Hundreds of employees of the MTA, United States Postal Service and Sanitation Department participated in the monthly pool, prosecutors said.
They paid $20 per month to select six numbers, and received a "lottery book" with all the participants' selections.
The first participant to have all six of the numbers drawn in the New York State Lottery won the monthly pool, which got as high as $100,000.
Federal prosecutors said the lottery ran for at least the past four years.
Among those charged:
Prosecutors said Monteleone was arrested Thursday morning in Bethlehem, Pennsylvania. He was presented in the Eastern District of Pennsylvania and released on bail.
The remaining eight defendants were arrested in New York City. They were expected to appear in Manhattan federal court later Thursday.
The defendants each are charged with one count of conspiracy to conduct a gambling operation, which carries a maximum potential prison term of five years and a maximum fine of $250,000 or twice the gross gain or loss from the offense.
The hundreds of civil servants who played are not expected to be charged.
NEW YORK AND TRI-STATE AREA NEWS