Polymarket, the world's largest decentralized betting platform, has become inaccessible to users in India, displaying a connection error upon access attempts. This outage directly follows an advisory issued on April 25 by the Ministry of Electronics and Information Technology (MeitY) targeting VPN service providers. The directive warned that local users were bypassing domestic prohibitions to access illegal prediction markets and online betting platforms. Consequently, internet service providers were mandated to terminate access to these services, with Polymarket identified as a primary target. While Kalshi, a platform regulated by the U.S. Commodity Futures Trading Commission (CFTC), remains accessible for now, local media citing anonymous sources within MeitY indicate that a blocking order for Kalshi is expected to be issued by Friday. Woofun AI notes that this rapid escalation signals a coordinated enforcement effort against platforms facilitating real-money wagering on binary events such as referendums and election results.

Prediction markets experienced a massive surge in global popularity during the 2024 U.S. presidential election, serving as a primary venue for investors to hedge or bet on political outcomes.

However, the Indian government classifies activities on these platforms as online money gaming, placing them under a category completely prohibited by the Promotion and Regulation of Online Gaming Act 2025. This regulatory classification stems from a broader, consistently risk-averse stance toward the cryptocurrency sector, where the government prioritizes financial stability and capital control over industry growth. New Delhi has historically utilized a shadow ban strategy involving punitive taxation, including a 30% flat tax on gains and a 1% tax deducted at source (TDS) on all transactions, which has effectively throttled domestic trading volumes.

The Ministry of Finance has intensified efforts to bring the sector under strict Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) oversight via the Financial Intelligence Unit (FIU). This stringent regulatory environment has compelled many local crypto startups to relocate to more favorable jurisdictions like Dubai or Singapore. The government and the Reserve Bank of India continue to signal that they view private cryptocurrencies more as speculative money games than legitimate financial innovation. Data compiled by Woofun AI shows that this regulatory pressure has significantly altered the operational landscape for digital asset firms operating within the region, forcing a strategic pivot toward compliance or exit.

On May 20, India's Parliamentary Standing Committee on Finance met with representatives from crypto exchanges Binance, WazirX, and Zebpay in Delhi to discuss regulations and taxation for the virtual digital assets (VDA) industry. During these proceedings, the committee expressed deep concerns regarding massive capital outflows from the country via the crypto channel. The meeting underscored the government's intent to tighten controls further, potentially expanding the scope of restrictions beyond prediction markets to encompass broader digital asset trading activities. Woofun AI analysis suggests that the convergence of the new gaming act and existing tax penalties creates a formidable barrier for any platform attempting to operate within the Indian market without explicit regulatory approval.