ED raids on WinZO, Gameskraft and Dream11 rattle gaming sector, industry fears wider crackdown in 2026

The Enforcement Directorate’s recent raids on WinZO, Probo, Gameskraft and Dream11 have sent fresh tremors through India’s real-money gaming ecosystem, sharpening industry fears that a broader wave of scrutiny and coercive action could follow in 2026.

With the Promotion and Regulation of Online Gaming Act (PROGA) still not notified and its draft rules under consultation, companies say they are caught in a regulatory limbo—uncertain of compliance expectations even as enforcement intensifies.

Over the past few months, the ED has launched multiple searches and asset-freezing actions against leading gaming firms, citing allegations ranging from cheating and algorithmic manipulation to money laundering and cross-border fund diversion. Industry executives and policy experts warn that unless regulatory clarity emerges soon, many platforms could face heightened enforcement risk next year.

Regulatory fog and industry anxiety

While enforcement agencies maintain that the actions reflect a sharpened focus on illegal online gaming amid rising complaints of cheating, KYC fraud and fund diversion, industry stakeholders argue that the timing has created confusion—particularly around the treatment of unwithdrawn user funds

A senior executive at a real-money gaming firm, requesting anonymity, said the ED’s move has unsettled companies at a time when the draft PROG Rules, released by the Ministry of Electronics and IT (MeitY) on October 2, are still under consultation. “Under the draft rules, companies are expected to repay users’ pending balances within a 180-day window once the Act is enforced. Rule 24 even clarifies that such remittances won’t be treated as facilitating money-gaming transactions. But PROGA hasn’t been notified yet,” the executive said.

Legal analysts echo the concern. “The draft framework explicitly allows a grace period once the Act is in force. If the Act itself hasn’t kicked in, it raises serious questions about whether non-refund of balances right now can be treated as wrongdoing,” said a policy expert advising gaming firms on the legislation.

One of the biggest pain points, stakeholders say, is the lack of clarity around dormant user balances. Platforms have long sought guidance on whether they can unilaterally push unclaimed wallet balances to a user’s last verified bank account after repeated reminders.

An executive from a top gaming federation said the ambiguity is now being used to justify enforcement action. “We have KYC-verified bank details. If we proactively push funds back, will it be treated as a legitimate refund or as illegal facilitation of banned gaming? The rules are unclear, and no company wants to trigger further scrutiny,” the executive said.

Another industry representative was more blunt: “Firms are paralysed. They’re scared of issuing refunds and equally scared of holding balances. The ED’s actions have created a compliance vacuum.”

2026: More heat ahead?

With PROGA 2025 yet to come into force, the industry is urging MeitY and the finance ministry to issue urgent clarifications to prevent further disruption. Executives warn that if the regulatory architecture is not finalised soon, enforcement pressure could intensify next year, exposing more gaming firms and even industry bodies to raids and asset freezes.

“Until the Act and rules are notified—along with clear instructions on user wallets, refunds, dormant accounts and escrow liabilities—the ecosystem will remain in uncertainty,” said one senior industry stakeholder. “If this continues into 2026, many more companies could find themselves in the ED’s crosshairs.”

For now, India’s gaming sector is bracing for a prolonged period of scrutiny, caught between an evolving regulatory regime and an increasingly assertive enforcement landscape.

WinZO raids and founder arrest

In its most detailed action yet, the ED’s Bengaluru Zonal Office conducted coordinated searches at four locations in Delhi and Gurgaon as part of a probe into alleged laundering of proceeds generated through the WinZO gaming platform. The agency said it froze various assets—including bank balances, fixed deposits, bonds and mutual funds—under Section 17(1A) of the Prevention of Money Laundering Act (PMLA).

According to the ED, WinZO misled customers by representing that its real-money games were free from bots or automated rival systems. Investigators have alleged algorithmic auto-matching of players without user consent, arbitrary blocking of user wallets, and the creation of an ecosystem that restricted withdrawals by allowing only winnings—subject to daily caps—to be cashed out. This led to further arrest of founders Saumya Singh Rathore and Paavan Nanda.

