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ED Arrests Three Gameskraft Founders in ₹1,000 Crore Money Laundering Probe

Karnataka High Court questions Enforcement Directorate on "fresh material" as custody is extended to May 19; case becomes the first founder-level test of India's post-PROGA enforcement regime.

Category: iGaming News - India · By Growl Games Editorial Team · Tue May 19 2026 · Updated Thu Jul 23 2026

ED Arrests Three Gameskraft Founders in ₹1,000 Crore Money Laundering Probe

Table of Contents

1. Summary

The Enforcement Directorate (ED) on May 7, 2026 arrested three co-founders of Bengaluru-based gaming firm Gameskraft Technologies — Deepak Singh Ahlawat, Prithvi Raj Singh and Vikas Taneja — under the Prevention of Money Laundering Act (PMLA). The agency alleges a betting-linked fraud of approximately ₹1,000 crore tied to platforms including RummyCulture, RummyTime and Pocket52. A Bengaluru special court has extended ED custody until May 19, the same date on which the Karnataka High Court is set to rule on petitions challenging the legality of the arrests.

2. The Arrests and the ₹1,000 Crore Allegation

According to ED filings, Deepak Singh and Prithvi Raj Singh were detained in Delhi-NCR and produced on transit remand before a Bengaluru court, while Vikas Taneja was arrested in Bengaluru. The agency conducted coordinated searches at 17 locations across Delhi-NCR and Karnataka, seizing documents, electronic records and financial data. Investigators allege roughly ₹250 crore was diverted under the pretext of investments in futures, options and mutual funds, within a wider fraud estimate of ₹1,000 crore. The FIRs underlying the case include complaints from users alleging manipulated outcomes, withdrawal blocks and, in some instances, suicides linked to losses on the platforms.

3. Karnataka High Court Challenge

The three founders have moved the Karnataka High Court challenging their arrests under Article 226, arguing the action violates the safeguards in Section 19 of the PMLA. Senior advocate S. Muralidhar, appearing for Deepak Singh, told Justice M.G.S. Kamal on May 14 that the present Enforcement Case Information Report (ECIR) is built on three FIRs registered in Telangana on January 24, 2026 — just two days after the High Court stayed an earlier ECIR against the company. Senior advocate Sajan Poovayya represents the other two founders. The court orally observed that an arrest under PMLA must rest on "tangible substantive material" and granted the ED until May 19 to file its objections, warning it would otherwise pass orders on the petitions.

4. Why This Case Matters for Indian iGaming

The arrests are the most aggressive enforcement action since the Promotion and Regulation of Online Gaming (PROG) Act, 2025 came into force on May 1, 2026 alongside the Online Gaming Rules, 2026 and the new Online Gaming Authority of India (OGAI). The Act bans all online money games regardless of skill versus chance, and Gameskraft's rummy and poker products were shut down in August 2025 following the law's enactment. The Gameskraft action follows the November 2025 PMLA arrests of WinZO co-founders and the freezing of roughly ₹523 crore across WinZO and Gameskraft, signalling that founder-level criminal liability — not just platform shutdowns — is now firmly on the table for Indian operators.

5. What Happens Next

Three proceedings converge on May 19, 2026. The ED must file its statement of objections in the High Court; the special PMLA court will rule on the next remand application; and pending bail applications remain in abeyance until custody status is decided. A separate Supreme Court challenge to the PROG Act itself and a ₹2.5 lakh crore retrospective GST dispute affecting the broader sector — Gameskraft included — remain unresolved. For offshore-licensed sportsbooks and casinos serving Indian users, the case underlines that domestic enforcement is now targeting individual directors of money-gaming entities, not only their corporate vehicles.

6. Sources

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