India's PROGA Ban Fuels $15B Offshore Betting Black Market

⏱ 3 min read

India's Promotion and Regulation of Online Gaming Act (PROGA), enacted in August 2025 and fully enforced from 1 May 2026, was designed to stamp out real-money gaming — but the data now shows it has done the opposite. An illegal offshore betting market estimated to exceed $15 billion in 2026 has filled the void left by the ban, outcompeting legitimate operators who were either shut down or forced onto free-to-play models overnight.

The scale of substitution is stark. A CUTS International survey found offshore platform usage among Delhi NCR users climbed from 68.3% before PROGA to 82% after it came into force — a 20.1% relative increase. Meanwhile the Advertising Standards Council of India (ASCI) recorded a jump in monthly offshore betting advertisements from an average of 594 in the eight months before PROGA to 795 in the four months after, with 72.14% of all advertising violations in FY26 attributed to offshore betting operators.

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What PROGA Banned

The Promotion and Regulation of Online Gaming Act, 2025 received Presidential assent on 22 August 2025. Its implementing rules — the Promotion and Regulation of Online Gaming Rules, 2026 — were notified on 22 April 2026 and came into force on 1 May 2026.

The Act establishes three categories of online game:

• Online Money Games — entirely prohibited, including advertising, promotion, and payment processing
• Online Social Games — permitted, with mandatory user-safety controls including age verification, time limits, and parental controls
• E-Sports — permitted under the National Sports Governance Act, 2025, with prize money for performance expressly allowed

The prohibition is absolute: no skill-game exception, no licence pathway for real-money play. First-time operator violations carry up to three years' imprisonment and fines of up to ₹1 crore; repeat offences attract fines between ₹1 crore and ₹2 crore. Banks and UPI platforms are designated gatekeepers, prohibited from processing any transaction linked to a classified money game.

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The Black Market Explosion

Prohibition has not suppressed demand — it has redirected it. Offshore operators exploit the gap with low minimum entry amounts as small as ₹300, routing transactions through mule accounts and fake UPI IDs that bypass domestic banking controls. Nithin Kamath, CEO of Zerodha, noted that these apps specifically use India's UPI infrastructure to attract users with low entry amounts that minimise perceived risk.

The black market carries significant risks for Indian bettors: frozen withdrawals, data theft, financial fraud, and no recourse through domestic regulators. Tax authorities estimate the unregulated market costs the exchequer roughly $2.5 billion annually in lost GST revenue — a figure that grows as offshore volumes increase.

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Enforcement Numbers

The Online Gaming Authority of India (OGAI), established as an attached office of the Ministry of Electronics and Information Technology (MeitY) and headquartered in Delhi, has pursued aggressive site-blocking since the law passed. MeitY reported that 8,376 URLs linked to illegal betting and gambling had been actioned by 28 March 2026, with more than 4,800 of those blocks occurring after PROGA's enactment. A single enforcement sweep in January 2026 shuttered 242 platforms; a further 300 were blocked in March 2026.

Despite the volume of blocks, authorities acknowledge that offshore operators evade takedowns within hours by switching domain names and routing payments through fresh mule infrastructure — making enforcement a continuous rolling action rather than a permanent fix.

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Operator Impact

Domestic real-money gaming platforms took immediate and severe damage. Dream11, India's largest fantasy sports operator, recorded a revenue decline of approximately 95% after pivoting to a free-to-play model following PROGA's enactment. Sector-wide, RMG platforms recorded $840 million in asset write-downs within the first 90 days of the ban, according to data compiled by iGaming Business.

Metric	Before PROGA	After PROGA (2026)
Offshore platform usage (Delhi NCR)	68.3%	82%
Monthly offshore betting ads (ASCI avg.)	594	795
Estimated illegal market size	—	$15 billion (2026)
Domestic RMG asset write-downs	—	$840 million (first 90 days)
Annual GST revenue lost (est.)	—	~$2.5 billion

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The Constitutional Challenge

PROGA faces a live legal challenge that adds further uncertainty for operators. Petitions questioning the Act's constitutional validity — on grounds of legislative competence and Article 19(1)(g) (right to trade and profession) — were transferred from the Karnataka, Delhi, and Madhya Pradesh High Courts to the Supreme Court of India. A three-judge bench initially scheduled the matter for 21 January 2026 but proceedings have been deferred, while the enforcement regime already operates at full force.

Until the Supreme Court rules, the framework's constitutional foundation remains sub judice — a material risk for any operator weighing re-entry into the Indian market and a continuing source of uncertainty for the sector at large.

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Sources

Primary and secondary sources used in this report, in order of citation.

These apps use India's UPI to attract users with low entry amounts — the ban has not removed the demand, it has simply removed the protections.

— Nithin Kamath, CEO, Zerodha · Comment on PROGA's market impact, 2026