Stake and the Shadow Economy: The Legal Grey Zone of Online

In 2025, India's online gaming landscape is at a critical juncture. Platforms like Stake, an offshore-based online casino and sportsbook, operate in a legal grey area, exploiting regulatory ambiguities and technological loopholes. While offering Indian users access to real-money games and sports betting, these platforms circumvent domestic laws and operate in what is called the proverbial grey zone.

One of the most prominent aspects of Stake’s public image globally has been its high-profile association with rapper and global celebrity Drake. This partnership is not just a marketing stunt; it underscores the scale and ambition of offshore betting platforms and makes their reach into countries like India all the more consequential. Stake’s partnership with Drake—publicized through livestreamed gambling sessions, multimillion-dollar giveaways, and branded social media content—has catapulted the brand into global visibility. The collaboration has positioned Stake as a glamorous, high-roller destination, targeting younger audiences who follow celebrity trends.

Because Stake’s platform remains accessible in India via mirror websites and VPNs, these marketing efforts effectively bypass national advertising bans and regulatory scrutiny. Indian users, influenced by celebrity partnerships like Drake’s, are drawn into a world where the lines between entertainment, gambling, and influencer culture are blurred.

This exposes several problems:

Regulatory Evasion: While Indian gaming laws restrict betting advertisements (especially celebrity-endorsed ones), offshore platforms piggyback on global campaigns to reach Indian users indirectly.
Youth Appeal: Celebrity marketing dramatically increases engagement among younger, tech-savvy audiences—often the most vulnerable demographic in terms of addiction and irresponsible spending.
Influencer Responsibility: Despite multiple government advisories warning celebrities and influencers against promoting online betting, international stars are beyond India’s jurisdiction.

Stake’s global marketing strategy, backed by figures like Drake, is effective precisely because of its scale. It avoids local regulation by operating on a transnational level, even as it draws millions from unregulated Indian deposits. While Indian influencers have faced warnings and fines, Drake continues to host multimillion-dollar campaigns for Stake with no legal consequences in India. In that sense, India’s regulatory framework isn’t just behind on enforcement—it’s outpaced by a new, decentralized form of platform marketing. That creates an uneven playing field for India’s regulated gaming companies, who are bound by strict advertising rules while international competitors continue to grow via celebrity-driven global campaigns.

Drake’s partnership with Stake has done more than generate buzz—it has helped normalize and glamorize unregulated gambling. For Indian regulators, the challenge is not only about blocking websites or chasing unpaid taxes. It’s also about understanding how global digital culture can bypass national boundaries, and how influencers like Drake are unwittingly shaping consumer behavior in places with vastly different legal standards.

The Legal Ambiguity of Offshore Platforms

India's legal framework for online gambling is fragmented. The Public Gambling Act of 1867, a colonial-era law, does not address online gambling, leading to varied interpretations across states. Some states, like Telangana and Andhra Pradesh, have explicitly banned online gambling, making platforms like Stake illegal within their jurisdictions. In contrast, other states lack clear regulations, allowing offshore platforms to operate without explicit prohibition.

Stake, licensed in Curacao, capitalises on this regulatory vacuum. By operating offshore, it avoids Indian licensing requirements and taxes, while still targeting Indian users through localized content and payment options. This approach places Indian users in a precarious position, as they engage with platforms that are neither fully legal nor adequately regulated. While these platforms operate freely and rake in billions from Indian users, they exist in a legal vacuum—neither explicitly permitted nor fully banned—creating serious concerns for regulators, domestic operators, and consumers alike.

Meanwhile, states like Sikkim and Nagaland have licensing frameworks, but these are not uniformly applied across India. Offshore platforms exploit this legal patchwork to full effect. Most are registered in jurisdictions like Curacao or Malta, which offer lax oversight and tax benefits. These companies do not require an Indian license, yet they openly target Indian consumers through mirror websites, influencers, and regional payment gateways that accept INR deposits. For example, Stake, which is licensed in Curacao, technically operates outside the jurisdiction of Indian law enforcement but continues to attract Indian users via crypto-friendly transactions and a localized user interface.

Adding to the problem is the use of cryptocurrencies. Stake and similar platforms primarily operate with Bitcoin and other digital assets, enabling them to bypass Indian banking systems. This allows users to deposit and withdraw funds without triggering the scrutiny that would accompany traditional payment methods. It also makes it extremely difficult for Indian regulators to track financial flows or impose tax obligations.

