Prediction markets on Polymarket recorded nearly ₹300 crore in trading volume across India's 2026 assembly elections, with individual bettors walking away with gains of up to ₹87 lakh. But here's the catch: these markets aren't legally allowed to operate in India. So how does it work, who's placing these bets, and does collective wisdom actually get elections right? TOI's Chandrima Banerjee breaks it down.
How Do These Markets Operate?
Polymarket, a decentralized prediction market platform, allows users to bet on outcomes of real-world events, including elections. Despite being illegal in India, traders from around the world participate, using cryptocurrency to place bets. The platform uses blockchain technology to ensure transparency and immutability of trades.
Who Are the Bettors?
The bettors are a mix of individual traders, often from outside India, and some Indian users who access the platform via VPNs. The largest winners include anonymous users who correctly predicted election results in key states like Uttar Pradesh, Punjab, and West Bengal.
Collective Wisdom vs. Polls
Prediction markets have a track record of outperforming traditional polls. In 2026, Polymarket accurately predicted the BJP's strong performance in several states, while most polls had underestimated the party's support. However, critics argue that such markets can be manipulated and are not representative of the general population.
Legal and Ethical Concerns
Since these markets are illegal in India, participants risk legal action. The Indian government has not yet taken a strong stance against Polymarket, but experts warn that increased awareness could lead to crackdowns. Ethically, betting on elections raises questions about the integrity of the democratic process.
Future of Prediction Markets
Despite the legal hurdles, prediction markets continue to grow globally. In India, the high volume of trades suggests a strong demand for such platforms. Whether the government will regulate or ban them remains to be seen.
