Largely, ek-pe-ek (one against one) trades offering punters the opportunity to double their investments are more numerous. But there is enough incentive for those willing to bet more of their skin in the game: Much like stocks, multi-bagger returns are also promised at the riskier end of the betting spectrum.
Results for the elections held Saturday are expected Tuesday. Exits polls have suggested a hung assembly, with the BJP emerging as the single largest party. Such forecasts, in particular, have made bets a bit more conservative than otherwise.
Bookies expect the BJP to win 96-98 seats in the Karnataka assembly, while the Congress may get 85-87 seats. In market parlance, this means bid price is 96 or 85, while the ask price is 98 or 87.
Ek-pe-ek trades suggest that if one puts Rs 1 lakh cash betting on a BJP victory and the party secures 98 or more, the syndicate would return Rs 2 lakh.
“Gradually, the market is betting more money on BJP,” said Kishan Gopal, a Rajasthan-based market participant. ( Willing to be quoted, is he?) “As the election campaign came to an end, the risk appetite has increased among punters who believe the BJP will finally manage the show, although with the help of a third party.”
Janata Dal (Secular), the party led by former prime minister H D Deve Gowda, could emerge as the kingmaker with 32-35 seats.
If one places a bet for 125 seats out of 224 assembly segments in Karnataka, one can earn as much as Rs 5 lakh against one lakh investment if the assessment comes true. But this rate has come down to Rs 3 lakh after exit poll predictions.
Other rates would include Rs 2 for every rupee against expected 100 or 110 seats for the BJP.
Betting is illegal in India, unlike overseas, where Web sites such as Ladbrokes, Royal Panda, and Netbet offer punters several legal opportunities.
Back home, it is an informal market that turns active during any big political or sporting event. Normally, traders and wealthy investors with surplus money bet on event outcomes to earn quick bucks if their calls go right.
“Sometimes clients approach their private bankers to scout for such opportunities,” said a wealth manager with a domestic firm.
Some of the risk factors include full capital erosion and the lack of a dispute-resolution mechanism, as the punter has no legal recourse.