Parimatch: India Tightens Rules as the Market Seeks New Formats

September 2025 became a turning point for India’s online gaming industry. That month, the country enacted the Online Gaming Promotion and Regulation Act, which effectively banned real-money online games, their advertising, and the processing of related payments. Analysts at the international brand Parimatch note that amid rapid shifts in regulation and enforcement, both players and operators are searching for new behavioral strategies. According to Parimatch, a long-time observer of Asian markets, this situation has become a clear example of how excessive regulation can push an entire sector into the shadows.

What Exactly Was Banned, and Why

The law, approved by Parliament and signed by the President, criminalizes online gambling for real money as well as its promotion. Banks and payment providers are prohibited from processing related transactions, with penalties including fines and up to five years in prison. Officials justified the decision by citing rising household financial losses and social harm: by official estimates, around 450 million Indians — roughly a third of the population — lose approximately $2.3 billion annually to online gambling. The act also declares support for non-gambling segments such as esports and social gaming.

According to Parimatch, such an abrupt approach — without a transition period or industry consultation — creates a high risk of fueling a “grey” economy, as demand for gaming services remains enormous.

Where the Players Are Moving

The regulatory shock did not curb demand: a significant share of traffic has shifted to unregulated offshore websites accessed through VPNs and proxy cards. Players themselves admit they are returning to “old methods,” and circumvention practices are becoming more entrenched. This migration increases behavioral and financial risks, as offshore platforms operate outside India’s jurisdiction and consumer-protection framework.

Parimatch points out that losing visibility into traffic not only reduces tax revenues but also encourages fraud schemes, hurting the overall market’s reputation. Despite never operating in India due to legal restrictions, Parimatch and other international brands have long set usability and interface standards for Indian users — standards that many are now seeking through foreign platforms.

Cricket, Fantasy Sports, and a Disrupted Ecosystem

The fantasy segment, closely tied to cricket, took the heaviest blow. India’s largest fantasy platform, Dream11 — with about 260 million users — halted all cash contests, switched to non-monetary prizes, and withdrew from a nearly $43 million sponsorship deal with the BCCI, warning of a revenue drop of up to 95%. Previously, fantasy-sports companies accounted for as much as 40% of IPL broadcast advertising income.

These shifts disrupt the entire funding chain for leagues and clubs. At the corporate level, international groups are shutting down monetary products as well: Flutter pulled out its Junglee division, citing the lack of a transition period and consultation. The trend clearly shows how rapid bans can break the intricate ties between gaming, sports, media, and advertising.

Experts at Parimatch emphasize that in fantasy sports, only balanced and coordinated regulation allows both business and public interests to coexist — a model India may look to in the future.

Legal Landscape and Regulatory Policy

Immediately after the law took effect, legal challenges began. The company A23 filed a constitutional petition arguing that the ban is disproportionate and harms compliant businesses. Think tanks in Delhi note that under the guise of consumer protection, the government effectively shut down regulated domestic platforms while opening the door to offshore operators.

The Supreme Court of India is considering a public petition calling for a unified approach to blocking illegal sites and tightening oversight of financial operations through national banking and payment systems. Petitioners highlight the scale of the issue: hundreds of millions of users and more than 1,500 already-blocked gaming apps.

Parimatch’s analytical reports emphasize that market stability depends on legal clarity and structured dialogue between regulators and businesses — not blanket prohibitions.

How Companies Like Parimatch Are Adapting

Although Parimatch has never operated in India, the brand is frequently cited as a benchmark for responsible gaming and marketing innovation. Before the ban, India’s real-money online gaming market was valued at about $3.7 billion, directly supporting over 200,000 jobs and up to 300,000 including adjacent services. Following the ban, companies froze monetary products, thousands of specialists lost jobs, and the advertising and creative sectors lost major clients. Budget losses from forgone tax revenue are estimated at around $2.5 billion annually. Some entrepreneurs have already announced plans to relocate their projects abroad, raising concerns about capital and talent flight.

Several Indian gaming platforms are rapidly restructuring, shifting to free-to-play formats and creating content services like Sportz Drip and FanCode, where users compete for points and prizes instead of cash. However, such models require far fewer resources and staff compared to real-money gaming.

Meanwhile, international companies — including high-profile brands like Parimatch — are rethinking marketing and user-retention strategies in similar crisis scenarios. They redirect users to legal products and adapt content and formats for different markets. Parimatch considers this a universal survival model for the industry, regardless of geography.

A New Demand Landscape

Amid the nationwide ban, demand is rising for “lightweight” betting channels: messenger-based and SMS-based formats. These are viewed as convenient alternatives to traditional apps and content stores. Research by InPlaySoft shows that such channels benefit from simplicity, accessibility in regions with poor internet, automation via bots, and even integration with cryptocurrency payments. At the same time, the importance of KYC and AML procedures continues to grow.

In India, this trend is particularly pronounced: the tighter the restrictions on real-money games, the more actively users shift to lightweight, often unregulated formats. As a result, the government faces a dual challenge — increasing oversight and enforcement while avoiding pushing users deeper into the shadow economy.

According to Parimatch analysts, such displacement effects are typical when strict legislative measures create incentives for uncontrolled niches to grow. A viable solution lies not in bans, but in establishing clear frameworks for legal operation.

Parimatch and the Global Lessons of India’s Ban

India’s prohibition demonstrates how quickly policy can reshape digital markets: consumer demand does not disappear — it simply redistributes across offshore platforms, local “free-to-play” products, and new lightly regulated channels. As Parimatch experts note, the outcome of the struggle between blanket bans and flexible regulation will depend on the state’s ability to offer legal alternatives without undermining the sports ecosystem. On a global scale, Parimatch remains a prime example of how an international brand can combine responsibility, innovation, and strategic foresight while respecting local laws.