This lack of legal clarity has direct consequences. For one, there is significant tax leakage. According to recent reports, the Directorate General of GST Intelligence (DGGI) has identified over 700 offshore gaming websites that have evaded taxes. In just one crackdown ahead of IPL 2025, the DGGI blocked 357 such platforms and froze ₹126 crore in Indian bank accounts. But enforcement remains piecemeal and reactionary.

Consumers, too, face considerable risks. With no regulatory oversight or grievance redressal, Indian users engaging with offshore platforms are vulnerable to fraud, data breaches, and arbitrary account freezes. Moreover, the lack of responsible gaming mechanisms—like deposit limits or age verification—heightens the danger of addiction and financial distress, particularly among youth.

The legal ambiguity surrounding offshore gaming platforms stems from the disconnect between India’s outdated laws and the new digital economy. Without a centralized, modern legal framework that addresses offshore operations, cryptocurrency transactions, and digital advertising, India remains exposed to financial, legal, and consumer protection risks.

Tax Evasion and Economic Impact

The financial implications of unregulated offshore gaming are substantial. The Directorate General of GST Intelligence (DGGI) has identified over 700 offshore gaming entities evading Goods and Services Tax (GST) obligations. In response, authorities have blocked 357 such websites and frozen approximately ₹126 crore across 2,400 bank accounts.

Despite these efforts, the offshore gaming market continues to thrive. A report by the Think Change Forum estimates that offshore sports betting platforms receive deposits amounting to approximately ₹8.2 lakh crore annually, growing at a rate of 20% per year. This not only results in significant tax revenue loss but also undermines domestic gaming companies that comply with Indian regulations.

Tax Evasion and Economic Impact of Offshore Betting Platforms in India

The economic footprint of offshore online betting platforms in India has expanded rapidly over the past few years, but much of this growth has occurred outside the country’s formal financial system. Platforms like Stake, which operate from jurisdictions such as Curacao or Malta, cater heavily to Indian users without adhering to Indian tax or regulatory norms. This results in significant tax evasion, and its ripple effects are being increasingly felt across the Indian economy.

One of the most pressing concerns is the massive loss of Goods and Services Tax (GST) revenue. Offshore gaming platforms, by virtue of being unregistered in India, do not pay GST on their services despite generating substantial revenue from Indian users. In response, the Directorate General of GST Intelligence (DGGI) has launched multiple crackdowns. In early 2025, for instance, the DGGI blocked 357 offshore websites and froze approximately ₹126 crore across 2,400 bank accounts linked to these platforms. However, such efforts often lag behind the ever-evolving digital strategies these companies employ, including use of mirror domains and cryptocurrency.

The magnitude of this economic leakage is staggering. According to a study by the Think Change Forum, deposits on offshore sports betting platforms from India are estimated at ₹8.2 lakh crore annually, with a projected annual growth rate of around 20%. These transactions often escape formal banking systems, thanks to the use of cryptocurrencies, third-party payment processors, and proxy wallet services. Not only do these mechanisms help operators avoid GST, but they also circumvent income tax reporting requirements for users.

In contrast, domestic gaming companies that comply with Indian law are at a serious disadvantage. They are required to pay GST at a rate of 28% on the full face value of bets, comply with KYC norms, and operate within advertising and user protection restrictions. Offshore platforms, by comparison, operate in a low-compliance, high-profit model, allowing them to offer better odds, higher bonuses, and more aggressive marketing strategies. This uneven playing field is stifling the growth of India’s legitimate online gaming sector.

Beyond revenue losses, the economic impact also includes capital flight. Since Indian users often deposit funds in foreign currency or cryptocurrency, the money effectively leaves the Indian financial system with minimal traceability. These platforms then repatriate profits to jurisdictions with low or zero tax rates, eroding India’s capital base and creating a parallel digital economy that is largely unregulated.

There are also broader economic risks. The absence of controls on fund flows opens the door for money laundering, terrorist financing, and illicit trade. Without regulatory visibility, it becomes nearly impossible for Indian authorities to monitor how these funds are used or whether they are linked to unlawful activity.

In the rapidly evolving landscape of digital entertainment, few platforms have managed to capture the essence of innovation and user-centric design as effectively as Stake India .

Lets talk about Stake India

Stake India has emerged as a formidable player in the online gambling and sports betting industry, particularly within the Indian market. The platform offers a comprehensive suite of gaming options, including classic casino games like roulette, blackjack, and baccarat, as well as an extensive array of video slots and live dealer experiences. For sports enthusiasts, Stake India provides real-time betting on global sports events, encompassing cricket, football, basketball, and tennis, among others.

