Breaking: Gameskraft moves Karnataka HC to quash ED money laundering case

Online gaming firm Gameskraft Technologies Pvt. Ltd. has approached the Karnataka High Court challenging the Enforcement Directorate’s (ED) action against the company, filing a writ petition seeking to quash the money laundering case initiated by the central agency.

The petition, filed jointly by Gameskraft and Nirdesa Networks Pvt. Ltd.—the parent company of online poker platform Pocket52—seeks to set aside the Enforcement Case Information Report (ECIR) bearing number ECIR/BGZO/29/2025 dated November 11, 2025, along with all consequential proceedings arising from it. The matter has been registered as WP No. 1810/2026 before the Karnataka High Court.

In its plea, titled M/s Gameskraft Technologies Pvt. Ltd. and Another vs Directorate of Enforcement, the company has also sought interim relief, requesting the court to stay the operation of the ECIR and all follow-up actions by the ED in the interest of justice.

The ED’s investigation stems from searches conducted by its Bengaluru zonal office at the corporate offices of Gameskraft and Nirdesa Networks, as well as the residences of senior executives, including CEOs, COOs and CFOs. According to the agency, the searches are linked to allegations of cheating and money laundering, including suspected use of cryptocurrency.

ED officials have claimed that evidence was found indicating that promoters of the companies owned cryptocurrency wallets, which the agency alleges could point to potential laundering of proceeds of crime. The agency is probing whether digital assets were used to conceal or route funds generated from alleged illegal activities on gaming platforms.

The searches are also connected to Pocket52, an online poker platform operated by Nirdesa Networks and owned by Gameskraft. Pocket52 ceased operations by July 2025, citing mounting regulatory pressure and the impact of the 28% goods and services tax (GST) levied on real-money gaming.

Separately, Gameskraft has been grappling with internal issues following allegations against its former chief financial officer, Ramesh Prabhu, who the company has accused of siphoning off ₹270.43 crore over nearly five years. An FIR was lodged after the company filed a formal complaint, and investigations into the alleged financial misappropriation are ongoing.

The ED has also pointed to multiple FIRs filed by individuals accusing gaming platforms of manipulating algorithms and outcomes, raising concerns around the fairness and transparency of online gaming operations. These complaints have added to regulatory scrutiny of how outcomes are determined on real-money gaming platforms.

In a related development, the ED conducted searches in Bengaluru and Gurugram targeting Gameskraft Technologies, Nirdesa Networks and the residences of their directors following a Karnataka Police FIR. The police complaint alleged rigged gameplay, manipulated outcomes, player collusion, delays in withdrawals, technical malfunctions, and the removal of transparency features such as hand-history tools on Pocket52.

According to the complainant, losses exceeding ₹3 crore were incurred due to alleged systematic cheating and violations of responsible gaming norms. During the searches, ED officials seized mobile phones, laptops and cloned digital data from Gameskraft’s premises to examine suspected user exploitation and manipulation of gaming systems.

The agency has further alleged that despite restrictions under the Prevention of Gambling Act (PROGA), Pocket52 and associated entities continued to hold over ₹30 crore in escrow accounts without refunding users. The ED said it has frozen eight escrow accounts containing approximately ₹18.57 crore as part of its probe.

The enforcement agency has said that further investigation across all linked cases is underway. The Karnataka High Court is expected to take up Gameskraft’s writ petition in the coming weeks.