India's Ministry of Electronics and Information Technology has put VPN service providers on notice, issuing a formal advisory demanding they stop functioning as gateways to banned online betting and prediction market platforms, including the US-based cryptocurrency prediction platform Polymarket. The April 25 advisory signals a sharpening of the government's posture on digital circumvention - and places compliance obligations squarely on intermediaries, not just end users. The move is the latest action in a broader regulatory effort to close the loopholes that have allowed real-money gaming to persist despite legal prohibitions.
Why VPNs Have Become the Enforcement Problem
Blocking a website at the domain level is a relatively blunt instrument. Users who know how to route their traffic through a VPN can render such blocks effectively meaningless in minutes. MeitY's advisory acknowledges this gap directly, noting that certain users are circumventing legal restrictions by misusing VPN services to access prohibited platforms. What makes this particular pattern more complex is the financial layer involved: users are converting Indian rupees into stablecoins such as USD Coin (USDC) to fund their activity on these platforms, sidestepping domestic payment restrictions through cryptocurrency rails.
This is not a trivial workaround. Stablecoin-based transactions are designed to be borderless and near-instantaneous, making them difficult to monitor through conventional banking surveillance. The combination of a VPN masking location and a stablecoin bypassing currency controls creates an enforcement gap that neither a simple block nor a banking directive can adequately address on its own. MeitY's advisory attempts to fill that gap by invoking the due diligence obligations that intermediaries carry under the Information Technology Rules, 2021 - rules that require platforms and service providers to ensure their infrastructure is not used to facilitate content or conduct that violates Indian law.
The Legal Architecture Behind the Crackdown
The advisory does not emerge in isolation. The Central government undertook a significant policy overhaul with the enactment of The Promotion and Regulation of Online Gaming Act, 2025, which banned real money gaming in any form. Under this framework, any platform or service that directly or indirectly enables access to real-money gaming is in violation - a formulation broad enough to capture intermediaries like VPN providers if they are knowingly facilitating such access.
Polymarket, which allows users to place cryptocurrency-denominated bets on future real-world outcomes ranging from election results to geopolitical events, is officially banned and blocked in India. It sits at the intersection of two regulatory concerns: online gambling and cryptocurrency-enabled cross-border financial flows. Neither domain has a comfortable home in India's current legal framework, and the overlap between them creates the kind of ambiguity that enforcement agencies have been working to resolve through action rather than legislation.
An Industry Caught in a Legal Grey Zone
The broader context involves a category of domestic startups - opinion trading platforms - that built meaningful user bases before regulators caught up. Apps such as Probo, TradeX, and MPL's Opinio gained significant traction by allowing users to take "yes" or "no" positions on real-world outcomes and earn payouts accordingly. Probo alone reportedly crossed one million daily active users at its peak. The format attracted heavy marketing investment, particularly in Tier II and Tier III cities, and positioned itself as a skill-based activity rather than gambling.
That distinction - skill versus chance - remains legally unresolved. Companies in the opinion trading space have consistently argued that predicting outcomes requires analytical judgment and therefore qualifies as a skill-based activity, which historically received more favourable treatment under Indian gaming law. Critics and enforcement agencies have pushed back, arguing that the format is fundamentally chance-dependent and commercially structured in ways that resemble gambling products. Courts have not delivered a definitive verdict, and no comprehensive central legislation specifically governing opinion trading exists.
The practical consequences for the industry have been significant. The Enforcement Directorate has conducted searches and seized assets worth hundreds of crores in Probo's case. State authorities in Haryana and Rajasthan have frozen bank accounts and registered criminal complaints. TradeX has exited real-money opinion trading entirely, shifting to a free-to-play model. MPL and SportsBaazi have withdrawn their offerings in certain states. Probo has suspended operations in some regions. The category that once drew venture capital enthusiasm and prime-time advertising is now contracting under the weight of legal uncertainty and enforcement pressure.
What the Advisory Actually Changes
MeitY's directive does not introduce new law - it applies existing obligations to a behaviour pattern that had not previously attracted formal regulatory attention at the ministry level. By putting VPN providers on notice, the government is signalling that the enforcement perimeter now extends to the infrastructure layer, not just the platforms themselves. Whether this translates into meaningful compliance is another question. VPN providers operating from outside India's jurisdiction may not feel bound by the advisory, and the technical challenges of verifying what traffic a VPN is carrying are substantial.
What the advisory does accomplish is establishing a documented regulatory expectation. Indian-domiciled VPN providers and intermediaries who ignore it risk being found in violation of the IT Rules, 2021 - a position that carries legal exposure. It also puts on record that the government views stablecoin-based circumvention of financial restrictions as a compliance issue for intermediaries, not merely a matter for cryptocurrency regulators. As India continues to develop its regulatory architecture around digital assets and online gaming, this advisory may serve as an early marker of how far that architecture is intended to extend.