The Enforcement Directorate (ED) has arrested WinZO Games Pvt Ltd cofounders Saumya Singh Rathore and Paavan (also reported as Paavan/Paavan) Nanda under provisions of the Prevention of Money Laundering Act (PMLA), 2002, in connection with an alleged real-money gaming and fraud racket. The two were taken into custody days after a series of coordinated search operations in Delhi, Gurugram and Bengaluru and were produced before a special court, which granted ED custody for further interrogation on the agency’s remand application.
ED officials have described the case as part of a wider crackdown on alleged illegal real-money gaming (RMG) platforms and purported laundering of proceeds of crime through domestic and overseas structures. The arrest followed earlier ED press statements naming WinZO Games as a key entity in the probe and alleging that proceeds from its gaming operations qualified as “proceeds of crime” under PMLA.
Rs 505 crore assets frozen
As part of the ongoing investigation, the ED has frozen assets valued at around Rs 505 crore that it identifies as proceeds of crime in the hands of WinZO Games Pvt Ltd. These assets reportedly comprise bank balances, fixed deposits, bonds and mutual fund units attached under Section 17(1A) of PMLA following searches conducted across four locations linked to WinZO in Delhi and Gurugram between 18 and 22 November.
The freezing of assets forms part of a broader action in which the agency has blocked more than Rs 520 crore in assets connected to WinZO and another real-money gaming firm, Gameskraft Technologies, as part of the same sectoral sweep. ED officials have alleged that approximately 55 million US dollars, estimated at nearly Rs 490 crore, was parked in a US bank account in the name of WinZO US Inc., which the agency characterises as a shell company because it supposedly lacks substantial standalone operations abroad while being effectively controlled from India.
Origins of the case and predicate FIRs
The money laundering case stems from multiple First Information Reports (FIRs) lodged against WinZO and associated parties for offences including cheating, blocking of user accounts, impersonation and misuse of Permanent Account Number (PAN) and Know Your Customer (KYC) data. Complainants alleged that their identity details were misused on the platform, that accounts were frozen without adequate explanation, and that they suffered substantial financial losses due to what they described as fraudulent practices.
On the basis of these predicate offences, ED’s Bengaluru Zonal Office initiated a PMLA investigation to trace what it describes as laundered proceeds derived from online gaming activities. The agency has asserted that funds collected through allegedly manipulated real-money games and withheld wallet balances constitute “proceeds of crime” which have been layered and parked in various financial instruments and foreign accounts.
Allegations on real-money gaming model
According to ED statements, WinZO runs an online platform providing real-money gaming services, advertised as skill-based games where users can stake and win money. Investigators allege that, contrary to these representations, customers were in several instances matched not against human opponents but against software-controlled algorithms or bots, a material fact which was allegedly not disclosed to players.
The agency further claims that a proprietary algorithm, referred to in some reports as “PPP”, was used to generate automated gameplay patterns that allowed the platform to secure illicit gains at the expense of users who repeatedly lost money in these games. ED sources have also alleged that WinZO continued to offer real-money games in foreign jurisdictions such as the United States, Brazil and Germany using the same technology stack operated from India, despite evolving regulatory restrictions on RMG in India.
Ban, withheld funds and wallet restrictions
A key plank of the ED’s case relates to the treatment of user funds following a central government decision to ban certain categories of online real-money games with wagering elements on 22 August 2025. The agency has alleged that instead of returning player balances after the ban, WinZO restricted withdrawals and continued to hold around Rs 43 crore in customer wallet balances that were neither refunded nor fully accessible.
Investigators say their analysis of transaction records and complaints indicates that customers who attempted to withdraw their funds faced repeated denials, delays or unilateral account blocking, often without transparent grievance redressal. ED has argued before the court that these practices, combined with the alleged algorithmic manipulation of games, transformed ordinary platform revenues into tainted funds liable to be treated as proceeds of crime.
Cross-border structures and alleged layering
Beyond domestic wallet balances, ED’s probe has focused on international fund flows linked to the WinZO group. Officials claim that about 55 million dollars was maintained in a US bank account in the name of WinZO US Inc., even though, according to the agency, day-to-day operations, decision-making and banking controls remained with personnel located in India.
The agency has suggested that additional funds were routed to Singapore and other jurisdictions under the stated purpose of overseas investment and expansion of gaming operations. Investigators are examining whether these structures were used to layer proceeds from Indian players and foreign users of the real-money gaming platform, thereby distancing the funds from their alleged criminal origin.
WinZO’s response and denial of wrongdoing
WinZO has publicly denied any wrongdoing and maintained that it remains fully compliant with Indian laws and regulations governing online gaming and financial operations. In earlier statements issued after the search operations and asset freeze, the company said it has been cooperating fully with the ED and pledged to continue supporting the investigative process.
The platform has consistently positioned itself as a skill-based gaming company that operates with integrity and fairness, and has argued that ongoing regulatory deliberations, including proposed rules under the central government’s online gaming framework, provide customers with rights to seek refunds and manage balances. As of the latest reports, representatives for the company and its founders are expected to contest the ED’s characterisation of the funds as proceeds of crime and to seek relief through the courts.
Legal proceedings and sector implications
Following the arrests, the ED is expected to press for extended custodial interrogation to trace fund flows, identify alleged accomplices and firm up its prosecution complaint under PMLA, while the defence is likely to challenge both the arrests and the attachment of assets. The court will also examine the ED’s remand application and the evidentiary basis for continued custody, including the link between the FIR-based predicate offences and the alleged laundering activities.