Industrial dye effluents have emerged as significant health hazard. Laccases found in white rot fungi can degrade an assortment of dyes. Here, we explore the molecular thermodynamic origin of the substrate promiscuity in laccases using a combination of steady-state UV-visible absorption spectroscopy, molecular docking, and molecular dynamics (MD) simulation studies on the interaction of laccase with five dye molecules with varying charge, size, and shape. The spectroscopic studies confirm that all of these dyes can be degraded by laccase. Using MD simulations, we have demonstrated the presence of various distinct conformations of a loop in the protein active site that can accommodate the wide range of dye molecules. We have also shown that the diverse selection of dye molecules may exhibit surprisingly similar binding affinity due to cancellation of different thermodynamic factors. Our results highlight the potential of laccase as a multipurpose degrader for industrial dye effluents.