Enforcement Directorate cracks down on gaming firms after user complaints of rigged gameplay and crypto-linked laundering, escalating the pressure on India’s embattled online gaming industry.
ED Conducts Multi-City Raids on Gameskraft and WinZO
The Enforcement Directorate (ED) carried out raids across 11 locations tied to Gameskraft and WinZO, including offices and executive residences in Bengaluru, Delhi, and Gurugram, following user-filed FIRs.
- The complaints accuse the platforms of algorithm rigging to disadvantage players in real-money games.
- Investigators also discovered crypto wallets allegedly linked to company promoters, suggesting possible money laundering via cryptocurrencies.
Neither Gameskraft nor WinZO have issued public statements yet. Inc42 has reached out for comment.
Allegations: Algorithm Manipulation and Crypto Laundering
The FIRs allege that both platforms manipulated gameplay algorithms, creating an unfair playing field for users wagering real money.
- Users claim outcomes were biased against players, potentially violating fair-play norms.
- The discovery of cryptocurrency wallets raises further concerns around unregulated fund flows and potential laundering.
If proven, these actions could violate multiple laws, including those under the Prevention of Money Laundering Act (PMLA).
Regulatory Crackdown on Real-Money Gaming Intensifies
The ED raids come amid a regulatory crackdown that has reshaped India’s online gaming landscape:
- August 2025: India enacted the Promotion and Regulation of Online Gaming Act, banning all real-money online games.
- This followed a progression that included:
– State-level bans
– The imposition of 28% GST on online gaming in 2023
– Supreme Court backing of a nationwide prohibition
The new law bans platforms where users deposit funds for the chance to win money, regardless of the game’s format or skill element.
Fallout: Layoffs, Shutdowns, and Strategic Pivots
The sector has since collapsed under regulatory pressure, with layoffs and shutdowns becoming widespread:
- Gameskraft:
– Operated platforms like Rummyculture, Pocket 52, and Ludo Culture
– Laid off over 400 employees post-ban, following an earlier round of 120 cuts in September - WinZO:
– Hosts 100+ games; operates in India, US, and Brazil
– Post-ban, shifted focus to international markets
– Launched ZO TV, a short-video platform, in an attempt to diversify its digital offerings
Other major players have taken similar measures:
- Games24x7 cut ~500 jobs
- MPL let go of 60% of its workforce
- Many firms are now pivoting to casual games or relocating abroad
What’s Next for India’s Online Gaming Sector?
The ED’s action signals that regulatory scrutiny isn’t over, even for companies that have downsized or shifted focus.
- Legal action could result in further financial penalties or criminal liability, particularly if crypto-linked violations are confirmed.
- These developments also underscore the risks of opaque algorithms and unregulated financial flows in consumer-facing platforms.
With public trust eroding and legal pressure mounting, India’s once-booming real-money gaming sector appears to be at a breaking point, and these raids may set the tone for further enforcement action.