The agency further claimed that the company continued to hold around ₹43 crore of gamer funds even after the Union government’s ban on real-money gaming came into effect on August 22, 2025. The case originates from multiple FIRs accusing the platform of cheating users, blocking player accounts, misusing PAN details, manipulating KYC data and causing financial losses through allegedly deceitful practices.

The ED has also alleged that WinZO operated real-money gaming services for international markets such as Brazil, the US and Germany using the same infrastructure as its Indian entity. Investigators say they uncovered suspected cross-border fund diversion, with around $55 million (₹489.9 crore) found in accounts of WinZO US Inc., described as having no standalone operational presence abroad. Day-to-day functions and account activities were allegedly controlled from India, raising concerns over layering of funds under the guise of overseas investment.

WinZO, however, has denied wrongdoing. “We have been cooperating fully with the investigating agency and will continue to support the process. Fairness and transparency are core to how WinZO designs and operates its platform. Our focus remains on protecting our users and ensuring a secure, trustworthy experience. WinZO remains fully compliant with all applicable laws,” the company said in a statement.

Gameskraft and Pocket52 raids

In parallel, the ED carried out searches in Bengaluru and Gurugram targeting Nirdesa Networks Pvt. Ltd., the operator of poker platform Pocket52, Gameskraft Technologies Pvt. Ltd., and residences of their directors. The action followed a Karnataka Police FIR alleging rigged gameplay, manipulated outcomes, player collusion, withdrawal delays, technical malfunctions and the removal of transparency tools such as hand-history features on Pocket52.

The complainant claimed losses exceeding ₹3 crore, alleging systematic cheating and breaches of responsible gaming norms. During the searches, ED officials seized mobile devices, laptops and cloned digital records from Gameskraft’s premises to investigate suspected manipulation and user exploitation.

Despite the real-money gaming ban under PROGA, authorities allege that Pocket52 and related entities continued holding more than ₹30 crore in escrow accounts without refunding users. The ED said it has frozen eight escrow accounts containing approximately ₹18.57 crore. Further investigation across all cases is underway, the agency added.

Dream11 linked to Jai Corp probe

Separately, the ED has also searched more than 30 locations across the country, including the office of online fantasy gaming platform Dream11 and premises linked to its co-founder Bhavit Sheth. The searches form part of a money laundering investigation connected to an alleged ₹2,434-crore financial fraud involving Jai Corp Limited.

Officials said the action was conducted under PMLA and covered locations linked to industrialist Anand Jaikumar Jain, a director of Jai Corp, the company’s sister concerns and associated business entities. Over 20 premises were searched in Mumbai, with additional locations in Nashik, Bengaluru and Raipur.

Probo asset freeze

The Enforcement Directorate’s Gurugram Zonal Office has provisionally attached movable and immovable assets worth ₹117.41 crore belonging to Probo Media Technologies Pvt. Ltd. and family members of its directors, escalating its money laundering investigation into the controversial online prediction platform.

The attachment, executed on December 9, covers fixed deposits, investments in shares, demand drafts, bank balances held in the company’s name, and several residential apartments owned by relatives of the promoters, according to an official release.

Probo Media operates the app and website Probo, which investigators allege promoted online gambling under the guise of “online gaming”. The platform, popular for its “yes/no” prediction-based questions on current events and market outcomes, suspended operations in August 2025 after the Promotion and Regulation of Online Gaming Act, 2025 came into force.

The agency initiated its investigation on the basis of multiple FIRs filed in Gurugram and Palwal (Haryana) and Agra (Uttar Pradesh) under the Bharatiya Nyaya Sanhita (BNS), 2023 and the Public Gambling Act, 1867. Complainants alleged they were misled with promises of easy earnings through simple prediction questions, while the underlying mechanism allegedly constituted gambling.