Paavan Nanda and Saumya Singh Rathore taken into custody as ED freezes INR 505 Cr in alleged proceeds; gaming industry reels under regulatory heat.
ED Arrests WinZO Cofounders in PMLA Case
The Enforcement Directorate (ED) has arrested WinZO cofounders Saumya Singh Rathore and Paavan Nanda under provisions of the Prevention of Money Laundering Act (PMLA).
- The arrests followed interrogation at ED’s Bengaluru zonal office, according to sources cited by ET.
- This development comes after a series of searches across WinZO and GamesKraft offices in Bengaluru, Delhi, and Gurugram earlier this week.
INR 505 Cr Frozen, INR 43 Cr Unrefunded Post Ban
The ED claims to have frozen WinZO’s alleged proceeds of crime worth INR 505 Cr, which include bank balances, mutual funds, and bonds.
- Investigations revealed that WinZO continued to operate real money gaming (RMG) platforms in international markets like the USA, Brazil, and Germany via its Indian infrastructure.
- Despite the nationwide ban on RMGs from August 22, 2025, the company allegedly withheld INR 43 Cr from customers without issuing refunds.
Allegations of Algorithm Manipulation & User Deception
According to the ED, WinZO:
- Deceived users by letting them play RMGs against algorithms/software without disclosing the absence of real opponents.
- Restricted withdrawals of wallet balances, allegedly converting them into illicit gains for the platform.
- Generated proceeds of crime through manipulated bets and losses, which were then diverted to overseas accounts.
“WinZO has engaged in unscrupulous practices, blocking customer funds and using algorithms deceptively,” said the ED in a statement.
Funds Diverted to Shell Entities Abroad
The ED also discovered that $55 Mn (about INR 490 Cr) was transferred to a US bank account under the name of WinZO’s US entity.
- The agency alleges this entity was effectively a shell company, with all operations controlled from India, violating foreign exchange and anti-money laundering laws.
- Funds were also routed to Singapore, under the guise of overseas investments, further deepening the financial trail.
FIRs and Sector-Wide Fallout
The ED’s investigation stems from FIRs filed against WinZO, which include complaints of:
- Cheating
- Account blocking
- PAN card misuse
- Impersonation
The crackdown coincides with India’s nationwide ban on RMGs, introduced in August 2025, which triggered:
- Mass layoffs
- Shutdowns and pivots among gaming startups
- Heightened scrutiny of cross-border transactions and compliance
Just yesterday, Junglee Games, owned by Flutter Entertainment, laid off 350 employees across its Delhi and Bengaluru offices.
