Context

• The Promotion and Regulation of Online Gaming (PROG) Act, 2025 was enacted to protect individuals, particularly youth and vulnerable populations, from the harmful social, economic, and psychological effects of online gambling.
• The Act aimed to reduce addiction, financial losses, and privacy-related concerns associated with online games involving money.
• However, instead of eliminating gambling activities, the law has unintentionally encouraged users to shift toward illegal offshore platforms, creating new concerns related to cybercrime, money laundering, and weak consumer protection.
• The growing evidence suggests that a complete ban may not be the most effective solution in the digital era.

Rise in Offshore Platform Use

• Shift from Domestic to Illegal Platforms
  • Following the implementation of the PROG Act in October 2025, many users moved from regulated Indian gaming platforms to illegal offshore gambling websites.
  • According to studies conducted by CUTS International, offshore participation increased significantly after the ban.
  • In Delhi NCR, offshore usage rose from 68.3% to 82%.
  • In Tamil Nadu, it increased from 67.8% to 83.
  • In Maharashtra, the figure rose sharply to 91.7%.
  • Instead of abandoning online gambling, users increasingly relied on foreign platforms operating outside Indian laws and regulations.
• Technological Challenges
  • Offshore operators use advanced technologies such as VPNs, proxy servers, and encrypted applications like WhatsApp and Telegram to bypass restrictions.
  • When one domain is blocked, users are quickly redirected to mirror websites with minimal interruption.
  • The widespread use of these technologies weakens geographical restrictions and reduces the effectiveness of government bans.
  • As a result, users continue to access illegal gambling services despite repeated enforcement efforts.

A Case for Strong Regulation

• Ineffectiveness of Blanket Bans
  • Across industries, strict prohibitions rarely eliminate consumer demand. Instead, bans often push activities underground, where regulation and accountability become difficult.
  • This challenge is even greater in digital markets because users can easily access global platforms through the internet.
  • The Ministry of Electronics and Information Technology informed the Lok Sabha that over 8,376 URLs had been blocked to curb illegal betting networks.
  • Despite this action, reports of financial fraud and gambling-related suicides continue to emerge, demonstrating the limitations of prohibition.
• Threats from Offshore Operators
  • Offshore gambling platforms are associated with serious risks such as financial fraud, terror financing, and illegal money transfers.
  • Since these platforms operate outside Indian jurisdiction, users have limited access to grievance redressal and legal remedies.
  • A major gambling and fraud racket uncovered in Sivaganga, Tamil Nadu, illustrates these dangers.
  • Fraudsters used Telegram groups to promote fake Old Coin Purchase Task schemes that promised high returns.
  • Victims were persuaded to invest money, while villagers were encouraged to open mule accounts used to divert illegal funds.
  • Such incidents reveal how offshore gambling networks exploit vulnerable communities and support organised financial crime.

Examples from Overseas

• United Arab Emirates (UAE)
  • The UAE, despite maintaining strict gambling restrictions for years, introduced a tightly regulated federal licensing system in 2023.
  • The framework includes compliance requirements, deposit limits, and strong harm-prevention safeguards to reduce illegal offshore activity while ensuring consumer safety.
• Sri Lanka
  • Similarly, Sri Lanka is moving toward a regulated framework through the establishment of a centralised Gambling Regulatory Authority, expected to become operational by June 2026.
  • The authority aims to regulate offshore gambling activities and bring online betting within a legal domestic structure.
  • These international examples demonstrate that many countries are recognising the limitations of outright bans and adopting regulated systems to ensure accountability and oversight.

Need for a Balanced Regulatory Framework

• Advantages of Regulation
  • A regulated domestic framework could provide stronger consumer safeguards, effective monitoring mechanisms, and improved accountability.
  • Regulation would also enable authorities to track suspicious transactions and reduce illegal financial activities linked to offshore networks.
  • Moreover, a regulated gaming ecosystem could generate significant tax revenue.
  • These funds could be used to strengthen enforcement systems, improve offshore monitoring, and conduct public awareness campaigns about gambling addiction and financial risks.
• Cooperation Between Governments
  • Addressing illegal online gambling requires coordination between the Centre and State governments.
  • A balanced approach combining regulation, technological monitoring, and public awareness would be more sustainable than relying solely on prohibition.

Conclusion

• The experience following the implementation of the PROG Act, 2025, demonstrates that outright bans are often ineffective in controlling online gambling.
• Instead of eliminating gambling activities, the ban has encouraged the growth of illegal offshore platforms that operate beyond domestic oversight.
• The rise in offshore gambling, cybercrime, and financial fraud highlights the need for a more practical and balanced policy approach.
• In the long run, strong regulation, combined with technological safeguards and public awareness, is likely to be a more effective solution for addressing the challenges posed by online gambling in India.