WinZO cofounders Saumya Singh Rathore and Paavan Nanda have been arrested by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA), capping a week of sweeping searches and asset freezes against the real‑money gaming startup. The duo was summoned to the ED’s Bengaluru zonal office on November 26 for questioning and was taken into custody that evening; a local court remanded them to one day of ED custody and directed that they be produced again for a detailed remand hearing.
What the ED is Alleging
According to multiple ED statements and media reports, the case against WinZO centres on four key allegations:
- Unrefunded Player Funds After Nationwide Ban
- The Union government imposed a nationwide ban on real‑money games (RMGs) with effect from August 22, 2025, under a new online gaming law aimed at curbing betting and protecting consumers.
- ED claims WinZO continued to hold around ₹43 crore belonging to gamers in wallets and escrow accounts instead of refunding the balances after the ban, in violation of the new rules.
- “Unscrupulous” Use of Algorithms
- Investigators say WinZO’s systems allegedly matched users not against real human opponents but against algorithms or software bots, without disclosing this to players.
- The ED calls this “criminal activity and unscrupulous practices,” asserting that customers were misled into believing they were playing skill games against other humans while in reality competing with rigged systems, generating illicit profits when users lost money to the algorithm.
- Overseas Operations From India After the Ban
- The agency alleges WinZO continued to run real‑money games for users in Brazil, the US, Germany and other markets from its India-based platform, using the same app infrastructure even after the domestic ban came into effect.
- ED claims that these international operations were effectively managed and controlled from India, bringing them under Indian anti‑money laundering scrutiny.
- Diversion of Funds to Overseas Shell Entities
- ED says funds from the Indian entity were diverted to US and Singapore entities “under the garb of overseas investments.”
- About USD 55 million (~₹490 crore) is alleged to be parked in a US bank account held by a WinZO-associated company which the ED describes as a shell, as day‑to‑day operations were conducted from India.
These actions, according to the agency, amount to laundering of “proceeds of crime” generated from cheating, algorithmic manipulation, and violation of the RMG ban.
Assets Frozen: Over ₹500 Crore Under PMLA
As part of coordinated search operations carried out between November 18 and 22 across Delhi, Gurugram and Bengaluru, the ED has frozen deposits worth around ₹523–524 crore linked to WinZO and another gaming platform, Gameskraft/Pocket52 operator Nirdesa Networks.
For WinZO specifically, the agency says it has frozen about ₹505 crore in:
- Bank balances
- Fixed deposits
- Bonds
- Mutual fund units
These have been provisionally attached under Section 17(1A) of the PMLA, pending further proceedings. Additional escrow accounts tied to other platforms were frozen for holding back user funds instead of refunding them after the ban.
How the Case Started
ED’s money‑laundering probe stems from earlier FIRs by state police alleging:
- Cheating and impersonation
- Blocking of user accounts when players sought withdrawals
- Misuse of PAN and KYC details
- Unexplained loss of customer funds held in wallets
These complaints were followed by the August 22 nationwide ban on RMGs, after which regulators expected platforms to shut real‑money operations and refund outstanding balances. ED says WinZO did neither fully, and instead continued to hold large sums and run games for overseas players via the same infrastructure.
WinZO’s Response
WinZO has issued brief statements asserting that:
- It is fully compliant with all applicable laws.
- “Fairness and transparency” are core to its platform design.
- It is cooperating with authorities and remains focused on “protecting users and ensuring a secure, trustworthy experience”.
The company has not yet offered a detailed public rebuttal to the specific ED allegations around algorithms, global operations, and the ₹43 crore in unrefunded user balances.
Impact on India’s Real‑Money Gaming Sector
The arrests come on the heels of ED searches at the offices of Gameskraft, Pocket52 and other RMG operators, intensifying regulatory pressure on the broader online gaming industry. Industry bodies warn that:
- The refund mandate after the ban, and now aggressive PMLA enforcement, have created panic among platforms still figuring out compliance pathways.
- Many startups fear retrospective interpretations of the law, especially around overseas operations and algorithmic design choices.
At the same time, regulators argue that strict enforcement is essential to protect consumers from opaque, high‑risk betting products that can be structurally tilted against players.
What to Watch Next
- Court hearings on ED custody and potential chargesheets under PMLA and related statutes.
- Whether additional promoters, senior executives, or associated entities are named.
- Clarity from the government on the exact scope and implementation of the August 22 RMG ban and expectations on refunds, overseas business, and game design transparency.
- Broader ripple effects on funding, valuations, and operations of India’s real‑money and fantasy gaming ecosystem.
The WinZO case may become a defining precedent for how India polices the intersection of online gaming, consumer protection, and financial crime in the coming years.
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