๐Bloomberg TechnologyโขStalecollected in 31m
Kalshi and Polymarket defy India's online betting ban
๐กUnderstand the regulatory risks and enforcement challenges facing global prediction markets in emerging economies.
โก 30-Second TL;DR
What Changed
Kalshi and Polymarket are ignoring Indian government warnings regarding illegal betting.
Why It Matters
This highlights the difficulty of enforcing regional digital regulations on decentralized or global prediction markets. It may lead to stricter ISP-level blocking or financial transaction restrictions in the region.
What To Do Next
If building a global platform, implement robust geo-fencing and KYC/AML checks to ensure compliance with regional regulatory warnings.
Who should care:Founders & Product Leaders
Key Points
- โขKalshi and Polymarket are ignoring Indian government warnings regarding illegal betting.
- โขThe Indian technology ministry has officially labeled these prediction platforms as illegal.
- โขUsers in India maintain active access to trade on these prediction markets.
๐ง Deep Insight
Web-grounded analysis with 29 cited sources.
๐ Enhanced Key Takeaways
- โขIndia's Ministry of Electronics and Information Technology (MeitY) has specifically warned VPN service providers and other intermediaries to block access to platforms like Polymarket, highlighting the use of VPNs to bypass existing bans.
- โขA significant concern for Indian regulators is the use of dollar-based stablecoins, such as USDC, by these platforms, which is seen as a method to circumvent domestic financial regulations and facilitate illegal betting.
- โขThe Indian government's recent actions are underpinned by the Promotion and Regulation of Online Gaming Act, 2025 (PROGA), which bans "online money games" and has extra-territorial provisions allowing action against foreign platforms targeting Indian users.
- โขDespite the ban, prediction markets in India are reportedly seeing significant activity, with millions of dollars wagered on events like state assembly elections and the Indian Premier League (IPL), indicating a challenge in enforcement.
- โขWhile Polymarket operates as a decentralized, crypto-native platform, Kalshi is a federally regulated exchange in the US, holding a CFTC Designated Contract Market status since 2020, which allows it to operate legally in the US as a financial exchange for event contracts.
๐ Competitor Analysisโธ Show
| Feature / Platform | Kalshi | Polymarket (Global) | Polymarket (US) | PredictIt |
|---|---|---|---|---|
| Regulation | CFTC Regulated DCM (US) | Decentralized, largely unregulated | CFTC Designated Contract Market (DCM) (US, beta) | Academic, limited by CFTC (US) |
| Technology | Centralized exchange | Decentralized, built on Polygon (Ethereum Layer-2) | Centralized (acquired CFTC-registered exchange) | Centralized |
| Currency | USD (accepts fiat & crypto converted to USD) | USDC (stablecoin) | USDC (stablecoin) | USD |
| Accessibility (India) | Accessible despite warnings | Accessible via VPN despite warnings | Not available to US residents (global platform) / Beta with waitlist (US platform) | Not explicitly mentioned for India, but generally US-focused. |
| Business Model | Charges transaction fees | Non-custodial, does not take profits from bets | (Details not fully public for beta) | Charges 10% on profits, 5% withdrawal fee |
| Market Focus | Diverse (sports, politics, economics, culture) | Diverse (politics, sports, finance, crypto) | Sports (currently in beta) | Politics, current events |
| Volume (Weekly) | ~$2.7 billion (global) | ~$2.1 billion (global) | (Early beta, volume not comparable) | (Lower volume compared to Kalshi/Polymarket) |
๐ ๏ธ Technical Deep Dive
- Polymarket:
- Built on blockchain technology, specifically leveraging the Polygon protocol, which is a Layer-2 Ethereum scaling solution.
- Utilizes smart contracts for automated market creation, trading, and resolution processes, ensuring transparency and immutability of transactions on the Ethereum blockchain.
- Transactions are denominated in USDC, a dollar-pegged stablecoin.
- Operates on a peer-to-peer basis, meaning users trade directly with each other rather than against a "house."
- Employs a Proof-of-Stake (PoS) consensus mechanism for its network, contributing to faster and more energy-efficient transaction processing.
- Non-custodial, meaning the platform never holds user funds; users retain self-custody of their funds in their crypto wallets.
- Kalshi:
- Operates as a centralized exchange with a traditional order book.
- Contracts are classified as derivatives under federal law in the US.
- Has started to extend its model on-chain using tokenized prediction markets, initially with Solana, to enable non-custodial interaction and atomic settlement.
- Accepts fiat deposits (bank transfers, wire, debit card, Apple Pay) and converts crypto deposits to USD on arrival.
๐ฎ Future ImplicationsAI analysis grounded in cited sources
India will intensify its efforts to block access to offshore prediction markets and crypto-based betting platforms.
The Indian government has already issued warnings to VPN providers and is exploring ways to differentiate legitimate from illegitimate VPN use, indicating a strong intent to enforce its online gaming ban and address stablecoin-based circumvention.
Prediction market platforms will face increasing pressure to adapt their operations or technology to comply with diverse national regulations.
Polymarket's move to establish a CFTC-regulated US platform (Polymarket US) demonstrates a trend towards seeking regulatory legitimacy in key markets, which may influence their approach in other jurisdictions like India.
The legal distinction between "games of skill" and "games of chance" will remain a critical and contentious point in India's evolving online gaming and prediction market landscape.
India's Public Gambling Act of 1867 exempts games of skill, but the classification of prediction markets remains ambiguous and subject to judicial interpretation, creating ongoing regulatory uncertainty.
โณ Timeline
1867
India enacts the Public Gambling Act, forming the cornerstone of its gambling legislation, prohibiting most forms of gambling.
2020
Kalshi receives a Designated Contract Market (DCM) license from the US CFTC, establishing it as a federally regulated exchange for event contracts.
2020
Polymarket, a decentralized prediction market platform, is launched.
2022-01
The US CFTC fines Polymarket and requires it to cease serving US customers, leading Polymarket to focus on international markets.
2025-08
India's Promotion and Regulation of Online Gaming Act, 2025 (PROGA) is passed, imposing a blanket prohibition on "online money games."
2026-04
India's Ministry of Electronics and Information Technology (MeitY) warns VPN providers and intermediaries against facilitating access to banned online betting and prediction market platforms like Polymarket.
๐ Sources (29)
Factual claims are grounded in the sources below. Forward-looking analysis is AI-generated interpretation.
- indianexpress.com
- businessworld.in
- bloomingbit.io
- binance.com
- agbrief.com
- ndtvprofit.com
- dailypioneer.com
- youtube.com
- si.com
- builtin.com
- medium.com
- wikipedia.org
- investing.com
- metamask.io
- si.com
- backpack.exchange
- semrush.com
- privy.io
- gemini.com
- phemex.com
- techflowpost.com
- reddit.com
- netsetsoftware.com
- sethassociates.com
- manifold.markets
- hariani.co.in
- altenar.com
- wikipedia.org
- legalsportsbetting.in
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Original source: Bloomberg Technology โ