Polymarket and Kalshi Inc. have been allowing customers in India to sign up and trade on their prediction markets even after the country's technology ministry warned that the platforms are illegal.
India's Ministry of Electronics and Information Technology said in a letter last month that users are accessing “illegal and blocked prediction market and online betting platforms,” despite “domestic prohibitions.” The advisory, posted on the ministry's website, pointed specifically to “Polymarket and a few other similar sites,” which it said are supposed to be cut off by internet providers.
The letter, which was dated April 25, was addressed to providers of virtual private networks, which the ministry said were being used to circumvent restrictions. The agency told the providers that they would have “exposure to consequential legal action” if they allowed access to the venues. A new Indian law meant to curb online gambling countrywide went into effect on May 1.
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A Kalshi spokesperson said it had no comment on the technology ministry's advisory, or the volume of trading it receives from India.
Kalshi's legal counsel, Valeria Vouterakou, said the company has been in communication with the Indian government and has not been told to shut down. In the meantime, it is taking new customers. Like Kalshi's US-based customers, they are required to go through identity checks before trading on the platform.
“We will comply with the government's requests should they make them,” Vouterakou said.
Polymarket does not include India on its list of restricted countries. A spokesperson for the company said it is “committed to complying with applicable laws and regulations across all jurisdictions in which it operates. We maintain geoblocking measures to restrict access in jurisdictions where our services are not permitted, and we continuously evaluate and update those measures.”
The technology ministry did not respond to multiple requests for comment.
Cricket Wagers
Kalshi has drawn significant wagers on Indian Premier League matches since the current season began in March, approaching half the trading volume on US baseball games on some weeks — though the data does not indicate how much of this comes from inside India. A May 7 match between Lucknow Super Giants and Royal Challengers Bengaluru attracted $27.7 million in trading on Kalshi and Polymarket.
Photo Credit: Bloomberg
Brazil Ban
Access to Kalshi in Brazil was blocked by the government last month soon after the company announced its launch in the country. In the US, Kalshi and Polymarket have offered their services nationwide, in the face of state regulators who have alleged that they are violating state gambling laws.
The Commodity Futures Trading Commission has supported the platforms in their court battles with states and said that event contracts should be regulated in the US as financial derivatives at the federal level. The CFTC declined to comment when asked about Kalshi's overseas operations.
Some regulatory experts said that the situation in India is more black and white because of a new national law that was passed last August and went into effect on May 1 — known as the Promotion and Regulation of Online Gaming Rules — that put a broad ban on what it referred to as “online money games.”
“Polymarket, Kalshi and other prediction markets would obviously fall under online money games under PROGA, and therefore there is a blanket ban,” said Jay Sayta, a Mumbai-based technology and gaming lawyer.
Sayta said most domestic platforms stopped operating soon after parliament passed the law last year. Banks and financial institutions were uncomfortable with the financial liability of dealing with them, he said. One local platform that described itself as offering “opinion trading” now has a message on its website that says: “In light of PROGA, Probo is closed for business.”
Kalshi and Polymarket both take deposits in dollar-denominated stablecoins that move on blockchain-based financial rails. The technology ministry said it was concerned about the use of stablecoin payments to enable illegal trading.
“This raises serious concerns relating to unlawful online betting, circumvention of regulatory frameworks, potential financial risks, and threats to public order and economic integrity,” the ministry said in its advisory.
Previous Warnings
Even before the new law went into effect, Indian regulators had issued warnings about the legality of prediction market platforms. The Securities and Exchange Board of India publicly cautioned investors last year that the products on “opinion trading” platforms offered “no investor protection mechanism” and were not overseen by the agency.
“SEBI has clearly stated that it does not recognize these products and has issued warnings about them,” said Rahil Chatterjee, principal associate at Ikigai Law's government affairs and public policy practice. “That effectively leaves platforms with limited regulatory cover. In some cases, this may simply reflect an enforcement gap rather than a clear legal gray area.”
Polymarket is in a distinct legal situation because it operates entirely on a cryptocurrency-based network and does not perform any identity checks on its customers. The company blocks customers coming from US-based internet addresses, but US customers have said they circumvent those rules by using virtual privacy networks.
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At least some Indian internet providers are blocking access to Polymarket's website. But on the company's official Discord chat room, users have swapped tips in recent months on how to get around the country's block on its website by changing their DNS server to a generic Cloudflare service, obfuscating their true location.
Lawmakers around the world have expressed concern about prediction markets bringing online betting to new audiences. Recent research has indicated that most traders on the platforms lose money. In announcing the implementation of the new law this month, the Indian government said that online gambling platforms “have raised serious concerns due to reports of addiction, financial losses, money laundering and even suicides.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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