The Ministry of Electronics and Information Technology has issued a formal advisory ordering virtual private network providers to prevent their platforms from being used to access banned online betting and prediction market sites, explicitly naming Polymarket in the directive. The move signals a significant escalation in the government's effort to enforce a ban that has, until now, been largely ineffective. At stake is not only the legality of prediction markets in India but the broader question of whether website blocks can mean anything in a world where circumvention tools are freely available.
A Ban That Has Not Held
India's Promotion and Regulation of Online Gaming Act prohibits prediction markets and online betting platforms, and the government has blocked access to several such sites. But the ban has produced a paradox that regulators are now confronting directly: the blocked platforms remain heavily used. Polymarket, a US-based prediction market focused on political and global events, has attracted substantial Indian participation. A single market predicting the outcome of the Tamil Nadu Legislative Assembly election had received bets worth approximately $16 million as of late April, according to a report by The Indian Express. That volume of activity on a supposedly blocked platform makes plain how thin the enforcement has been.
The mechanism enabling this is straightforward. VPNs route a user's internet traffic through servers in other countries, masking the origin of the connection and making geographic IP-based blocks trivial to bypass. For Indian users who wish to access Polymarket or similar platforms, a VPN reduces the legal ban to a minor inconvenience rather than a genuine barrier. The ministry's advisory acknowledges this directly, stating that VPN access is "rendering the website blocking meaningless."
What the Advisory Demands - and Why It Is Complicated
The advisory instructs VPN providers and other intermediaries to make "reasonable efforts" to not host, store, or permit access to unlawful platforms, including Polymarket and similar services. It also flags a specific financial mechanism that has enabled participation despite the ban: users converting Indian rupees into stablecoins such as USD Coin (USDC) to fund their positions on these platforms. This effectively routes activity through cryptocurrency infrastructure, which is itself subject to a separate and evolving regulatory framework in India.
Enforcing such a directive against VPN providers is not straightforward. Many reputable VPN services operate from jurisdictions outside India and are not subject to domestic law in the same way that locally incorporated entities are. IT Secretary S Krishnan, responding to questions last week, described the challenge of distinguishing legitimate VPN use from circumvention of site blocks as "tricky" and called it "an ongoing exercise." VPNs serve a wide range of lawful purposes - corporate data security, privacy protection, access to geographically restricted content that is entirely legal - and any enforcement mechanism that targets them broadly risks collateral consequences for users with no connection to gambling or prediction markets.
Prediction Markets: Information Tools or Regulated Gambling?
The regulatory friction around prediction markets is not unique to India. These platforms occupy an ambiguous legal position in several jurisdictions because they are structurally distinct from traditional gambling. On a prediction market, users buy and sell contracts tied to real-world outcomes - an election result, a central bank decision, a commodity price movement. The price of a contract at any given moment reflects the collective probability assessment of the crowd. Proponents argue this makes prediction markets valuable information aggregators, capable of synthesising dispersed knowledge more efficiently than expert polling or media analysis. Kalshi, another prominent US-based prediction market, has fought extended legal battles with American regulators over whether its products constitute futures contracts under commodity law or something else entirely.
India's approach is less nuanced: the online gaming legislation places prediction markets in the same category as betting, which is prohibited. Yet enforcement has been selective. Kalshi, despite operating in the same space as Polymarket, remains accessible in India without restriction - an inconsistency the ministry has not publicly explained. That asymmetry complicates the government's legal position and raises questions about whether the ban targets specific platforms rather than a category of activity.
What Comes Next
The advisory represents a policy escalation, but it does not resolve the underlying enforcement problem. Directing VPN providers to block access to specific platforms requires either cooperation from services that may have no legal obligation to comply, or technical measures - such as deep packet inspection - that are both costly to implement and contentious in terms of their implications for internet freedom and user privacy. India has previously required VPN providers operating domestically to retain user logs and report them to authorities, a rule that prompted several international VPN companies to withdraw their Indian servers entirely.
The stablecoin dimension adds another layer of difficulty. Financial flows through cryptocurrency wallets that convert rupees into USDC are harder to monitor and intercept than conventional payment channels. If users shift further toward crypto-denominated participation as a response to tightening bank-based restrictions, the enforcement challenge does not diminish - it migrates to a different regulatory domain. The ministry has indicated that violations of the advisory could attract liability under both the Online Gaming Act and relevant sections of the Information Technology Act, but translating that into meaningful enforcement against offshore platforms and distributed financial infrastructure remains an open question.