Authorities say the lottery was broken up after a sting operation led by the California Lottery's Security and Law Enforcement Division.
Investigators say the seven suspects sold homemade tickets to buyers who were placing bets on numbers in an actual California Lottery game. Lottery spokesman Bill Ainsworth says though there was no evidence any of the bookies cheated their customers, only the state can legally run a lottery.
The seven suspects were arrested Wednesday after an undercover investigation that began last month. A tip in December set off the investigation.