Major Financial Crackdown: ED Freezes Rs 523 Crore in Gaming Fraud Probe
In a significant enforcement action, the Enforcement Directorate (ED) has frozen assets worth over Rs 523 crore belonging to two prominent online gaming platforms - Pocket52 and WinZO Games. The massive crackdown comes as part of investigations into alleged fraud, algorithmic manipulation, and violations of India's ban on real-money gaming platforms.
Search Operations Across Multiple Cities
The ED's Bengaluru Zonal Office conducted extensive search operations during November 18-22, 2025 across multiple locations including Bengaluru, Gurgaon, and Delhi. The targeted companies included Pocket52, operated by Nirdesa Networks Pvt Ltd, and WinZO Games Pvt Ltd.
This enforcement action follows the Centre's ban on real-money games implemented on August 22, 2025 through the Promotion and Regulation of Online Gaming Act. Despite this legislative measure designed to protect consumers and regulate the online gaming industry, both platforms allegedly continued holding substantial customer funds in direct violation of the ban.
Pocket52: Allegations of Game Manipulation
The investigation into Pocket52 began following a First Information Report (FIR) registered by the Karnataka Police. The complaint detailed large-scale fraud involving manipulated game outcomes, player collusion, technical glitches, and withdrawal restrictions that systematically exploited users.
According to ED officials, one complainant alone reported losing over Rs 3 crore due to what authorities have described as "systemic cheating." During search operations at Nirdesa Networks, Gameskraft Technologies Pvt Ltd, and residential premises of company directors, enforcement officials seized multiple incriminating devices including mobile phones and laptops, along with voluminous data backups.
The probe revealed numerous user complaints about manipulation and lack of transparency. The company allegedly exploited users while failing to compensate them for losses. ED officials noted that the platform had removed critical features like transaction history and ignored responsible gaming practices.
Despite the Union government's ban, Pocket52 was found holding over Rs 30 crore in escrow accounts without processing customer refunds. The ED has frozen eight bank accounts serving as escrow accounts for payouts, with a combined balance of approximately Rs 18.57 crore under Section 17(1A) of the Prevention of Money Laundering Act (PMLA), 2002.
WinZO Games: Massive Financial Freeze and International Operations
In a parallel operation, the ED froze proceeds of crime worth approximately Rs 505 crore possessed by WinZO Games. The frozen assets include bank balances, bonds, fixed deposit receipts, and mutual funds.
The investigation against WinZO was launched based on multiple FIRs filed on grounds of cheating, account blocking, impersonation, and misuse of Permanent Account Number (PAN) cards. Complainants alleged that their KYC (Know Your Customer) details were misused, leading to substantial financial losses due to fraudulent activities.
ED investigations uncovered that WinZO operated real-money games in foreign countries including Brazil, USA, and Germany from India using the same platform as the Indian entity. Even after the August 22 ban, the company continued holding Rs 43 crore belonging to gamers without processing refunds.
Perhaps most alarmingly, the ED discovered that WinZO engaged in unscrupulous practices by making customers play against algorithms and software without proper disclosure. Players believed they were competing against real humans in real-money games, when in reality they were playing against rigged systems designed to ensure losses.
The company also allegedly prevented or limited withdrawals of money held in customer wallets, while generating proceeds of crime through bet amounts placed and lost by real customers through manipulated algorithms and software.
Broader Implications for Gaming Industry
This massive enforcement action represents one of the largest financial freezes in India's gaming industry history and signals the government's serious intent to regulate the rapidly expanding online gaming sector. The crackdown demonstrates the authorities' commitment to protecting consumers from exploitation and ensuring compliance with the new regulatory framework.
The investigations continue as authorities examine the complete scope of operations and potential violations by both gaming platforms. Industry experts suggest this could lead to more stringent regulations and increased scrutiny of gaming platforms operating in India.
