The Ministry of Electronics and IT has put virtual private network providers on formal notice: allowing Indian users to access banned betting and prediction market platforms, including Polymarket, will be treated as a violation of both the Information Technology Act and the country's new online gaming law. The advisory, issued earlier this week, marks the government's most direct attempt yet to close the digital workaround that has kept these platforms accessible long after they were officially prohibited. The move signals that India's regulatory response to prediction markets is shifting from website-level blocking to enforcement across the infrastructure that makes circumvention possible.
The Gap Between the Ban and the Reality
When the Promotion and Regulation of Online Gaming Act, 2025 came into force, prediction markets were classified as illegal under its framework. Blocking the URLs of platforms like Polymarket was the primary enforcement mechanism. The problem is structural: URL blocking is only as effective as users' willingness to accept it. VPNs route traffic through servers in other jurisdictions, masking the user's location and making domestic blocks functionally invisible. This is not a novel challenge - every country that has attempted to restrict internet content through IP or DNS blocking has encountered the same limitation.
What makes the current situation more pointed is the scale of actual participation. According to a report by The Indian Express, a single Polymarket prediction market on the outcome of the Tamil Nadu Legislative Election had received bets worth up to $16 million as of April 27. That figure, if accurate, indicates that user engagement with these platforms has not meaningfully declined following the ban - it has simply moved through a different channel.
The Cryptocurrency Layer Complicates Enforcement
MeitY's advisory draws specific attention to a financial dimension that extends well beyond VPN usage. Indian users participating in Polymarket are not transacting in rupees directly. Instead, they are converting rupees into stablecoins - digital assets pegged to the US dollar, such as USD Coin - and using those assets to place positions on the platform. This two-step process insulates the activity from conventional payment system monitoring. Banking channels and payment gateways, which the government has previously used to cut off funding to prohibited gambling sites, are bypassed entirely.
This is significant because it illustrates how the convergence of decentralised finance tools and VPN access creates an enforcement gap that no single regulatory action can close on its own. Prediction markets like Polymarket operate on blockchain infrastructure, meaning they are not hosted by a single entity that can be readily ordered to restrict access by geography. The advisory implicitly acknowledges this by placing the compliance burden on intermediaries - the VPN providers - rather than on the platforms themselves, which are largely beyond Indian jurisdictional reach.
What the Advisory Actually Demands
The language MeitY used is carefully calibrated. VPN providers and other intermediaries are directed to make "reasonable efforts" to not host, store, or permit access to platforms carrying unlawful content. The phrase is notable: it does not set out a technical standard, nor does it define what "reasonable" means in operational terms. This leaves room for the government to assess compliance case by case, and potentially to hold providers liable if users demonstrably accessed banned platforms through their services.
For VPN providers operating commercially in India, this creates a compliance problem without a clean technical solution. Deep packet inspection can identify VPN traffic, but not necessarily its destination once encrypted. Maintaining blocklists of prohibited domains and preventing their resolution is technically possible, but it conflicts directly with the core value proposition of a VPN service, which is unfettered, private access to the internet.
The Broader Regulatory Trajectory
India's attempt to regulate online prediction markets sits within a wider global debate about how democratic governments can enforce domestic laws in an internet environment that is architecturally resistant to geographic borders. Countries across the world have wrestled with identical tensions over online gambling, financial services, and content restrictions. The consistent finding is that supply-side blocking - targeting platforms and intermediaries - has limited effectiveness without demand-side consequences for users who circumvent restrictions.
PROGA itself is a relatively new instrument, and the government is still working out how its provisions interact with adjacent laws governing digital assets, payment systems, and intermediary liability under the IT Act. The Polymarket advisory is less a solution than a signal - an indication that MeitY is aware the current enforcement architecture is not working and is beginning to explore where additional pressure can be applied. Whether VPN providers will respond with substantive technical changes, or simply acknowledge the advisory and continue operating as before, will determine whether this escalation has practical consequences or remains largely symbolic.
