer Affairs Department.

The lottery, similar to the US style lottery, in which a ticket is bought for $1.15 and numbers are picked, promises its participants the chance to win from $3,000 to $500,000, in various games offered.

And it was assured by local operators of Caribbean Lottery that all proper Government channels had been taken, with Government receiving a 20 percent tax.

But Karen Marshall, executive officer of Consumer Affairs, said the investigation has made it as far as the Attorney General's Chamber, with intense scrutiny also coming from Cabinet.

Ms Marshall said her department's alarm bells went off earlier this month about the matter, after seeing advertisements in local newspapers promoting the new gaming system.

"Part of consumer protection is to peruse for ads that we feel can be misleading to the public," she said. "I cannot say too much about it at this time, but the matter is actively under investigation."

And Police are also keeping an eye on the situation, noting that they are ready to step in.

A Police spokesman said: "We're aware that there has been some concern by the public about this new gaming system. We anticipate being in receipt of a formal request to investigate the matter."

The Royal Gazette understands that the Caribbean Lottery is owned by several American and Caribbean businessmen, who have implemented the system in the Leeward Islands, Antigua and other areas of the West Indies.

The lottery operates in Bermuda out of local betting venue, Triple Crown Racing.

When businessman Wendall Brown, who runs Triple Crown Racing was contacted last night, he declined to comment on the matter.

But Shadow Minister of Environment, Gary Pitman, who has crusaded against gaming machines in Bermuda, said he is encouraged that there is an investigation going on.

"It's really a shame," he said. "I would have thought you would have to have a licence to operate. It's sort of a back door approach in getting lotteries in Bermuda."

He added: "If they are going to have lotteries here, it should be for the benefit of Bermuda. If our citizens are spending out money it will benefit the Caribbean, not Bermuda."