Detective Chief Inspector Stuart Griffin said: “A number of items were seized during today’s search and arrest operation in the Creggan area.
“This is part of an ongoing investigation into the illegal use of a lottery in Derry.
“The arrested man remains in custody at present.”
Earlier this month Saoradh confirmed on its Facebook page that Junior McDaid House in Chamberlain Street and the homes of three Saoradh activists were raided by police.
The group, which is the political wing of the New IRA, added that “two activists” had been detained as part of the police probe.
A PSNI spokesperson said: “Detectives from the PSNI’s Terrorism Investigation Unit are investigating the illegal use of a lottery in the Derry area.”
Detective Chief Inspector Stuart Griffin of the TIU later added: “This morning we searched five properties in the city in connection with an ongoing investigation into the illegal use of a lottery in the Derry area.
“We seized a sum of money and other items in connection with lottery activity.
“A 31 year old man was arrested and has subsequently been released on bail pending further questioning.
“The investigation is continuing.”