India just pulled the plug on Polymarket. The country’s Ministry of Electronics and Information Technology, known as MeitY, issued a formal blocking order against the prediction market platform on May 21, 2026, cutting off access at the ISP level for the world’s second-most-populous country.

Kalshi, the US-regulated prediction market that also accepts crypto deposits, is reportedly next in line. A blocking directive for Kalshi is expected by May 23, 2026.

A crackdown months in the making

This didn’t come out of nowhere. MeitY issued an advisory on April 25, 2026, that specifically named Polymarket and warned VPN providers against enabling access to blocked platforms. That’s a notable escalation: going after the tools people use to circumvent bans, not just the platforms themselves.

Then on May 1, 2026, India’s Promotion and Regulation of Online Gaming Rules officially took effect. The new framework reclassifies prediction markets as “money games,” placing them squarely under the country’s illegal online betting laws.

In English: India isn’t making a subtle distinction between “event contracts” and “gambling.” If you’re wagering money on an outcome, India considers it betting. Full stop.

Both Polymarket and Kalshi continued to accept Indian users even after the April advisory. That decision to keep onboarding users in defiance of government warnings appears to have accelerated the enforcement timeline. MeitY responded by moving from advisories to hard ISP-level blocks, the kind that make a platform genuinely inaccessible without significant technical workarounds.

Several local Indian prediction platforms have already shut down preemptively, reading the regulatory tea leaves and deciding the risk isn’t worth it. The domestic market for event-based trading in India is, for practical purposes, going dark.

Why these two platforms matter

Polymarket and Kalshi represent two very different models of prediction markets, and India’s willingness to target both tells you something about the scope of this crackdown.

Polymarket operates on the Polygon blockchain and settles all trades in USDC stablecoin. It’s decentralized in architecture, permissionless in access, and has become the dominant venue for political and event-based betting globally. Its rise during election cycles has made it a cultural phenomenon, but also a regulatory target.

Kalshi takes the opposite approach. It’s regulated by the US Commodity Futures Trading Commission and offers event contracts through a traditional exchange structure. It even allows crypto deposits, bridging the gap between conventional finance and digital assets. Being CFTC-regulated gives Kalshi legitimacy in the US, but that credential carries zero weight with Indian regulators who view the underlying activity as illegal betting regardless of who supervises it.

The fact that India is blocking both, the crypto-native decentralized platform and the federally regulated US exchange, suggests this isn’t about regulatory arbitrage or compliance gaps. India is making a categorical judgment that prediction markets are gambling, and no amount of regulatory packaging changes that classification.

What this means for crypto and prediction markets

India is one of the largest retail crypto markets in the world. Losing access to prediction markets won’t directly crash token prices, and so far there hasn’t been significant volatility in response to the news. But the downstream effects are worth watching closely.

Look, Polymarket’s entire value proposition depends on liquidity and participation. India represents a massive pool of potential users. Cutting off that pool doesn’t just affect Polymarket’s growth trajectory; it sends a signal to other jurisdictions considering similar moves. If the world’s largest democracy classifies prediction markets as illegal gambling, it gives cover to regulators in Southeast Asia, the Middle East, and parts of Africa who may have been on the fence.

For Kalshi, the implications are arguably more significant. The platform has been aggressively expanding internationally, and its CFTC regulation has been a core selling point. India’s decision to block it anyway undermines the narrative that US regulatory approval provides a global passport. International platforms looking to scale will need country-by-country compliance strategies, not a single regulatory seal of approval.

The VPN warning is perhaps the most consequential detail for crypto broadly. India isn’t just blocking platforms; it’s pressuring the infrastructure that enables circumvention. If VPN providers operating in India begin complying with these directives, it sets a precedent that extends far beyond prediction markets. Any crypto platform that relies on Indian users accessing it through VPNs to bypass existing restrictions should be paying attention.

There’s also a liquidity reallocation question. Indian traders who were active on Polymarket and Kalshi will either exit event-based trading entirely or seek offshore alternatives. History suggests they won’t all quit. Some portion of that activity will migrate to platforms with even less regulatory oversight, which is the classic unintended consequence of prohibition-style regulation.

For investors tracking the prediction market sector, the key variable to monitor is whether other major economies follow India’s lead. The EU’s MiCA framework doesn’t explicitly address prediction markets, and the US has been moving toward regulated acceptance through Kalshi’s CFTC approvals. But India’s aggressive posture could influence regulatory conversations in countries that haven’t yet taken a position, particularly in regions where online gambling laws are already strict.