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India's PROG Act Hits Three-Week Mark: Offshore Surge, Mass Layoffs, and a Pending Supreme Court Showdown

Three weeks after India's blanket real-money gaming ban took effect on May 1, 2026, enforcement has accelerated, domestic operators are collapsing, and offshore platforms keep gaining ground despite government website blocks.

Category: iGaming News - India · By Growl Games Editorial Team · Thu May 21 2026 · Updated Thu Jul 23 2026

India's PROG Act Hits Three-Week Mark: Offshore Surge, Mass Layoffs, and a Pending Supreme Court Showdown

Table of Contents

1. The Law in Brief

The Promotion and Regulation of Online Gaming (PROG) Act, 2025 and its accompanying PROG Rules, 2026 came into force on May 1, 2026, after being notified by the Ministry of Electronics and Information Technology (MeitY) on April 22, 2026. The law imposes a complete ban on online money games, making no legal distinction between games of skill and games of chance — ending a judicial debate that had run for decades.

The framework creates three legal categories: e-sports (permitted, with formal recognition under the National Sports Governance Act, 2025), online social games (permitted), and online money games(prohibited). A new central regulator, the Online Gaming Authority of India (OGAI), sits under MeitY and is responsible for classification, registration, grievance redressal, and coordination with banks and law enforcement. Penalties for offering or facilitating prohibited games run up to three years' imprisonment and fines reaching ₹1 crore, with repeat-offender fines extending to ₹2 crore.

2. Enforcement: 8,376 URLs and Counting

Enforcement was already running hot before May 1. As of March 28, 2026, MeitY reported in the Lok Sabha that India had blocked or actioned 8,376 URLs tied to online betting and gambling, with more than 4,800 of those takedowns occurring after the PROG Act passed. A single coordinated action in January 2026 blocked 242 illegal betting and gambling websites in one day, lifting the cumulative total above 7,800 at that point.

Investigations sit primarily with state cyber-cell officers, and proceedings are designed to wrap inside a 90-day window. The Directorate General of GST Intelligence (DGGI) has parallel powers and has frozen close to 2,000 bank accounts tied to offshore operators, with roughly 700 offshore entities still on its watchlist.

3. Industry Fallout: Layoffs, Shutdowns, Write-Offs

The domestic real-money gaming (RMG) industry — valued at roughly ₹23,000 crore (US$2.75 billion) at its peak and growing at 28% CAGR — has effectively been wound down. Industry estimates put job losses at around 250,000, with roughly 2,000 RMG-linked startups shutting or pivoting.

Dream11, which counted over 220 million registered users, ended paid contests on August 22, 2025— cash games had accounted for more than 90% of revenue. Hike's "Rush" shut down with over 100 layoffs. Zupee cut roughly 200 employees, about 40% of its workforce, in early 2026. Games24x7, MPL, and WinZO have all reduced headcount. Foreign investor Clairvest wrote off its ₹760 crore (US$91 million) stake in Head Digital Works.

The shock has spread beyond gaming-native firms. On May 6, 2026, Sweden-based Truecallerannounced it would cut 70 jobs — 15% of its workforce — after Q1 revenue fell 27%, citing the loss of RMG advertisers in India as a primary driver. Truecaller shares are down roughly 80% over the trailing twelve months.

4. The Offshore Paradox

The headline policy outcome — protecting users from harm — is being undercut by user migration. A December 2025 study by CUTS International in Delhi NCR found that the use of offshore gambling platforms rose from 68.3% to 82% after the ban, while reported daily activity jumped from 3.4% to 42.3%. In Tamil Nadu, offshore usage grew 15.2% after restrictions tightened. Industry panels estimate the offshore market is worth around US$20 billion, with associated tax leakage exceeding US$4 billion — larger than the legal domestic industry it replaced.

Users are routing through VPNs, mirror domains, and UPI-based deposit channels. MeitY's central data point — that roughly 45 crore (450 million) Indians have been touched by online money gaming with cumulative losses above ₹20,000 crore — is being used by the government to defend the law even as offshore engagement climbs.

5. Supreme Court Challenge Still Pending

The constitutional challenge to PROGA, consolidated before a three-judge bench led by Chief Justice Surya Kant, began hearings on January 21, 2026 and remains live. Petitioners, led by Head Digital Works (operator of A23 Rummy), argue that the law arbitrarily collapses the long-established skill-versus-chance distinction. The Union Government's affidavit defends the ban as a public-interest measure addressing addiction, financial ruin, and platform opacity. With the Act now in force, the industry's last realistic relief route runs through that bench.

6. What Comes Next

Three immediate watch-points for operators, payment processors, and advertisers:

  • OGAI registration windows for e-sports titles are open; certificates run up to 10 years.
  • Payment-rail enforcement is tightening — banks and payment aggregators face direct liability for routing funds to banned platforms, with UPI traffic the focus.
  • Data localisation is now mandatory: user data, traffic logs, and metadata must sit on servers inside India.

For overseas operators targeting the Indian market, the legal exposure now extends to advertisers, intermediaries, and payment facilitators — not just the gaming platforms themselves.

“We believe this change will drive customers to the unregulated market, offering limited consumer protections and providing no contribution to the local economy.”
— Peter Jackson, CEO, Flutter Entertainment, on withdrawing Junglee Games from India

Sources

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