One of Stake India's standout features is its user-friendly interface. The platform's design facilitates seamless navigation, allowing users to effortlessly transition between different gaming sections. Whether accessing the site via desktop or mobile, players are greeted with a responsive and intuitive layout that enhances the overall user experience.

In an era where digital transactions are becoming the norm, Stake India's integration of cryptocurrency for deposits and withdrawals is a strategic move. This not only ensures secure and private transactions but also positions the platform at the forefront of financial innovation within the gaming industry. The use of blockchain technology adds an extra layer of transparency and trust, which is crucial for user retention and satisfaction.

The platform offers tools and resources to help players maintain control over their gaming activities, including setting deposit limits and self-exclusion options. Infact, in a saturated market, Stake India distinguishes itself through a combination of diverse gaming options, innovative features, and a strong commitment to user satisfaction. The platform's ability to offer both casino games and sports betting under one roof provides a comprehensive entertainment solution that caters to a wide audience. Additionally, the integration of live streaming and instant withdrawals enhances the platform's appeal to modern gamers seeking immediacy and engagement.

The India Opportunity for Gaming and Online Casino platforms

India's burgeoning digital economy presents both opportunities and challenges for online gaming platforms. With a population exceeding 1.4 billion and increasing internet penetration, the potential user base is vast. However, navigating the complex regulatory landscape requires strategic foresight and adaptability. Stake India's focus on compliance and user protection positions it well to capitalize on this growing market while maintaining ethical standards.

India, with its vast population, burgeoning internet penetration, and growing disposable income, presents one of the most attractive emerging markets for the global gaming industry. In particular, the country’s online casino and real-money gaming segment has become a focus for both domestic startups and offshore giants seeking to tap into a digitally savvy and entertainment-hungry audience. While the legal landscape remains complex and fragmented, the India opportunity is undeniable—offering scale, growth, and potential profitability that few other markets can match.

A Massive, Untapped Market

India is home to over 1.4 billion people, with more than 750 million internet users as of 2024. The country’s digital ecosystem has rapidly matured thanks to affordable smartphones, cheap data, and widespread mobile payment infrastructure. According to a report by KPMG, the Indian online gaming industry is expected to grow to $5 billion by 2025, driven by real-money games, esports, fantasy sports, and skill-based mobile gaming. Among these segments, real-money gaming (RMG) and online casino-style formats—such as poker, rummy, slots, and sports betting—are experiencing the fastest growth. India’s young, urban, mobile-first population is increasingly drawn to games that offer not only entertainment but also the thrill of potential earnings.

Even under the weight of regulatory ambiguity, the sector has flourished. Research from Statista estimates that the number of online gamers in India will exceed 500 million by 2025, up from around 450 million in 2023. The average revenue per user (ARPU) in real-money gaming is also increasing, reflecting a user base that is more willing to spend than ever before.

Unlike traditional gambling hubs in the West, India’s relationship with games of chance has historical roots in culture and tradition. Games like dice, cards, and betting have been part of Indian society for centuries, particularly during festive seasons. The rise of digital platforms has simply brought these experiences online, in a format that aligns with modern lifestyles.

India also enjoys a demographic dividend. With over 65% of the population under the age of 35, the market is dominated by Gen Z and millennial users who are comfortable with technology, mobile payments, and digital content. These consumers are not only playing games but also streaming them, participating in tournaments, and engaging in gaming communities on platforms like YouTube, Discord, and Twitch.

Moreover, the growth of regional content and language localization has significantly expanded reach. Companies offering online casino-style games in Hindi, Tamil, Telugu, Bengali, and Marathi are experiencing increased engagement and retention rates. The ability to offer culturally resonant experiences is a key differentiator in the Indian market.

The Rise of Digital Payments and Cryptocurrency

A significant factor in the viability of online casino platforms in India is the rapid adoption of digital payments. India has become a global leader in digital transaction volume, with the Unified Payments Interface (UPI) facilitating over 13 billion transactions per month as of 2024, according to the National Payments Corporation of India (NPCI). This has made it easier than ever for users to deposit and withdraw funds on gaming platforms.

In addition to UPI, users are increasingly experimenting with cryptocurrency, especially when engaging with offshore platforms like Stake or 1xBet. Bitcoin, Ethereum, and stablecoins are used to bypass Indian banking restrictions, enabling users to play on international platforms even when traditional payment channels are blocked. While this raises legal concerns, it also highlights user demand and the market’s adaptability.

