SEBI’s Warning on Opinion Trading Linked to Rs 50,000-Crore Annual Volume, 5 Crore Users?

Regulator Cautions Retail Investors Amid Explosive Growth in Unregulated Betting-Like Platforms

The Securities and Exchange Board of India (SEBI) issued a sharp warning on April 29 against a rapidly growing category of online platforms known as ‘Opinion Trading Platforms’ or ‘Event Outcome Platforms’. These platforms, which allow users to bet on the outcomes of various real-world events ranging from sports and politics to economic indicators and entertainment news, have grown exponentially in recent years. SEBI’s cautionary note was brief—a mere two pages—but its implications were significant, as it underscored growing regulatory unease over a ₹50,000-crore ecosystem with more than five crore Indian users, all operating outside of formal regulatory oversight.

Highlights:

• SEBI issues warning on April 29: Focused on platforms offering event-based betting under the guise of trading.

• Platforms operate outside SEBI jurisdiction: Includes names like Probo, Kalshi, TradeX, Strike, and Polymarket.

• User base and transaction volumes booming: Over five crore Indian users and annual trading volumes exceeding ₹50,000 crore.

What Are Opinion Trading Platforms and How Do They Function?

Betting on Real-World Outcomes Masquerading as Trading

Opinion Trading Platforms let users wager money on whether a specific event or outcome will materialize. These scenarios can span diverse areas such as sports results, political developments, weather events, economic indicators, or even entertainment news. For instance, users may place bets on whether Chennai Super Kings will win their next IPL match or whether India’s GDP growth will exceed 6 percent in Q4. Similarly, one could speculate on whether the US will enter a recession in 2025 or whether a new Pope will be elected within the current calendar year. The platforms provide odds for a binary outcome—‘yes’ or ‘no’—and depending on the public sentiment and bet volumes, users either earn profits or suffer losses.

These platforms mimic the structure and language of financial markets by using terms like “profit,” “loss,” and “trading,” despite having no affiliation with any official exchange or regulator. The resemblance to legitimate trading activity can confuse retail users into assuming a level of safety and legitimacy that doesn’t exist. Some of the most prominent platforms in this space include Probo, Kalshi, TradeX, Strike, Polymarket, and Trago, which have collectively gained widespread popularity across India’s digitally savvy user base.

Highlights:

• Users bet on outcomes of real-world events: Topics include sports, politics, GDP, climate, and celebrity events.

• Binary betting model (Yes/No): Wagers are placed based on public opinion and perceived likelihood of outcomes.

• Platform design mimics stock trading: Language and interface often borrow from financial market terminology.

• Popular platforms include Probo, TradeX, and Kalshi: Rapid growth driven by mobile penetration and influencer marketing.

Why Did SEBI Step In If the Platforms Are Unregulated?

Regulatory Vacuum Raises Red Flags on Investor Protection and Market Misrepresentation

Despite not falling under SEBI’s regulatory purview, the capital markets watchdog felt compelled to issue a public warning because of growing investor participation and a series of risks associated with these platforms. This is not the first time SEBI has cautioned investors about products outside its jurisdiction. Similar warnings were earlier issued against cryptocurrencies, digital gold, algorithmic strategies by unregistered advisors, and so-called “finfluencers” promoting unregulated products.

There were three primary concerns that triggered the warning. First, many of these platforms misleadingly use stock market terminology such as “stop-loss,” “trading,” and “returns,” creating a false perception that the platform is regulated or equivalent to financial markets. Second, being outside the scope of any regulatory body means these platforms offer no investor protection or grievance redressal mechanisms. Users have little recourse if they are defrauded or suspect manipulation of results. Finally, the sector’s rapid expansion in user base and volume alarmed regulators. According to data from the New Indian Consumer Initiative (NICI), these platforms now serve over five crore Indian users and facilitate more than ₹50,000 crore in annual transaction volume.

Further, the Advertising Standards Council of India (ASCI) reported that illegal betting ads constituted 17 percent of all consumer complaints in FY24. This indicates a systemic problem of misrepresentation and aggressive marketing tactics being used by these platforms. Adding to the concern, some platforms falsely claim regulatory backing from bodies like SEBI or the US-based Commodity Futures Trading Commission (CFTC), despite no such recognition.

Highlights:

• Platforms misuse financial market terminology: Misleads users into assuming regulatory legitimacy.

• Lack of investor protection: Users have no official grievance redressal or legal recourse in case of disputes.

• Explosive growth necessitated caution: Over ₹50,000 crore annual volume and 5 crore users sparked alarm.

• ASCI flagged illegal betting ads: Accounted for 17% of consumer complaints in FY24.

• False regulatory claims surfaced: Some platforms falsely cited SEBI or CFTC recognition.

Are These Platforms Legal or Operating in a Grey Zone?

Debate Hinges on the Definition of Gambling vs. Skill-Based Gaming

The legal standing of these platforms is murky and sits in a regulatory grey zone. Most operators argue that they fall under the category of “games of skill” rather than gambling. This distinction is crucial in Indian law. Games of skill are permitted under the Public Gaming Act of 1867 and have been upheld by the Supreme Court, along with various state-specific gaming laws. Conversely, gambling or games of chance are criminal offences under Section 112 of the Bharatiya Nyaya Sanhita, 2023.

The platforms claim that predicting outcomes based on knowledge, analysis, or probability constitutes a skill, not chance. However, critics argue that the structure of these platforms—with real-money wagers and odds manipulation—bears strong resemblance to gambling. Because no single regulator—neither SEBI, RBI, nor the Ministry of Electronics and IT—currently oversees this segment, the platforms continue to operate in a vacuum, drawing millions of users without formal scrutiny.

SEBI’s latest warning thus appears to be the first major attempt to bring public attention to this regulatory blind spot. The regulator has not banned these platforms but has urged retail investors to remain vigilant and avoid participating in unregulated activities that may jeopardize their capital with no legal safeguards.

Highlights:

• Operators claim ‘games of skill’ exemption: Allowed under Public Gaming Act, 1867 and various court rulings.

• Gambling remains a criminal offence: Governed by Section 112 of Bharatiya Nyaya Sanhita, 2023.

• Platforms operate in regulatory vacuum: No oversight from SEBI, RBI, or any designated financial regulator.

• Legal ambiguity remains unresolved: SEBI’s move marks first formal caution, not enforcement.