Opinion Trading: The Unregulated Frontier Poised to Revolutionize India's Financial Landscape

Legal expert Nikhil Menon emphasizes the urgent need for clear regulation of opinion trading and prediction markets in India. Currently viewed merely as a 'game of skill,' Menon argues for a distinct regulatory framework, drawing parallels with U.S. practices, to boost inclusivity and wealth creation.

In an exclusive interview with ANI, legal expert Nikhil Menon addressed the pressing need for regulatory clarity regarding opinion trading and prediction markets in India, describing them as a substantial yet overlooked financial advancement. Menon criticized the lack of a clear definition within the current Indian legal structure, where these markets are ambiguously categorized as a 'game of skill.' He emphasized the broader global operations of such markets, noting how the U.S. Commodity Futures Trading Commission oversees them, a role comparable to India's SEBI.

Menon highlighted the challenges arising from regulatory ambiguity, which has led to legal conflicts and tax issues for many opinion-based companies. He advocated for a distinct regulatory framework, ideally governed by SEBI or MeitY, to separate this industry from traditional gaming and gambling laws. He pointed out the liberal stance of other countries, besides the U.S., on these markets.

Drawing a comparison with stock trading, Menon noted the inclusivity of prediction markets, stating they offer opportunities based on commonly understood subjects rather than specialized stock market knowledge. He argued that a robust regulatory framework could democratize wealth creation and fortify the digital economy. With considerable transactions already occurring on platforms like Probo, proper regulation could allow further expansion and advantages for participants and the economy.

Concluding, Menon labeled opinion markets as resilient and adaptable trading mechanisms, unaffected by macroeconomic fluctuations like inflation or recession. He underscored their potential to become a significant wealth-building avenue for ordinary citizens with suitable regulatory clarity, consequently enhancing India's digital economy.

(With inputs from agencies.)