Given India’s growth potential, it’s no surprise that international platforms have taken notice. Offshore casinos and betting sites are heavily targeting Indian users through localized marketing, influencer partnerships, and aggressive promotions. Platforms like Stake, Parimatch, and 1xBet have created India-specific mirror sites, hired Indian brand ambassadors, and even supported cricket and IPL-themed advertising campaigns—often dancing on the edge of legality.

In many cases, these platforms operate in a regulatory grey zone. While they are not licensed to operate in India, they avoid direct bans by using crypto transactions, VPN-accessible domains, and white-label payment services that mimic domestic wallets. Their agility, combined with their global tech infrastructure, gives them a significant edge over India-based companies that must comply with strict tax and advertising laws.

Even global investment funds are beginning to eye India’s RMG space. In 2023, gaming startups in India raised $600 million in venture funding, according to Inc42, with a large portion going to fantasy sports, rummy, and poker platforms.

Highlighting the India Opportunity

Market Size: According to KPMG, India's online gaming market is projected to reach $5 billion by 2025, growing at a compound annual growth rate (CAGR) of over 20%. Real-money games make up more than 50% of this total. The global online sports betting market is projected to reach $50.96 billion in 2025, with an expected annual growth rate of 6.33%, resulting in a projected market volume of $65.14 billion by 2029.
User Base Growth: Statista projects that India will have 500+ million online gamers by 2025, up from 450 million in 2023, making it the second-largest gaming population in the world. Esports and live streaming are attracting large user bases, with the esports industry expected to surpass $3 billion in revenue by 2025 and monthly viewership reaching over 700 million people.
Digital Payments Volume: As per the National Payments Corporation of India (NPCI), UPI processed over 13 billion transactions in a single month in 2024, illustrating the strength and scale of India’s digital economy—an essential enabler for real-money gaming. Blockchain technology and NFTs are transforming how players own in-game assets, enabling secure and transparent transactions. Play-to-earn games are creating new economic models where gamers can earn real money from virtual items.
Adoption of Virtual and Augmented Reality: VR and AR are becoming mainstream, offering immersive gaming experiences. With the launch of more affordable and advanced VR headsets, the experience of immersive worlds is becoming more accessible.
Expansion of Mobile Gaming: Mobile games account for over 50% of the gaming industry’s total earnings, and mobile-first design is becoming a necessity. Platforms are optimizing for seamless performance on any device, ensuring players have a frictionless experience wherever they play.

Despite the massive opportunity, several challenges persist. The most pressing is regulatory uncertainty. India lacks a unified national framework governing online gaming. States have adopted conflicting stances—some banning real-money games entirely, others offering licenses for skill-based gaming. This patchwork of regulation makes long-term investment and product planning difficult for both domestic and international companies.

The tax regime is another major obstacle. The GST Council recently ruled that all online gaming involving money—even games of skill—should be taxed at 28% on the full value of bets. This decision could affect platform profitability and user behavior, and create a larger incentive for users to turn to offshore alternatives that don’t pay GST. Additionally, public perception remains mixed. Gaming is often equated with gambling in India, and concerns around addiction, underage users, and financial irresponsibility have attracted political scrutiny. This could result in stricter advertising controls and financial regulations.

Driven by technological advances, increased internet penetration, affordable smartphones, and a growing youth population, the country has seen a surge not only in casual and real-money gaming but also in deeper, more immersive formats like MMORPGs (Massively Multiplayer Online Role-Playing Games). Alongside MMORPGs, several new gaming trends are emerging—esports, real-money skill gaming, virtual casinos, blockchain-based games, and AI-generated interactive gaming environments. However, with great growth comes the question of governance. As these genres expand their reach, India’s current legal framework—largely inherited from colonial-era laws—is proving inadequate.

But then, Monetized items and character trading may fall under financial or gambling scrutiny. The In-game purchases (microtransactions) raise consumer protection and addiction concerns. Data privacy laws will need to cover multiplayer user data and in-game communication logs.

Esports too has become a multi-billion dollar global industry, and India is quickly catching up. Games like BGMI, Valorant, Dota 2, and CS:GO have spawned a competitive ecosystem with tournaments, sponsors, streamers, and fans. In 2024, India hosted multiple esports events with prize pools exceeding ₹1 crore, and platforms like YouTube Gaming and Loco are investing in homegrown talent. A FICCI-EY 2024 report estimates that India’s esports industry will grow at a CAGR of 35% and surpass ₹1,100 crore by 2025. The sector is also likely to be included in the Asian Games 2026—further legitimizing it.

