India Tightens Rules on Prediction Markets: Polymarket Blocked, Kalshi Facing Possible Restriction
Table of Contents
You might want to know
Is India treating prediction markets as illegal online gambling, and what could that mean for internationally regulated platforms?
How will tighter rules affect crypto and betting-related businesses operating in or serving users in India?
Main Topic
Indian internet users attempting to reach Polymarket, a prominent decentralized prediction market, have encountered a blocked site after a government directive instructed internet service providers to restrict access to certain betting platforms. Visitors to polymarket.com receive standard browser messages such as, "This site can’t be reached. Check if there is a typo in polymarket.com," and refreshing the page does not restore access. The outage follows a government advisory aimed at preventing the domestic use of prediction-market services, and authorities are reported to be preparing similar measures targeting other services.
The Ministry of Electronics and Information Technology (MeitY) issued an advisory on April 25 addressing VPN providers and internet intermediaries, warning that local users were continuing to access online prediction and betting platforms despite existing domestic prohibitions. Following that advisory, MeitY directed internet service providers to terminate or block access to platforms identified as offering prediction-market services. Polymarket was named among the primary targets in the directive.
Kalshi, a prediction-market platform regulated in the United States by the Commodity Futures Trading Commission (CFTC), remains accessible in India for now, but local reporting indicates it could soon be subject to the same blocking order. Citing an anonymous MeitY source, several media outlets report that the agency has already issued a blocking order for Polymarket and is preparing to issue one for Kalshi imminently. Representatives for Polymarket and Kalshi were contacted for comment but had not provided responses at the time of reporting.
Prediction markets allow participants to wager real funds on the outcomes of binary events—ranging from public referendums and election results to financial asset price movements. These platforms attracted heavy interest during the 2024 U.S. presidential election cycle, when they became a popular venue for investors and traders to hedge positions or speculate on political and economic outcomes. In India, however, the government treats activity on such platforms as a form of online money gaming. That classification places these services squarely within the scope of prohibitions under the Promotion and Regulation of Online Gaming Act of 2025, which bans certain types of online wagering and gaming activities.
The action against Polymarket is consistent with New Delhi’s broader, cautious approach to cryptocurrencies and related financial innovations. Policymakers and regulators have emphasized financial stability and capital control, frequently opting for restrictive measures rather than permissive frameworks for nascent digital-asset markets. One consequence has been a policy mix that critics characterize as a "shadow ban": punitive tax measures, including a flat 30% tax on crypto gains and a 1% tax deducted at source (TDS) on crypto transactions, have had the effect of suppressing domestic trading activity.
Beyond taxation, Indian authorities have sought to bring crypto platforms and related services under stringent anti-money laundering (AML) and countering the financing of terrorism (CFT) regimes managed by the Financial Intelligence Unit (FIU). These enforcement priorities, combined with regulatory uncertainty and a generally risk-averse stance from both the government and the Reserve Bank of India, have prompted many startups and exchanges to consider relocation to jurisdictions perceived as more welcoming, such as Dubai or Singapore. The prevailing narrative from Indian authorities frames private cryptocurrencies and certain speculative financial products as posing risks that outweigh their potential benefits, often labeling them as speculative "money games."
Regulatory scrutiny has included formal engagement between lawmakers and crypto firms. India's Parliamentary Standing Committee on Finance convened meetings with major exchanges, including Binance, WazirX and ZebPay, in May to discuss frameworks for regulation and taxation of what the government refers to as virtual digital assets (VDAs). Committee members have voiced concerns about capital outflows from India through crypto channels, and those concerns feed into the broader push for tighter controls and clearer compliance obligations.
Market indicators around the same period showed volatile price action for major cryptocurrencies. Bitcoin briefly dipped below the $77,000 mark before recovering to around $77,700, with analysts attributing the move to leveraged positions being liquidated rather than to a sustainable decline. Observers highlighted the $75,000 to $77,000 range as a significant support band, noting that liquidation activity was distributed between leveraged long and short positions—an indication of the market's complex dynamics amid regulatory and macroeconomic pressure.
The enforcement action against Polymarket underscores the friction that can arise when decentralized, borderless services run up against national legal frameworks. While some jurisdictions have sought to integrate prediction markets into regulated financial markets—often subjecting them to derivatives or betting laws—others treat them as prohibited gambling activities. For platforms that operate globally, this patchwork of rules presents a dilemma: comply with local restrictions and risk undermining their user base and product model, or maintain a universal offering and face blocking, fines, or other enforcement steps in jurisdictions that categorically disallow such services.
From a legal and compliance standpoint, prediction-market operators and crypto firms more broadly face multiple pressure points. These include tax treatment, customer verification and AML/CFT obligations, licensing requirements, and explicit prohibitions embodied in national statutes. In India’s case, the Promotion and Regulation of Online Gaming Act 2025 supplies a statutory basis for blocking services that the government deems disallowed. That statute, coupled with administrative tools such as MeitY’s blocking directives, gives authorities the capacity to curtail access effectively through internet intermediaries.
For Indian users and market participants, the immediate consequence is reduced access to a class of platforms that had begun to serve as venues for trading political risk and other event-driven outcomes. For the broader industry, the episode is a reminder of how national policy choices continue to shape the global digital-asset landscape. Companies that rely on cross-border user bases must navigate a complex compliance environment, balancing the desire for open access with respect for national legal regimes and the operational reality of network-level blocking.
In sum, the blocking of Polymarket in India and the prospect of similar action against Kalshi reflect a continuation of New Delhi’s cautious, control-oriented approach to crypto-adjacent activities. The situation illustrates the interplay between novel financial platforms and established regulatory priorities—where concerns about gambling, capital flows, and financial integrity can prompt decisive enforcement steps that have tangible effects on service availability and market behavior.
Key Insights Table
| Aspect | Description |
|---|---|
| Primary action | Indian authorities issued blocking orders for prediction markets; Polymarket is currently inaccessible within India. |
| Potential next target | Kalshi, a U.S.-regulated prediction market, may face a similar blocking order. |
| Legal basis | Classification as prohibited online money gaming under the Promotion and Regulation of Online Gaming Act 2025. |
| Wider policy context | Part of India’s risk-averse stance toward crypto and related services, including heavy taxation and AML/CFT scrutiny. |
| Industry impact | May drive firms to relocate to friendlier jurisdictions and reduces domestic access to event-driven trading venues. |
Afterwards...
Looking ahead, expect continued regulatory scrutiny of cross-border platforms that facilitate wagering on real-world events. India’s approach—combining statutory prohibition, administrative blocking orders, and stringent tax and AML regimes—will likely remain a significant factor shaping where and how prediction markets and crypto-related services operate. Operators seeking to serve Indian users may need to consider localized compliance strategies or accept restricted access, while policymakers will continue to debate the trade-offs between financial innovation, consumer protection, and capital-control priorities.
For users and market observers, the episode underscores the importance of monitoring legal developments and regulatory guidance. As jurisdictions define boundaries for digital markets and speculative services, platform availability and the contours of permissible activity will evolve, with implications for investors, startups, and global market structure.
