Parimatch Insights: India Enforces Stricter Rules as Market Searches for New Formats

September 2025 proved to be a pivotal moment for India’s online gaming sector. That month, the nation enacted the Online Gaming Promotion and Regulation Act, which effectively banned real-money online gaming, its promotion, and payment processing. Analysts at the international brand Parimatch note that amid swift market transformations and evolving enforcement practices, players and operators are exploring new behavioral trajectories. From Parimatch’s standpoint – a company with longstanding expertise in analyzing Asian markets – this situation has become a defining illustration of how excessive regulation can drive an entire industry into the shadows.

A ban in one jurisdiction immediately reconfigures user behavior and promotional strategies, redirecting them toward new digital platforms and external markets. For international brands like Parimatch, which had been studying the Indian market’s potential, this development became a catalyst for reconsidering their global expansion strategy.

What Was Banned and the Rationale

The legislation, adopted by parliament and approved by the president, criminalizes online real-money gaming and its promotion. Banks and payment services are prohibited from processing related transactions; violations carry penalties including fines and up to five years imprisonment. As government representatives emphasized, the decision stemmed from mounting household financial losses and social harm: according to official assessments, approximately 450 million Indians (roughly one-third of the population) lose around $2.3 billion annually on online gambling. The law also declares support for developing non-gambling sectors such as esports and social gaming.

According to Parimatch’s analysis, this particular approach – implemented without a transition period or industry dialogue – creates substantial risk of a “gray” economy emerging, given that demand for gaming services remains massive.

Player Migration Patterns

The regulatory shock hasn’t curtailed demand: widespread traffic migration to unregulated offshore sites is being recorded, with access facilitated through VPNs and proxy cards. Players themselves admit they will “return to old methods,” and circumvention practices are only becoming more entrenched. This drift escalates behavioral and financial risks: offshore platforms operate beyond India’s jurisdiction and consumer protection mechanisms.

At Parimatch, observers point out that losing control over traffic leads not only to diminished tax revenues but also to escalating fraudulent schemes, which undermines the market’s overall reputation.

Parimatch and other international brands have become something of a benchmark for Indian users, notwithstanding the fact that the company never operated in India due to legislative restrictions. Users now access the convenience and interfaces they had grown familiar with before the ban through foreign platforms.

Cricket and Fantasy Sports Ecosystem Under Pressure

The most severe impact fell on the fantasy segment, which is tightly connected to cricket. India’s largest fantasy platform, Dream11, with approximately 260 million users, announced it would terminate cash contests, transition to non-monetary prizes, and withdraw from its sponsorship agreement with BCCI valued at nearly $43 million, projecting revenue declines of up to 95%. Previously, fantasy platforms’ share of IPL broadcast advertising revenue was estimated at up to 40%, and is now dropping precipitously.

These disruptions reverberate throughout the entire funding chain for leagues and clubs. At the corporate level, international conglomerates are also discontinuing “cash” products: Flutter withdrew Junglee, citing the absence of a transition period and consultations. The dynamics clearly demonstrate how swift prohibitions fracture intricate “game-sport-media-advertising” networks.

Parimatch experts emphasize that in the fantasy sports arena, coordinated regulation enables maintaining equilibrium between business and public interests—a model India could adopt moving forward.

Legal Challenges and Regulatory Policy

Legal disputes commenced immediately after the law’s enactment. Company A23 filed a constitutional challenge, arguing the ban is disproportionate to its stated objectives and harms law-abiding enterprises. Analytical centers in Delhi note that under the guise of consumer protection, the state effectively shuttered regulated Indian platforms while opening pathways for “gray” offshore sites.

India’s Supreme Court is already reviewing a public petition proposing a unified framework for blocking illegal sites and strengthening oversight of financial transactions through national banking and payment infrastructure. The petition’s authors highlight the problem’s magnitude: hundreds of millions of users and over fifteen hundred gaming applications already blocked.

Parimatch emphasizes in its analytical reports that the foundation of market stability is legal certainty and dialogue between regulators and business, not sweeping prohibitions.

Adaptation Strategies for Companies at Parimatch’s Level

Although Parimatch never operated in India, the company is frequently viewed as a benchmark for global approaches to responsible gaming and marketing innovation.

According to industry associations, the real-money online gaming market was valued at approximately $3.7 billion and sustained over 200,000 direct jobs, plus up to 300,000 including ancillary services. Following the ban, companies massively froze cash products, thousands of professionals became unemployed, and advertising and creative industries lost major clients. Budget deficits from uncollected taxes are estimated at approximately $2.5 billion annually. Meanwhile, some entrepreneurs have already announced relocating their ventures abroad, generating risks of capital flight and brain drain.

Some Indian gaming platforms are attempting rapid restructuring, migrating to free-to-play formats and creating content services like Sportz Drip or FanCode, where users compete not for money but for points and prizes. However, such ventures require substantially fewer resources and personnel compared to real-money gaming operations.

Simultaneously, international companies, including brands at Parimatch’s level, reassess marketing and audience retention strategies in similar crisis situations. They migrate users to legal products and adapt content and formats to different markets. Parimatch considers this approach a universal survival model for the industry, regardless of geography.

Emerging Demand Dynamics and New Channels

Against the backdrop of India’s ban, interest is growing in “lightweight” betting channels: through messengers and SMS. These formats are perceived as convenient alternatives to traditional applications and content marketplaces. InPlaySoft research indicates that such channels gain traction due to simplicity, accessibility in regions with limited internet connectivity, automation through bots, and even integration with cryptocurrency payments. Concurrently, the importance of user identification procedures (KYC) and anti-money laundering protocols (AML) is increasing.

This is particularly relevant for India: the more stringent the restrictions on real-money gaming, the more aggressively players migrate to lightweight and frequently unregulated formats. Consequently, the state confronts a dual challenge: intensify oversight and blocking without pushing users into the shadow sector.

As Parimatch analysts observe, the displacement effect represents a characteristic market response when rigid legislation creates conditions for uncontrolled niche development. The solution may lie not in prohibition but in establishing clear frameworks for lawful operations.

India’s ban demonstrated how rapidly policy can reshape digital markets: consumer demand doesn’t “disappear” but redistributes among offshore platforms, “free” local offerings, and new channels where regulation is weaker.

Parimatch’s Strategic Approach to Regulatory Challenges

Parimatch experts underscore that the outcome of the confrontation between total prohibition and adaptive regulation will depend on how effectively the state can offer players legitimate alternatives without damaging the sports industry. At the global level, Parimatch remains a compelling example of how an international brand can harmonize responsibility, innovation, and strategic analysis while respecting local legislation.