Mr Balls said banded admissions were the fairest
Lottery admissions can be destabilising for children and bad for their welfare, the Schools Secretary, Ed Balls, says.
Mr Balls said he was cautious of full lottery systems for the allocation of secondary school places in England.
Speaking to a committee of MPs, Mr Balls said banded admissions, where a certain number of places were allocated for each ability group, were fairest.
Under the schools admissions code, schools can use lotteries if there is major oversubscription for places.
The revised code came into force in February 2009 to try to make the system fairer for all children and prevent schools discriminating on the grounds of race, parent's income or occupation, or on the basis of an interview with the head teacher.
A lottery system, introduced in Brighton and Hove in 2008, led to protests and appeal from parents whose children did not get their first choice school.
Giving evidence to the cross-party Commons Children, Schools and Families Select Committee on the government's education policy, Mr Balls said he was sceptical of a wholesale move to lotteries.
"The reason I'm personally cautious about lotteries is because... I think the transition from primary to secondary school is a difficult transition and it's good that children move with their peers and their friends from primary to secondary school.
"It being a complete lottery as to who gets to move I think is destabilising to children and bad for their welfare. I think people being able to go to their local school is a good thing."
Mr Balls admitted high house prices around popular schools could create unfairness and said banded admissions were the best way to ensure a comprehensive intake.
The MPs also questioned Mr Balls about the testing of pupils in England and the publication of school league tables.
He said testing was necessary for accountability purposes and said, in an age of the freedom of information, it would be wrong to deny parents, newspapers and websites access to that information.
But Mr Balls admitted league tables could mean the brightest and the weakest pupils were overlooked if schools focused on getting the majority of pupils to the standard level.
"The league table can only ever give you an average measure and of course the league table incentivises the school to care about the children who are just below the score."
Mr Balls said this was why the government planned to introduce the school report card which would give greater information on pupils' rather than institutions' performance.
"The school report card is a change towards a more child-centred approach to accountability which says we want to know that every school is ensuring every child is succeeding and that therefore we will measure schools' performance as the basis of whether all children progress."
Asked why the statistics on child wellbeing were not good for the UK, Mr Balls said: "The scars of the past decades are very deep and take a long time to turn around.
"But I'm really upbeat about the future."