Crypto instead of Rupees: India’s Real-money Online Gaming ban boosts USDT demand and offshore Casino Growth
Since October 1, 2025, a nationwide ban on real-money online gaming has been in effect in India. The Promotion and Regulation of Online Gaming Act (PROGA) pushed poker, rummy, fantasy sports, and other formats out of the legal sphere, regardless of whether they are classified as games of skill or chance. The authors of the law aimed to combat gambling addiction, illegal betting, and illicit financial flows. However, accumulating data point to the exact opposite effect: Indian players have moved en masse to overseas sites, where settlements are conducted in cryptocurrency, and the key "currency" has become the USDT stablecoin.
How the legal market worked before the ban and where demand shifted
Before PROGA took effect, Indian platforms operated within the legal framework, relying on the definition of "games of skill" established by the Supreme Court. Operators paid taxes, used banking infrastructure, and player withdrawals were subject to 30% TDS (Tax Deducted at Source) withholding. The system was transparent, though not without flaws.
The closure of the legal domestic segment disrupted this entire pipeline. The audience did not stop playing, but shifted to offshore platforms that continue to serve Indian users. These sites are not limited to "games of skill" and offer a full range of gambling offerings, including online casinos. They are outside India's regulatory and tax framework, which makes them a magnet for demand that until recently was served within the country.
USDT as the new settlement currency of the shadow gambling market
At the center of the emerging parallel economy is Tether (USDT), a dollar-pegged stablecoin. For Indian players, it has become a replacement for banking rails and fiat payments: offshore sites accept deposits specifically in USDT, not in rupees. We confirmed this by reviewing the payment options at many online casinos and bookmakers. We used several thematic industry rankings as a basis, including a list of best football betting sites that we found near the top of search results. And the check indeed showed that USDT is accepted almost everywhere.
Market indicators underscore the scale of demand. Despite its global peg to $1, the stablecoin in India, according to available information, trades at a 15-20% premium. On the P2P market, the rate reached as high as ₹120 for 1 USDT, versus a USD/INR benchmark of around ₹90. This gap reflects strong demand pressure from users seeking access to overseas gambling sites.
Against the backdrop of players and capital moving abroad, the consequences for Indian operators have been extremely severe. An industry that only recently was attracting venture capital and expanding headcount is going through a period of painful contraction.
Head Digital Works, which operates the A23 platform, cut staff from 606 to 178 people. The Canadian private equity fund Clairvest, which invested in the company, wrote down its stake to zero.
Moonshine Technology, the parent company of PokerBaazi, laid off more than 200 employees, which is about 50% of the team. Nazara Technologies, Moonshine's largest investor, wrote down most of its investment.
Losses also affected the payments infrastructure. After the ban, transaction volumes via the UPI system fell noticeably: legal gaming payments disappeared, and some of the volume shifted into cryptocurrency channels and offshore.
The paradox of the ban that troubles regulators
The observed dynamics pose an uncomfortable question for the Indian authorities. Measures aimed at control and consumer protection, taken together, may have accelerated the formation of a parallel offshore economy. Settlements in it are conducted in cryptocurrency, platforms are registered outside India's jurisdiction, and millions of rupees pass through the blockchain, outside India's tax net, banking system, and regulatory oversight. What was conceived as a regulatory tool risks becoming a catalyst for exactly the phenomenon it was meant to combat.
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