How India’s real-money gaming crackdown is fuelling a shadow crypto economy
Sweeping crackdown on real-money online gaming meant to curb addiction, gambling, and illicit financial flows.
Jyotindra Dubey
- Feb 6, 2026,
- Updated Feb 6, 2026 5:10 PM IST
The Promotion and Regulation of Online Gaming Act (PROGA), 2025, which came into force from 1st October, 2025, implemented a nationwide ban in India on real-money online games, including poker, rummy, and fantasy sports, regardless of whether they are skill or chance-based.
This sweeping crackdown on real-money online gaming was meant to curb addiction, gambling, and illicit financial flows.
Advertisement
Instead, mounting evidence suggests it has accelerated the rise of a parallel, crypto-denominated gaming economy, operating entirely outside India’s tax, banking, and regulatory net.
At the heart of this emerging shadow crypto economy is Tether (USDT), a dollar-pegged stablecoin that has become the preferred currency for offshore gaming platforms catering to Indian users.
USDT stablecoin, which typically trades close to the dollar globally, is reportedly changing hands at a 15-20% premium in India. Peer-to-peer rates have touched even ₹120 per USDT on some crypto platforms as compared to USD-INR which is hovering around ₹90, reflecting rising demand from users seeking access to offshore gaming sites.
While domestic platforms were appropriately taxed and limited to games of skill as defined by the Supreme Court — with withdrawals subject to a 30% TDS — the nationwide ban has pushed Indian users toward offshore, crypto-based platforms. These platforms not only evade taxation but also operate full-scale casinos, unrestricted to games of skill.
Advertisement
The players have moved, the capital has moved and the offshore operators are thriving but on the other hand the impact on legitimate Indian companies has been severe.
Head Digital Works, which runs the A23 platform, witnessed its workforce shrinking from 606 to just 178. Private equity firm Clairvest, investor in Head Digital Works, wrote down the entire stake to zero.
Similarly, Moonshine Technology, the parent company of PokerBaazi laid off over 200 employees, almost 50% of its workforce. Nazara Technologies, its major investor, wrote off the majority of its investment in Moonshine Technologies.
Advertisement
The damage extends beyond just gaming operators UPI payments as well, causing a massive drop in transaction volume post gaming ban.
The rationale behind the ban was to protect consumers and prevent illicit finance but going by the trend on ground, it has achieved the opposite outcome.
What was meant to regulate gaming may have instead legitimised a parallel system denominated by crypto, operated offshore, and thriving precisely because it sits beyond India’s regulatory reach.
These platforms increasingly accept deposits in USDT from Indian users. Winnings may be traded with other players for fiat currency or withdrawn to crypto wallets, where users can convert USDT into fiat currency. Since these transactions occur on the blockchain, leaving untraceable millions behind.
The Promotion and Regulation of Online Gaming Act (PROGA), 2025, which came into force from 1st October, 2025, implemented a nationwide ban in India on real-money online games, including poker, rummy, and fantasy sports, regardless of whether they are skill or chance-based.
This sweeping crackdown on real-money online gaming was meant to curb addiction, gambling, and illicit financial flows.
Advertisement
Instead, mounting evidence suggests it has accelerated the rise of a parallel, crypto-denominated gaming economy, operating entirely outside India’s tax, banking, and regulatory net.
At the heart of this emerging shadow crypto economy is Tether (USDT), a dollar-pegged stablecoin that has become the preferred currency for offshore gaming platforms catering to Indian users.
USDT stablecoin, which typically trades close to the dollar globally, is reportedly changing hands at a 15-20% premium in India. Peer-to-peer rates have touched even ₹120 per USDT on some crypto platforms as compared to USD-INR which is hovering around ₹90, reflecting rising demand from users seeking access to offshore gaming sites.
While domestic platforms were appropriately taxed and limited to games of skill as defined by the Supreme Court — with withdrawals subject to a 30% TDS — the nationwide ban has pushed Indian users toward offshore, crypto-based platforms. These platforms not only evade taxation but also operate full-scale casinos, unrestricted to games of skill.
Advertisement
The players have moved, the capital has moved and the offshore operators are thriving but on the other hand the impact on legitimate Indian companies has been severe.
Head Digital Works, which runs the A23 platform, witnessed its workforce shrinking from 606 to just 178. Private equity firm Clairvest, investor in Head Digital Works, wrote down the entire stake to zero.
Similarly, Moonshine Technology, the parent company of PokerBaazi laid off over 200 employees, almost 50% of its workforce. Nazara Technologies, its major investor, wrote off the majority of its investment in Moonshine Technologies.
Advertisement
The damage extends beyond just gaming operators UPI payments as well, causing a massive drop in transaction volume post gaming ban.
The rationale behind the ban was to protect consumers and prevent illicit finance but going by the trend on ground, it has achieved the opposite outcome.
What was meant to regulate gaming may have instead legitimised a parallel system denominated by crypto, operated offshore, and thriving precisely because it sits beyond India’s regulatory reach.
These platforms increasingly accept deposits in USDT from Indian users. Winnings may be traded with other players for fiat currency or withdrawn to crypto wallets, where users can convert USDT into fiat currency. Since these transactions occur on the blockchain, leaving untraceable millions behind.
Read more!