India Online Gaming Ban Drives Offshore Betting Surge

⏱ 3 min read

India's blanket ban on real-money online gaming, enacted via the Promotion and Regulation of Online Gaming (PROG) Act 2025 in August 2025, was supposed to protect the country's 450 million digital-gaming users from predatory platforms. Instead, fresh data shows the prohibition has redirected hundreds of millions of dollars offshore, flooded regulators with enforcement backlogs, and handed global sportsbook brands a ready-made market of newly unserved Indian bettors.

The PROG Rules 2026, which came into force on 1 May 2026 alongside the parent Act, attempt to plug the gaps by establishing the Online Gaming Authority of India (OGAI) and a payment-chokepoint enforcement model. But survey evidence already shows offshore usage climbing from 68.3% pre-ban to 82% post-ban — with daily platform access jumping from 3.4% to 42% among former real-money gaming users.

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The PROG Act Ban: What It Prohibits

Passed by Parliament in August 2025, the Promotion and Regulation of Online Gaming Act, 2025 introduced a sweeping ban on all online money games — defined as any online game where users pay fees or stakes with a reasonable expectation of monetary gain. The scope is deliberately broad: it covers games based on chance, skill, or any mixture of both.

• Offering, operating, or facilitating an online money game carries penalties of up to three years' imprisonment and fines of ₹1 crore.
• Advertising a prohibited platform is equally criminalised, with penalties reaching five years' imprisonment.
• Banks, payment processors, and other financial institutions are explicitly barred from facilitating transactions linked to prohibited platforms under Rule 19(2) of the 2026 Rules.

The trigger for the legislation was stark: government data estimated that roughly a third of India's population had collectively lost $2.3 billion per year on wagers, while the Enforcement Directorate (ED) froze ₹523 crore in deposits across money-gaming operators in a single operation between 18–22 November 2025.

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OGAI and the 2026 Rules: How Enforcement Works

The PROG Rules 2026, notified on 22 April 2026 and operative from 1 May 2026, created the Online Gaming Authority of India (OGAI) as an attached office of the Ministry of Electronics and Information Technology (MeitY), headquartered in the NCT of Delhi. The Authority chairs the Additional Secretary of MeitY and includes joint-secretary-level representatives from multiple ministries.

Key operational mechanics under the Rules:

• 90-day classification clock: OGAI must determine whether a game qualifies as a prohibited online money game within 90 days of a complete application.
• Two-tier grievance system: users escalate first to the platform (30 days), then to OGAI (30 days), then to the MeitY Secretary as appellate authority (30 days).
• Digital-first enforcement: investigations are primarily conducted in digital mode and targeted for completion within 90 days.
• Site blocking: OGAI coordinates with MeitY under Section 14 of PROGA and Section 69A of the IT Act 2000 to block offshore platforms. As of 1 April 2026, MeitY had actioned 8,376 URLs — more than 4,800 of those after the PROG Act passed.

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The Offshore Surge: Bettors Follow the Money

The ban's most visible unintended consequence is a measurable flight to offshore platforms. A December 2025 CUTS International survey in Delhi NCR found offshore platform usage rose from 68.3% pre-ban to 82% post-ban. A separate January 2026 CUTS survey in Tamil Nadu recorded a further 15.2% rise in offshore usage after the ban. Post-ban, one in four surveyed users said they began using offshore apps for the first time specifically because of the ban.

Spending escalated alongside access. The share of offshore users spending between ₹5,000 and ₹9,999 per month jumped from 7.6% pre-ban to 26.2% post-ban. An entirely new high-spend cohort — users spending over ₹10,000 per month — emerged, now representing 13.5% of active offshore users. A PCA Legal analysis (May 2026) noted offshore usage hitting 91.7% in Maharashtra alone, with users routing payments via WhatsApp, Telegram, VPNs, and mirror domains.

Global operators including Bet365, Betway, 1xBet, Parimatch, and Paddy Power are among the platforms continuing to attract Indian traffic, operating outside domestic consumer protection frameworks. One mirrored version of 1xBet alone recorded approximately 228,000 monthly visits from India despite domain blocks, according to traffic data reviewed by Storyboard18.

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Industry Losses and Legal Challenges

For domestic operators, the transition has been severe. India's real-money gaming segment, valued at $2.3 billion in 2024, fell to $1.3 billion in 2025 amid tightening regulation and was effectively eliminated after the ban. Within the first 90 days of the PROG Act, domestic RMG platforms collectively recorded asset write-downs of more than $840 million.

Major industry players — including Dream Sports (Dream11), Games24x7, and WinZO — have filed consolidated petitions before the Supreme Court of India challenging PROGA's constitutionality under Articles 14 and 19(1)(g) of the Constitution (right to equality and freedom of trade), and disputing Parliament's legislative competence given that "betting and gambling" is historically a State List subject. The Supreme Court deferred the matter to a larger three-judge bench in early 2026, leaving the ban fully enforceable without interim relief for operators.

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What This Means for Operators and Bettors

The table below compares the regulatory environment for operators and bettors before and after PROGA came into force.

Factor	Pre-PROG Act (before Aug 2025)	Post-PROG Act / OGAI (from May 2026)
Legal status of real-money online games	State-level patchwork; skill games largely permitted federally	National ban; all online money games prohibited regardless of skill/chance
Domestic operator licences	Nagaland, Sikkim, Tamil Nadu (TNOGA) skill-game licences available	No licence pathway for real-money games; OGAI registers only esports and social games
Offshore operators	Effectively grey-market; enforcement inconsistent	Explicitly prohibited; MeitY blocks URLs under IT Act Section 69A, payment rails targeted via Rule 19(2)
Bettor risk	Unregulated with some state consumer protections	Criminal exposure for users; zero domestic protection on offshore platforms
Advertising	Restricted but prevalent on IPL streams and digital platforms	Criminalised; offshore ad volume rose from avg. 594/month to 795/month post-ban (ASCI data, FY 2025/26)
Tax revenue	28% GST on deposits; $4B+ estimated annual offshore tax evasion	Domestic tax base eliminated; offshore evasion accelerating

Analysts and legal experts warn that OGAI's payment-chokepoint enforcement model has a structural gap: offshore operators processing payments through foreign institutions or cryptocurrency channels sit beyond its reach. PCA Legal flagged in May 2026 that bilateral mutual legal assistance treaties and financial intelligence-sharing with key offshore jurisdictions are essential to close this gap, but none have yet been operationalised. The practical result is that India's statutory ban currently functions as a barrier to domestic operators while serving as a market-clearing event for unregulated offshore books.

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Sources

Primary sources and official documents are listed first, followed by leading industry and investigative coverage used to cross-check figures.

The ban shifted demand offshore rather than eliminating it.

— Lumikai, State of India Interactive Media Report 2025 · Cited in BusinessToday, March 2026