MediaNama’s Take: The allegations levied against Gameskraft and WinZO that these platforms rigged the algorithm of their apps will further erode users’ trust in Indian online gaming companies. Furthermore, the findings of the Enforcement Directorate (ED) revealed that promoters of both companies own crypto wallets, raising suspicions of money laundering through cryptocurrencies. This should worry both the users and government authorities, in particular the Reserve Bank of India (RBI).
The terms “open”, “semi-closed” and “closed” do not formally apply to crypto wallets in the Indian legal context in the same way they do to rupee wallets. Cryptocurrencies are classified as Virtual Digital Assets (VDAs) under the Income Tax Act, 1961, and are not recognised as legal tender or currency by the government or RBI. This has, alarmingly, created a regulatory grey zone. The central bank must clarify why it resists legislation to regulate cryptocurrencies.
In addition, we have seen how difficult it is to recover funds lost to crypto-related fraud. Think of the infamous WazirX hack that resulted in a loss of over $230 million in crypto assets. The absence of crypto regulation has left millions of such victims in the lurch.
Further, the ED raids add to the growing list of troubles for Gameskraft and WinZo, which are still reeling from the news of India’s real-money gaming (RMG) ban. Both platforms have halted their RMG operations, with Gameskraft also embroiled in a fraud scandal related to its former CFO Ramesh Prabhu.
What’s the News?
The Bengaluru zonal office of the Enforcement Directorate (ED) on Tuesday conducted raids at the offices of online gaming companies Gameskraft and WinZO in Delhi NCR and Bengaluru, ANI reported.
The search was carried out at a total of 11 premises, out of which five are located in Bengaluru, four in Delhi and two in Gurugram. Citing officials, the report suggested that corporate offices of these companies as well as residences of their top executives were raided.
According to multiple FIRs lodged by victims, these gaming companies allegedly rigged the app’s algorithm, putting players at a disadvantage. During the raids, ED sleuths also uncovered that promoters of Gameskraft and WinZO own crypto wallets, raising suspicion of money laundering through cryptocurrencies.
Gaming Platforms Hit Hard By India’s RMG Ban
The ED raid comes months after the Centre imposed a blanket ban on real-money games (RMG) in the country. Following the introduction of the Promotion and Regulation of Online Gaming Act, 2025, several platforms shut down their real-money operations, which include Gameskraft, WinZO, Dream 11, Mobile Premier League (MPL) and Zupee, among others.
To navigate India’s RMG ban, some gaming platforms have either entered newer markets or turned to alternate revenue streams. For instance, Dream Sports, the parent company of fantasy sports company Dream11, launched a pilot of a personal money management app called Dream Money in August, which allows people to invest in gold and fixed deposits, as well as track their spending.
A month later, Zupee pivoted to micro dramas, in purchases and subscriptions, with the launch of its short-form digital content platform, Zupee Studio. Amid the rising popularity of short dramas in the country, WinZO also forayed into the space.
Unmistakably, the RMG ban has taken a heavy toll on the bottom line of homegrown gaming startups. A case in point is Nazara Technologies, which posted a loss of nearly Rs 34 crore in the quarter ending in September 2025 (Q2 FY26), marking its first-ever quarterly loss since it went public in 2021. The loss was mainly due to a one-time impairment charge of Rs 962 crore on its investment in Moonshine Technologies, the parent company of Pokerbaazi.
Gameskraft Embroiled In Fraud Scandal
It must be highlighted that this is a fresh blow to Gameskraft Technologies, after its former Chief Financial Officer (CFO), Ramesh Prabhu, was charged with diverting company funds worth Rs 270 crore over a span of 3-4 years for personal investments.
In September, he was booked by the Bengaluru police under sections 303 (theft), 316 (criminal breach of trust), 323 (fraudulent concealment of property), 335 and 336 (forgery) and 344 (falsification of accounts) of the Bharatiya Nyaya Sanhita.
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In an attempt to recover from the RMG ban, the company has laid off scores of employees in the past few months. At the same time, top executives, including former Chief Executive Officer (CEO) Vikas Taneja and cofounder and former Chief Operating Officer (COO) Divya Agarwal, have quit the company.
Why This Matters
The ED raids at the offices of Gameskraft and WinZO expose the regulatory gaps that still plague India’s gaming ecosystem. Although the Centre has imposed a blanket ban on real-money gaming, several platforms continue to slip through enforcement cracks, enabling online gaming fraud at scale still.
Earlier in November, The Times of India reported that an online gaming firm called “Honesty is Best Policy – Atlas777.club” tricked a user into investing in cricket, football and hockey games with the promise of doubling his money and then withheld his funds worth about Rs 28 lakh.
MediaNama has highlighted several important concerns about the confusion surrounding the broad definition of online games in the Gaming Bill – do the new rules apply to loot boxes, in-game assets and opinion trading? Furthermore, the criteria for classifying online money games remain ambiguous.
In a recent conversation with MediaNama, Akshat Rathee, co-founder and Managing Director of NODWIN Gaming, said, “Grey-market practices like third-party skin sales and account trading could fall under the definition of ‘convertible stakes’ because they allow cash-out and sit outside the oversight of publishers or tournament organisers.”
The ban also adds to the existing compliance burden on banks, prohibiting them from facilitating payment transactions related to online gaming services. And how will the Centre ensure that foreign online money games comply with the bill?
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