Lottery Bond is a type of government bond with a rate of return dependent upon a lottery style payout. The issuer redeems a certain number of randomly selected bonds at a premium to their face value. Each bond is similar to a lottery ticket with an equal opportunity to win in monthly draws for cash prizes.
Additional meaning of Lottery Bond:
A lottery bond usually carries a low coupon rate, but the premiums for the winning bonds are higher than coupon payments on regular payout bonds.