Alok Kumar, Additional Commissioner of Police (West-Bengaluru), is reportedly personally known to Pari Rajan, who is said to be the kingpin in the scam, and allegedly had telephonic conversations and meetings with him.
Mr Rajan is currently in police custody.
"Additional Commissioner of Police Alok Kumar was suspended pending further investigation by the Criminal Investigation Department (CID) and institution of disciplinary proceedings against him," a Government Order said.
"Mr Kumar had an illegal contact with Mr Rajan, and he not only helped him, but also interfered in the investigation process," the order said.
The action was taken on the basis a recommendation by the DGP, who said "it is unbecoming of senior officer to assist in illegal activities of the accused."
Karnataka chief minister Siddaramaiah said that action is being taken on the basis of the interim report submitted by the CID.
He said "The officer had contact with Rajan; there are evidences in the preliminary report of mobile contacts, and directions given to the Sub Inspector not to arrest him (Rajan). So the Additional Commissioner of Police has been suspended."
Admitting that he knew Rajan, Mr Kumar had, on Saturday, denied his involvement of any kind in the case and demanded a fair investigation.
"I knew him for past four years, but had contact with him only from last two years. I was not aware that he was involved in illegal lottery or any such illegal activities," Mr Kumar told reporters in Bengaluru.
"In my twenty years of service I have not supported or was never involved in any kind of lottery, betting, matka activities. I'm ready to co-operate in any kind of investigation," he said.
"My only prayer is that the investigation should not be targeted only against me; ...I believe that a thorough and fair investigation will happen, and truth will come out," he added.
Mr Siddaramaiah who had held a meeting of senior police officials earlier this month, had ordered a CID probe into the alleged scam. He had also said that government would take strict action against those involved in the scam.
Government had earlier suspended Dharanesh, Superintendent of Police (Lottery Squad) in connection with the case.
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