By Saurav Mehra No, colour trading is illegal in India. Despite being dressed up in financial-sounding language — “trading,” “prediction,” “investment” — colour trading apps are straightforward betting games, and Indian law treats them accordingly. This was already illegal gambling before 2025 under existing law, and the Promotion and Regulation of Online Gaming Act, 2025 (in force since May 1, 2026) has since made the prohibition even more explicit and aggressively enforced.
What Colour Trading Actually Is
Colour trading is an online game where you pay money to predict which color — typically red, green, or violet — will appear at the end of a short countdown, often lasting just 30 seconds to a few minutes. Apps in this space frequently brand themselves using terms like “colour trading,” “prediction markets,” or “earn-from-home platforms” specifically to sound like legitimate financial activity. But stripped of the marketing language, this is a pure game of chance with no underlying asset, no real investment, and mathematically guaranteed losses for users over time — regulators, police, and courts consistently treat it as gambling regardless of what label the app uses.
Why It Was Already Illegal Before 2025
Even before the recent national law, colour trading had no legal standing in India, for several overlapping reasons:
- The Public Gambling Act, 1867 — India’s oldest gambling law — prohibits operating or visiting any “common gaming house” and participating in games of chance played for money. Since colour trading involves betting real money on a purely random outcome, it falls squarely within this definition.
- Colour trading apps are not registered with SEBI, RBI, or any recognized financial authority. This matters because legitimate trading in India must happen through regulated channels involving real, identifiable assets (stocks, commodities, currencies) — colour trading involves none of this, it’s purely a guess on a randomly generated outcome.
- State-specific gambling laws add a further layer of restriction, with most Indian states prohibiting this kind of real-money betting activity, even though enforcement historically varied somewhat by state before the 2025 national framework.
The 2025 Online Gaming Act Closed the Remaining Gaps
This is the law that definitively settled any ambiguity that might have existed around online, app-based colour prediction games specifically.
- The Promotion and Regulation of Online Gaming Act, 2025 was passed by the Lok Sabha on August 20, 2025, and the government notified its implementing rules on April 22, 2026, bringing the Act into force on May 1, 2026.
- The Act creates a comprehensive national licensing and regulatory framework for online gaming, explicitly distinguishing legitimate e-sports and online games from online gambling and real-money betting, which it bans outright.
- Real-money colour prediction games are specifically and explicitly banned under this Act — colour trading apps were directly targeted in subsequent website and app blocking orders carried out under the law.
- At the state level, Tamil Nadu’s 2025 online gaming regulations separately banned all real-money games of chance, explicitly including colour prediction — reinforcing the national prohibition with state-specific enforcement.
Why Depositing Money Isn’t “Investing”
A core part of how these apps mislead users is by framing a deposit as an investment rather than what it actually is — a bet.
- Depositing money on a colour trading app is not a financial investment in any legal or practical sense — it’s placing a wager on a randomly generated (and in many documented cases, manipulated or rigged) outcome, with no legal protection whatsoever for the funds involved.
- These apps aren’t registered with any trusted financial body in India, give little to no verifiable information about who actually operates them, and commonly rely on referral networks that effectively turn existing users into recruiters for the platform — a pattern consistent with how many such schemes have been documented to actually function.
- When an app freezes a withdrawal or shuts down abruptly (a well-documented, recurring pattern across platforms like 91 Club, Tiranga, BDG, Wingo, and similar apps), there is no legal body or regulator you can turn to for recourse, since these platforms exist entirely outside any regulated financial or gaming framework.
Specific Apps Repeatedly Flagged as Illegal
Several named colour trading platforms have been specifically identified across multiple sources as operating illegally in India, including 91 Club, Tiranga Games, Daman Games, BDG, Wingo, IN999, 55 Club, RXCE/Cooe, and MantriMall, among others. Many of these apps aren’t available through legitimate channels like the Google Play Store or Apple App Store, specifically because they violate those platforms’ policies against unregulated gambling — meaning their availability is often limited to direct APK downloads or informal distribution channels, itself a signal worth taking seriously.
Taxation Still Applies — Even to Illegal Gambling Winnings
This is a detail worth knowing, since it surprises people who assume illegal winnings exist entirely outside the tax system.
- All gambling winnings in India are taxable at a flat 30% rate under Section 115BB of the Income Tax Act, regardless of whether the underlying activity (like colour trading) was itself legal. The illegality of the activity doesn’t exempt any winnings from this tax obligation — it simply means you’re accumulating tax liability on income earned through an illegal, unprotected channel.
Frequently Asked Questions
Q1. If an app calls itself “colour trading” instead of “colour betting” or “gambling,” does that change its legal status?
No — courts, police investigators, and regulators look at the actual substance of the activity (a real-money wager on a random outcome) rather than the marketing label a platform chooses to use; calling it “trading” or a “prediction market” doesn’t change its classification as gambling under Indian law.
Q2. Are 91 Club and Tiranga specifically illegal, or just unregulated?
Both are illegal — they’re colour prediction gambling platforms operating without any registration from SEBI, RBI, or any recognized gaming authority, and they fall squarely within the activities prohibited under both the Public Gambling Act, 1867, and the 2025 Online Gaming Act.
Q3. What happens if a colour trading app refuses to let me withdraw my winnings?
Since these platforms operate entirely outside any regulated legal or financial framework, there’s no regulatory body like SEBI or RBI you can approach for recourse, and because the underlying activity is itself illegal gambling, pursuing formal legal action to recover funds from such a platform is genuinely difficult, with many users having no practical path to recovering money from an app that freezes withdrawals or shuts down.
Q4. Do I still owe tax if I won money through an illegal colour trading app?
Yes — under Section 115BB of the Income Tax Act, all gambling winnings are taxed at a flat 30% regardless of whether the activity generating them was legal, meaning the illegality of colour trading doesn’t exempt any winnings you did manage to withdraw from this tax obligation.