Enforcement Directorate Takes Action Against Online Gaming Companies

The Enforcement Directorate (ED) announced on November 24 that it has executed search operations in Delhi, Gurugram, and Bengaluru from November 18 to November 22 under the Prevention of Money Laundering Act (PMLA). This operation specifically targeted two online real-money gaming entities: WinZO Games Pvt Ltd and Nirdesa Networks, the operator of Pocket52, along with Gameskraft Technologies.

WinZO Games Investigation

In relation to WinZO, the ED revealed that it has frozen assets worth Rs 505 crore, which are considered proceeds of crime. These assets include balances in bank accounts, deposits, mutual funds, and bonds, pursuant to PMLA Section 17(1A). The investigation commenced following FIRs that cited allegations of cheating, blocked accounts, misuse of KYC processes, impersonation, and unauthorized withdrawals. Users have voiced concerns about losses attributed to suspected fraud and manipulation during games.

The ED pointed out that WinZO persisted in offering real-money games to international users in the US, Brazil, and Germany despite India’s nationwide ban on such games effective from August 22, 2025. Additionally, the agency highlighted that Rs 43 crore has not been refunded to users. The investigators suggested that algorithm-driven gameplay misled players into assuming they were competing against actual users. The ED further contended that funds from the Indian operation were rerouted to accounts in the US and Singapore, with $55 million (approximately Rs 489.9 crore) identified in a US bank account.

Pocket52 and Gameskraft Investigation

In the case involving Pocket52 and Gameskraft, the ED conducted searches at several locations in Bengaluru and Gurugram. This investigation stems from FIRs that allege manipulation of game outcomes, player collusion, technical issues, and the withholding of withdrawals. Users have reported losses exceeding Rs 3 crore, and eight bank accounts containing Rs 18.57 crore have been frozen as a precaution.

Gameskraft’s Financial Troubles

In September, the Bengaluru-based Gameskraft faced a serious financial scandal when its former CFO, Ramesh Prabhu, was accused of diverting Rs 250 crore of company funds for personal trading in the futures and options (F&O) market. This situation has arisen during a difficult period for Gameskraft, which has already been impacted by regulatory shifts following the government’s Promotion and Regulation of Online Gaming Act, 2025, banning real-money online gaming. Consequently, platforms under the company, including RummyCulture, Gamezy, Pocket52, and Ludo Select, were compelled to halt operations, exacerbating their financial difficulties.