Former India Test bowler Shanthakumaran Sreesanth and two other players were arrested along with 11 bookmakers on Thursday on suspicion of spot-fixing in the country's ongoing Twenty20 league.
The cricket board immediately suspended the trio, who have been accused of taking money to concede a certain number of runs in a particular over.
Law Minister Kapil Sibal has consulted sports minister Jitendra Singh and the new bill will likely be introduced in the next session of the Indian parliament.
"We have been looking at different ways to control and regulate that part of illegal betting," sports secretary P.K. Deb told Reuters by telephone.
"We have been studying how they deal with it in the UK and Australia and the information we have gathered will be shared with the Law Ministry. We are still some distance away from it (the law)."
Legal sports betting in India is confined to horse racing while illegal betting syndicates thrive in the absence of a law dealing specifically with such corruption in sport.
Media estimates put the amount gambled on the IPL at $427 million (£281m) in 2009.
"We need to have a separate law," Law Minister Sibal said.
"I don't think the Indian Penal Code has match-fixing and spot-fixing as an offence and I don't think the 'offence of cheating' is something that adequately deals with issues of spot-fixing and match-fixing," the law minister said.
"I have requested my ministry to work on such a law ... Once the broad parameters of the law are made out, I'll hand it over to the sports ministry to take it to the cabinet and hopefully introduce it in the coming session of the parliament."
Spot-fixing is manipulation of individual incidents within a match which may not affect the outcome of the contest, most famously exposed in a London trial and jailing of three Pakistan cricketers in 2011.
Former Pakistan captain Salman Butt and team-mates Mohammad Asif and Mohammad Amir were jailed in Britain for their role in a spot-fixing scandal relating to a Test match against England at Lord's in August 2010.
The International Cricket Council subsequently banned the three players for a minimum of five years.