Real-money gaming (RMG) continues to thrive in India, especially with games like rummy, poker, fantasy sports, and Ludo being positioned as games of skill. While legal in several states, the GST Council’s recent decision to impose a 28% tax on the full face value of bets—even for games of skill—has shaken the industry. Indian platforms like Dream11, MPL, and Gameskraft are at the center of this growing segment. However, offshore operators, such as Stake and 1xBet, exploit legal ambiguity to siphon Indian users without paying taxes or ensuring user protection.

Blockchain gaming too is in its infancy in India, but interest is rapidly rising. Play-to-earn (P2E) games like Axie Infinity and The Sandbox allow players to earn NFTs and tokens that hold real-world value. Indian players have begun participating in these global ecosystems, using crypto wallets and digital exchanges to transact in-game assets. While the government has not outright banned crypto, it has imposed a 30% flat tax on digital asset gains, and regulatory frameworks around NFTs remain uncertain.

Games like Among Us, Ludo King, and Houseparty reflect another fast-growing genre: social/casual gaming. These games are built around friendships, multiplayer interaction, and ease of play. Often monetized via ads or in-app purchases, they have become a dominant force among Indian users across Tier 2 and Tier 3 cities. A study by Statista shows that more than 65% of gamers in India play socially or casually, particularly on mobile.

With the rise of AI, a new genre of interactive storytelling and AI-driven character behavior is emerging. Games are increasingly using natural language processing (NLP) and generative AI to create personalized stories, character interactions, and quests. Startups in India and abroad are experimenting with this. Imagine a game where your choices dynamically change the narrative, or an AI-powered NPC (non-player character) learns your strategies over time.

As these genres continue to evolve, India’s regulatory structure is slowly beginning to catch up. Currently, the Public Gambling Act of 1867 serves as the default central law—but it does not address digital gaming. In its absence, states have created their own laws, leading to a chaotic patchwork of rules. However, momentum is building for a centralized, forward-looking framework.

Here’s what future regulation might look like:

1. National Online Gaming Policy

The government is reportedly working on a central law to govern all online gaming activities. This would:

Create a unified licensing system.
Differentiate between skill-based and chance-based games.
Establish age-gating and KYC norms for all platforms.

2. Creation of a Gaming Regulator

Much like SEBI governs securities or TRAI regulates telecom, the industry needs a dedicated Gaming Regulatory Authority. This body would:

Approve game mechanics and monetization structures.
Monitor compliance with tax laws.
Address grievances from consumers.

3. Reclassification of Games

Rather than dividing games into just ‘skill’ or ‘chance’, regulators may adopt a risk-based classification. For instance:

Casual games: Light touch regulation.
Competitive esports: Contractual oversight.
RMG platforms: Financial compliance, addiction safeguards, tax norms.
Blockchain/NFT games: Crypto regulation and financial transparency.

4. Stronger Tax and Crypto Oversight

With GST collections becoming a government priority, gaming platforms—domestic and offshore—will likely face:

Mandatory registration and periodic disclosures.
Integration with payment processors for real-time GST collection.
Greater scrutiny of crypto-based revenue flows.

5. Child Safety and Responsible Gaming Rules

Future regulations will likely mandate:

Parental controls and time limits.
Transparent loot box odds.
Disclosures for in-game purchases.
Mandatory warnings for gambling-style mechanics.

India is at a pivotal point in its gaming evolution. MMORPGs and other advanced gaming formats are not just forms of entertainment—they represent economic opportunity, cultural influence, and social connectivity. But as these sectors expand, the need for smart, nuanced regulation becomes critical. Rather than stifling innovation, India’s regulatory focus should be on creating clarity, ensuring safety, enabling fair play, and securing its tax base. With over half a billion gamers, the future of India's gaming economy depends on how effectively the country adapts to this dynamic digital frontier.

Despite these challenges, the Indian gaming market is poised for sustained growth over the next decade. As policymakers move toward a more centralized regulatory structure—such as through proposed Digital India legislation or a national gaming authority—the sector is likely to gain both legal clarity and investor confidence. For global and domestic platforms alike, the key to long-term success in India will be compliance, localization, and innovation. Platforms that offer safe, responsible, and culturally tuned gaming experiences—while staying aligned with evolving laws—will be well-positioned to capture market share. While regulatory grey zones persist, the sheer size of the opportunity makes India an essential market for any serious global player in the online casino and real-money gaming space.