India's PROGA Ban Locks Kalshi Out of Prediction Markets

⏱ 3 min read

India's PROGA crackdown claimed its highest-profile international casualty this week. On 17 June 2026, Kalshi quietly updated its member agreement to add India to its list of restricted jurisdictions, formally blocking all users domiciled, organised in, or located in the country from trading event contracts. The move brings Kalshi's restricted list to 55 countries and territories — a number that looked like fine print eight months ago and now reads as the central story of the platform's international footprint.

The ban is a direct consequence of India's Promotion and Regulation of Online Gaming Act 2025 (PROGA), which came into force on 1 May 2026. The law imposed a blanket prohibition on all "online money games" and created the Online Gaming Authority of India (OGAI) under the Ministry of Electronics and Information Technology (MeitY) to police compliance. Prediction markets — platforms where users stake real money on the outcome of future events — were swept into the prohibited category, branded by Indian regulators as a form of "digital satta." The law carries criminal exposure including possible imprisonment for anyone who facilitates or finances illegal online gambling, giving operators little room to delay.

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What PROGA Does and Why It Matters

The Promotion and Regulation of Online Gaming Act 2025 was passed by both houses of Parliament — the Lok Sabha and Rajya Sabha — in August 2025 and received Presidential assent the same month. It replaces the fragmented, state-level patchwork that previously governed online gaming with a single federal framework. PROGA draws a three-way classification:

• E-sports — skill-based competitions; permitted.
• Social games — non-monetary play; permitted.
• Online money games — any product where users pay to participate with a reasonable expectation of monetary gain; completely prohibited.

Under that framework, prediction markets have no viable classification. A user stakes money on an uncertain outcome and receives a financial return if correct — that is unambiguously an online money game under PROGA, regardless of how operators frame it. The statute's reach extends beyond the platforms themselves: banks and financial institutions are barred from processing payments to prohibited platforms, and advertisers face the same criminal exposure as operators.

The legislation was motivated by data showing that roughly one-third of India's population had lost an estimated $2.3 billion a year on online wagers. Before it took effect, India's online gaming sector — which included fantasy sports, rummy, poker, and prediction markets — had recorded a GGR of ₹31,900 crore (~€3.7 billion) in 2024 and employed a workforce of approximately 120,000.

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The MeitY Enforcement Timeline

MeitY moved methodically against prediction markets in the weeks surrounding PROGA's 1 May commencement date. The key sequence:

• 25 April 2026 — MeitY sent Kalshi a formal warning letter (reference No. 2(6)/2024-CL&DG-Part(1)) citing continued access by Indian users despite domestic prohibitions. A separate letter warned VPN providers that enabling access to blocked platforms could cost them safe-harbour protections under the IT Act 2000.
• 1 May 2026 — PROGA and the accompanying Promotion and Regulation of Online Gaming Rules 2026 came into force. The OGAI became operational.
• ~21 May 2026 — MeitY ordered ISPs to block Polymarket. Access via mainstream providers was cut, though VPN circumvention continued.
• Late May 2026 — Kalshi's site became inaccessible through multiple Indian ISPs, even as the platform technically continued onboarding users who passed identity checks.
• 17 June 2026 — Kalshi formally added India to its restricted-jurisdiction list via a member-agreement update, ending all event-contract trading for Indian-based users.

Kalshi held out longer than most. Its legal counsel Valeria Vouterakou told Bloomberg in mid-May that the company had been in communication with the Indian government and had not received a formal shutdown order, adding that Kalshi would comply "should they make them." The formal compliance came five weeks later.

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Operator Damage: Kalshi, Flutter, and Domestic Platforms

The PROGA enforcement wave has produced measurable financial damage across the operator landscape:

Operator	Action Taken	Financial Impact	Date
Kalshi	Added India to restricted jurisdictions list; event-contract trading blocked	India had been ~3.63% of web traffic; IPL cricket markets reached ~50% of US baseball volumes	17 Jun 2026
Polymarket	Blocked by MeitY ISP order; accessible only via VPN	Not disclosed; was still accepting Indian sign-ups via mirror sites post-block	~21 May 2026
Flutter / Junglee	Stopped all paid contests in Indian skill-gaming subsidiary	~$200 million projected 2026 revenue lost; $560 million impairment charge taken	May 2026
Dream11, WinZO, Zupee, PokerBaazi, Games24x7	Suspended real-money operations	Payment gateways estimated up to 15% drop in annual top-line growth	May 2026
Probo	Ceased operations entirely; posted closure notice on website	Full business shutdown	May 2026

Overall online transaction volumes in India are estimated to fall by at least ₹30,000 crore ($3.6 billion) across 2026 as real-money gaming transactions disappear from domestic payment rails. Within the first 90 days of the ban's passage in 2025, RMG platforms had already recorded aggregate asset write-downs of more than $840 million.

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The Offshore Surge and VPN Problem

PROGA is producing a pattern regulators have seen elsewhere: domestic bans push users to offshore platforms rather than eliminating the behaviour. A survey by public policy think tank CUTS International found that use of offshore betting platforms jumped from roughly 68.3% to 82% of Indian bettors after PROGA came into force, with many users reporting higher spend and more frequent sessions on foreign sites.

MeitY identified a specific bypass mechanism in its April advisory: users converting Indian rupees into virtual digital assets — particularly dollar-denominated stablecoins — to transact on blocked platforms outside the fiat payment system. Both Kalshi and Polymarket support stablecoin settlement, which the ministry flagged as a high-risk vector. The IT Act's safe-harbour warnings to VPN providers were intended to address this channel, but enforcement against individuals using consumer VPNs has so far remained limited.

The SEBI had also warned investors before PROGA came into force that prediction market products lacked investor-protection mechanisms and sat entirely outside its regulatory oversight — a concern the OGAI is now positioned to act on through its complaints and adjudication functions.

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A Global Pattern: Europe Joins the Crackdown

India's enforcement actions are not occurring in isolation. On the same day Kalshi formalised its India restriction — 17 June 2026 — gambling regulators from nine European countries signed a joint declaration committing to coordinated action against prediction market platforms operating without a local licence. The signatories were Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain, and Switzerland.

The declaration arrived during the opening days of the FIFA World Cup, a period of peak betting activity. Enforceable tools listed include formal warnings, fines, advertising restrictions, and ISP-level blocking. Spain, France, the Netherlands, and Belgium already block both Polymarket and Kalshi at the ISP level. In the US, Kentucky Attorney General Russell Coleman filed three separate lawsuits on 17 June 2026 against Kalshi, Polymarket, and VGW, alleging violations of state consumer protection and gambling laws.

Despite the headwinds, global prediction market volumes remain substantial. Kalshi recorded $3.7 billion in weekly trading volume and Polymarket recorded $3.2 billion in the same recent period, according to Defirate data, with sports contracts driving the bulk of activity. The sector generated over $63.5 billion in total trading volume during 2025, up from $15.8 billion in 2024.

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Sources

This article draws on primary regulatory documents, company member agreements, and reporting from specialist iGaming and financial press. Sources are listed in order of primacy.

Polymarket, Kalshi and other prediction markets would obviously fall under online money games under PROGA, and therefore there is a blanket ban.

— Jay Sayta, Technology & Gaming Lawyer, Mumbai · Business Standard, May 2026