India's Ministry of Electronics and Information Technology has drawn a direct line between VPN services and illegal gambling access, issuing a formal advisory that holds intermediaries legally responsible for enabling circumvention of domestic restrictions on online betting and prediction market platforms. The advisory, dated April 25, 2026, names specific sites including Polymarket and warns that non-compliant providers risk losing their legal immunity under Indian law. The directive marks a significant escalation in the government's effort to enforce the Promotion and Regulation of Online Gaming Act, 2025.
What the Advisory Actually Demands
MeitY's Cyber Laws Division observed that certain VPN providers were actively facilitating access to platforms blocked under Section 69A of the Information Technology Act, 2000. The ministry's concern extends beyond passive technical capability - it explicitly identified a behavioral pattern: users converting Indian Rupees into stablecoins such as USD Coin to fund accounts on offshore platforms, effectively sidestepping both the content block and domestic financial controls simultaneously.
The advisory places the compliance burden squarely on intermediaries. VPN service providers and other platforms are directed to make reasonable efforts to avoid hosting, storing, or permitting access to unlawful services. Critically, MeitY reminded these entities that the IT Act already obliges them to assist government agencies in investigative and cybersecurity activities within stipulated timelines - framing the advisory not as a new obligation but as a restatement of existing law.
The legal consequence is precise. Section 79 of the IT Act grants intermediaries a conditional exemption from liability for third-party content. Failure to observe due diligence requirements strips that protection away, exposing providers to direct legal action. The ministry's phrasing - "consequential legal action under applicable laws" - deliberately leaves the range of penalties unspecified, which is itself a form of regulatory pressure.
The Enforcement Gap the Advisory Is Responding To
Parliament passed the Promotion and Regulation of Online Gaming Act in 2025, and Indian authorities have since blocked over 8,376 illegal gambling and betting websites as of late March 2026. The scale of that figure reflects years of accumulated enforcement action, not a single sweep. Yet the pace of blocking has not produced the outcome regulators intended.
A survey conducted by CUTS International in Delhi found that usage of offshore platforms among respondents actually rose after the ban - from 68.3% before restrictions were imposed to 82% afterward. More striking still, daily access to these platforms increased from 3.4% to 42.3% over the same period. These figures suggest that blocking at the domain level, without addressing the infrastructure that routes around it, may inadvertently concentrate and intensify user behavior rather than suppress it.
Offshore operators have responded to enforcement with predictable agility, shifting to mirror domains and private distribution channels. The combination of widely available VPN tools and the pseudonymous liquidity of stablecoins has created a workaround that is technically accessible to ordinary users, not just sophisticated actors. MeitY's advisory is, in part, an acknowledgment that the current enforcement architecture has not kept pace with these evasion methods.
The Broader Regulatory Challenge
The advisory sits within a global pattern. Governments across multiple jurisdictions have moved to hold intermediaries - internet service providers, app stores, payment processors, and now VPN services - accountable for downstream access to prohibited content. The legal theory is consistent: if a platform enables an illegal outcome, it shares responsibility for that outcome if it fails to act after notification.
What distinguishes India's current situation is the stablecoin dimension. The use of USDC and similar dollar-pegged assets as a transactional bridge between regulated domestic currency and unregulated offshore platforms represents a genuine regulatory seam. Financial regulators and technology regulators are being asked to coordinate across what have historically been separate oversight domains. MeitY's advisory touches this problem but does not resolve it - enforcement against crypto-denominated transactions on foreign platforms requires a different set of instruments than domain blocking.
For VPN providers operating in India or serving Indian users, the advisory creates an immediate compliance question that has no obvious technical answer. Distinguishing traffic destined for a blocked gambling site from any other encrypted traffic is not a capability most commercial VPN services were built to offer. The ministry may be signaling that providers who cannot or will not make that distinction should exit the market rather than accept the legal exposure that comes with remaining in it.
