News of the review comes amid growing debate about the lottery and calls for the massive jackpot, which hit a record pounds 42m on 6 January, to be capped. The Commons National Heritage Select Committee will conduct the inquiry.
Its chairman, the Labour MP Gerald Kaufman, said: "We have decided to conduct an inquiry into the lottery but we have not decided on the scope or when it will take place."
The inquiry is expected to consider the jackpot, the way the cash is shared out among the good causes and the profits made by the lottery operators, Camelot.
Among those who could be called to give evidence are Virginia Bottomley, Secretary of State for National Heritage, and Camelot chiefs.
Yesterday the Labour Party gave details of its own inquiry into the lottery. Jack Cunningham, party spokesman on national heritage, is to set up an advisory group to examine the lottery and recommend ways a Labour government might improve it. He welcomed news of the select committee's inquiry and said his own group would start work in the next few days.
Labour will be looking at the management of the lottery, profits made by Camelot, the problem of under-age gambling and the social and economic effects of the lottery.
It will also be studying the impact of the lottery on other parts of the gambling industry such as the pools, the size of the jackpot, the number of prizes and the mechanisms for distributing lottery profits.
Labour has already said that when Camelot's existing contract to run the lottery expires it should be awarded to a non-profit making organisation.
t The winning numbers in last Saturday's lottery draw were 31, 32, 48, 21, 29 and 34. The bonus was 25. No one won the pounds 12.5m jackpot, which will be rolled over to next Saturday.Reuse content