Police Superintendent Leon Clunis says officers arrested Kingston Deputy Mayor Michael Troupe and St. James Councilor Sylvan Reid.
Clunis said that Troupe's two sons also were arrested in an early Wednesday raid at the men's homes where police seized more than $13,000 and two guns.
The men have not been charged and do not yet have attorneys.
Officials estimate that the lottery scam generate about $300 million a year, up from about $30 million three years ago.
Jamaica police so far have detained 142 people in connection with the scam, but only 19 have been charged.