Indian government set to block Kalshi and Polymarket
India’s central government is moving to formally block prediction market platforms Kalshi and Polymarket, according to a senior official at the Ministry of Electronics and Information Technology.
A blocking order against Polymarket had been issued, the official said, with the Kalshi order moving through the same process. Both platforms had continued to allow Indian users to sign up and trade despite directives instructing internet providers to cut access.
The Ministry wrote to virtual private network providers on 25 April, warning that users were reaching the platforms through workarounds. The advisory described Polymarket and similar operators as banned.
Enforcement followed the Promotion and Regulation of Online Gaming Act, which Parliament passed in August and which came into force on 1 May. The law set a three-way classification covering e-sports, non-monetary social games, and banned online money games.
Kalshi and Polymarket, which allowed real-money trading on event outcomes, fell outside all three permitted categories.
The blocking orders were expected under Section 69A of the Information Technology Act, the same provision used to ban TikTok in India. Non-compliant intermediaries faced up to seven years in prison and a fine.
Policy expert Deepro Guha at The Quantum Hub said mirror sites posed a bigger challenge for enforcement than virtual private network usage, with blocked platforms frequently reappearing under altered domains within weeks.
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The Backstory
Why India is drawing a line
India’s move to block Kalshi and Polymarket reflects a decisive turn in how governments classify and police real-money prediction markets. New national rules that took effect May 1 created a three-part framework for online play — e-sports, non-monetary social games and banned money games — leaving little room for platforms that let users trade on real-world outcomes. Pushing ahead under that regime, New Delhi is invoking Section 69A of the Information Technology Act, the same authority used to shut out TikTok, and warning that noncompliance could bring jail time and fines. The government has also pressed virtual private network providers as it seeks to cut off workarounds that let users reach blocked sites.
The enforcement push is not only about access. It signals India’s stance that markets on elections, sports and other public events are not investment products. By designating such activity as outside permitted categories, regulators are drawing a bright line between entertainment gaming, social play and financial speculation. That line carries policy weight: New Delhi is asserting that capital-style markets on public outcomes create consumer and systemic risks that fall closer to gambling than to regulated financial instruments.
The practical challenge runs deeper. As India targets front-door domains, mirror sites can reappear in weeks, testing the durability of blocks. That enforcement reality explains the government’s focus on intermediaries, from internet service providers to VPNs, and the threat of penalties for companies that do not comply. It also sets up a continuing cat-and-mouse dynamic that other jurisdictions are already confronting.
Latin America sets a comparable precedent
Colombia has moved along a similar path, putting election-linked prediction markets in the bucket of unauthorized games of chance. In October, the country’s gambling regulator ordered internet providers to block Polymarket for operating without a license and for offering activity the state treats as a monopoly. Regulators emphasized the traditional tests — financial stake, expectation of prize and uncertain outcomes — in classifying the product as gambling. Read the regulator’s case in Colombia’s gambling regulator orders ISPs to block Polymarket.
Colombia’s move underscores how the same product can face divergent treatment across borders. The country acted even as U.S. federal authorities signaled limited openings for event contracts in certain contexts. That split amplifies the operational risk for cross-border platforms and challenges their compliance teams to map a patchwork of legal definitions that differ not just by country but often by product category and use case.
There is also a revenue and public-interest angle. Colombian officials tie blocking orders to protecting the licensed sector and its fiscal contributions to health care. By that logic, unauthorized prediction markets siphon demand away from regulated operators while sidestepping consumer protections. India’s framework suggests a similar calculus: channel users to approved categories and cut off formats that regulators do not recognize.
In the U.S., the threshold question: finance or gambling
The United States has become a venue for the core definitional fight: whether event contracts are financial derivatives under federal law or gambling under state codes. The answer determines who gets to regulate. The Commodity Futures Trading Commission has argued that at least some sports-related markets fit within the Commodity Exchange Act as swaps or other event contracts. That position, if upheld, would limit state authority and pull these platforms firmly under federal oversight. The stakes are described in CFTC moves to block Arizona enforcement against Kalshi.
