Voters take a punt on India’s political future

May 11, 2014 6:43 am

Voters take a punt on India’s political future

By Avantika Chilkoti in Mumbai

By the end of Monday, more than 500m people will have voted in India’s vast general election, and opinion polls seem certain that there is a clear favourite to win.

These formal surveys have, however, repeatedly been proven wrong, and those seeking additional advice could do worse than ask one of the country’s unofficial political pundits: the underground bookmakers.

In keeping with popular sentiment, bookmakers are predicting a victory for Narendra Modi, the prime ministerial candidate for the opposition Bharatiya Janata party (BJP). They have stopped taking bets on Rahul Gandhi, after an unexpectedly high volume of wagers against the ruling Congress party hopeful upset their financial calculations.

“It has become big this year because of the Modi fever that’s running around,” one bookie says of gambling on the election. “The scene has exploded.”

Though gambling is largely illegal in India a vast illicit trade exists, valued by KPMG at some $60bn. It is unquestionably dominated by cricket, the national obsession, but political betting remains popular – and tends to command bigger wagers.

“Sports betting is a common man’s game,” one bookmaker says, “the election betting is mainly middle-class and people associated with politics directly or indirectly.”

Currently, bookmakers are offering odds of 35 paise on Mr Modi, which means a Rs100 ($1.67) bet would yield just Rs135 if the BJP favourite is declared prime minister after results are revealed on Friday. By contrast, punters who place Rs100 on Arvind Kejriwal, leader of the fledgling Aam Aadmi party(AAP), will receive a staggering Rs50,100 in the highly unlikely event he leads India’s next government.

One bookmaker claims that he personally had a spread bet in which he sold BJP seats at 241 for Rs5,000 per seat. He stands to lose Rs5,000 for every seat the opposition party wins above 241 seats, but he will win Rs5,000 per seat if the BJP wins 240 seats or less in the 545-member parliament.

“With the general mood today you don’t need a poll to say the BJP is getting more [support] than Congress,” says Rajeeva Karandikar, a statistician and election analyst. “But when you try to put down on 240 to 260 or 280 [seats], it’s really a game of chance.”

Odds are based on everything from grassroots sentiment to the views of the punters themselves.

“If you have a very influential politician as a client and he comes in and has a very big bet on Modi, as a bookie you know Modi has a good chance,” explains George Oborne, managing director at India Bet, a free to play social gaming website. “Ultimately it’s the weight of money that will determine the price of a market.”

With part of the Indian Premier League cricket tournament relocated to Dubai and shrouded in suspicion after a match fixing scandal in 2013, it is peak season for Mumbai bookmakers. But many have moved into nondescript hotels in the suburbs of the city to escape too much scrutiny.

“During the elections actually we go into hiding,” one Mumbai-based bookmaker says, explaining that the police are on high alert during the polls. “Nowadays because of this IPL fixing scam, they [the police] have come down on us big.”

The industry is dominated by a small number of powerful bookmakers setting the odds and taking bets from a string of smaller bookies. Those lower down the pyramid take bets from clients which they hedge with a bookmaker higher up the chain.

Most spend their days on the phone to punters, scribbling incoming bets on reams of paper while another handset runs on speakerphone, blaring odds from a more senior bookie. At the heart of the business are outdated mobile handsets, which are more difficult to track, and a constant supply of new sim cards.

If caught most bookmakers face just a modest fine.

“They [bookmakers] know that they’re going to go scott free but what makes a difference is if they [the police] seize their mobile phones, their money,” explains Jay Sayta, who runs a blog on gambling laws in India. “It stops the business.”

They may be working in an underground industry, but India’s illegal bookmakers are respected for their predictions in both the sporting and political world.

“I believe that a lot of politicians actually do ask what the satta (betting) market rates are,” says Jassi Khangura, former Congress member of the legislative assembly for Qila Raipur, Punjab. “Because the satta market rates are a better reflection of what people think may actually happen”.