Election betting in India: Behind the ₹25,000 crore illegal market

India’s state elections are increasingly becoming a high-stakes cash game, with illegal prediction markets and offshore betting platforms like Polymarket reportedly attracting over ₹25,000 crore in wagers across Tamil Nadu, West Bengal, Kerala, Assam, and Puducherry.

While media groups go for exit polls, which are widely anticipated, real-money betting markets are now creating parallel systems where traders speculate on election outcomes using crypto, VPNs, and underground networks.

These platforms, though banned in India, are reportedly being accessed by bettors seeking profits from volatile political forecasts.

Prediction markets

Prediction markets function like betting exchanges where users buy and sell positions based on real-world outcomes — from sports to politics. Globally, platforms like Kalshi in the United States operate under regulatory frameworks, while Polymarket remains a crypto-only offshore platform.

Its popularity surged during the 2024 US presidential election, when traders heavily backed Donald Trump ahead of mainstream polling trends. The logic is apparentlysimple: people risking real money may possess stronger ground intelligence or insider information than traditional pollsters.

However, concerns around manipulation, misinformation, and coordinated market swings remain significant.

State bets

In India, despite legal restrictions, election betting is flourishing underground.

Traditional satta bazars like Rajasthan’s Phalodi market have long operated illegally, but digital platforms have dramatically expanded reach.

What current betting patterns suggest:

Tamil Nadu: Over ₹189 crore traded, with DMK leading at 86%, TVK and AIADMK at around 8% each

West Bengal: Approximately ₹53 crore traded, with TMC at 52–53% and BJP at 47%

Kerala: Lower volume, with Congress-led UDF at 77%

Assam: BJP heavily favoured at 94–97%

Puducherry: AINRC at 96%

Tamil Nadu appears to be the most active market, with traders rapidly adjusting positions based on exit polls and opinion surveys.

Market manipulation

Experts warn that prediction markets may be vulnerable to strategic manipulation. Former Income Tax investigation official PS Sivasankaran told The Federal: “People with better ground information or insider tips bet early. Then through information seeding, leaking false opinion polls or wrong predictions, they swing the market. When DMK was at 60% in January, after exit polls it jumped to 86%. Manipulators bet low, push the price up with false news, and exit with profit without waiting for actual results.”

This resembles stock market pump-and-dump strategies, where false narratives artificially inflate value before insiders cash out.

Sources suggest betting syndicates may even commission independent surveys or distribute fake polling data through WhatsApp and Telegram to influence trader behaviour.

Legal risks

Online betting has been banned in India since 2025. Yet, users reportedly bypass restrictions using VPNs and crypto wallets such as USDC to access offshore platforms.

Sivasankaran warned: “Online betting has been completely banned in India since 2025. Polymarket is an unregulated offshore platform. People are accessing it only through VPN and crypto wallets like USDC. This is fully illegal. Anyone indulging in it is violating Income Tax Act, Black Money Act, PMLA and FEMA. They can face serious penalties and prosecution.”

This raises concerns not just about illegal gambling, but also about money laundering, black money movement, and foreign financial interference.

Political impact

Tamil Nadu police sources reportedly indicate that illegal betting gangs are actively running election wagering through encrypted WhatsApp and Telegram groups. There are also allegations that private business groups have conducted independent opinion polling exercises before placing large-scale bets worth crores.

If true, this would suggest prediction markets are no longer passive reflections of voter sentiment, but potentially active tools capable of shaping perceptions and influencing democratic outcomes.

As election betting scales up, the line between political forecasting and financial manipulation is becoming increasingly blurred.

Prediction markets may offer insights into electoral trends, but when vast sums of illegal money, misinformation, and offshore networks are involved, the democratic implications become serious. Whether these markets merely predict elections or actively distort them remains a pressing concern.

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