States, however, have been assertive. More than 10 have issued cease-and-desist letters or taken similar steps, often pointing to licensing regimes for sportsbooks and broad prohibitions on wagering on unspecified future events. That clash has produced a rolling set of lawsuits, preliminary injunctions and venue-by-venue guidance that leaves platforms threading a narrow path between state sanctions and federal permissions.
The legal sorting is not merely academic. A federal-first model could open the door to standardized products with national liquidity. A state-first model could fragment markets, carve out disallowed categories such as elections or certain sports, and impose local licensing or geofencing obligations. For operators, each interpretation drives business-model design, compliance costs and access to retail distribution partners.
Courts probe the contours of Kalshi’s business
Recent rulings illustrate how judges are parsing these platforms. In California, a federal judge rejected a bid by three Native American tribes to block Kalshi from offering sports-related event contracts, finding that its binary contracts fall under the Commodity Exchange Act and sit within the CFTC’s remit, not tribal gaming law. The court also declined a false advertising claim tied to how Kalshi describes the legality of its products. The decision is outlined in Judge rejects tribes’ bid to block Kalshi’s sports events contracts.
Massachusetts has taken a different tack. A state judge concluded Kalshi cannot offer sports betting products without a gambling license, aligning with the attorney general’s view that these contracts are wagers by another name. Enforcement of that order is on hold while the sides work through the injunction’s language, but the signal is clear: state courts may accept the sportsbook analogy despite federal oversight claims. The latest turn is captured in Judge puts Kalshi block in Massachusetts on hold.
These mixed outcomes show that platform classification can hinge on forum, facts and framing. References to “sportsbooks” in job listings, for instance, have drawn scrutiny, prompting Kalshi to scrub that language to keep a cleaner line between derivatives and gambling. Each ruling feeds into the broader mosaic that regulators and lawmakers will study as they consider whether to clarify statutes that predate internet-native markets.
Arizona as a pivotal battleground
Arizona has emerged as a test of how far state regulators can go when they view event contracts as prohibited wagers. The Department of Gaming warned Kalshi that only licensed operators can accept sports bets and that state law bars wagering on “any other unknown or contingent future event.” Kalshi responded with a federal lawsuit seeking to block enforcement, arguing that the platform is federally regulated and outside state jurisdiction. Details are in Kalshi sues Arizona to block state regulators.
Federal agencies then raised the stakes. The CFTC, joined by the Department of Justice, asked a court to halt Arizona’s enforcement while arguing that the contracts qualify as derivatives under federal law. The filing aims to stop a patchwork of state actions that could undermine a federally supervised market structure. That intervention, covered in CFTC moves to block Arizona enforcement against Kalshi, suggests Washington sees broader implications for market integrity and regulatory precedent.
Outcomes in Arizona could ripple nationwide. A ruling that cements federal primacy would bolster platforms seeking uniform treatment and could constrain state-level bans. A decision backing Arizona’s stance would embolden other states to escalate enforcement, including criminal charges, and push platforms to retreat or redesign products market by market.
What India’s action means next
India’s pending blocks slot into a global pattern now taking shape: when lawmakers classify prediction markets as gambling, they move quickly to restrict access; when they accept a derivatives framing, they look to federal-style oversight and supervised venues. Colombia’s ISP blocking orders and Arizona’s hardened posture show the force of the former. The CFTC’s intervention and federal court wins for Kalshi in discrete cases show the pull of the latter.
For operators, India heightens the compliance burden and raises the probability of parallel actions in other large markets. For regulators, the case underscores a need to tighten definitions that were drafted before crypto rails and app-based event contracts. And for users, the near-term effect is fragmentation: access determined by jurisdiction, product type and the outcome of fast-moving lawsuits that will shape whether prediction markets resemble exchanges or sportsbooks.
