A lattice polytope $\mathcal{P} \subset \mathbb{R}^d$ is called a locally anti-blocking polytope if for any closed orthant $\mathbb{R}^d_{\varepsilon}$ in $\mathbb{R}^d$, $\mathcal{P} \cap \mathbb{R}^d_{\varepsilon}$ is unimodularly equivalent to an anti-blocking polytope by reflections of coordinate hyperplanes. In the present paper, we give a formula for the $h^*$-polynomials of locally anti-blocking lattice polytopes. In particular, we discuss the $γ$-positivity of the $h^*$-polynomials of locally anti-blocking reflexive polytopes.