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ED Freezes ₹526 Crore in Gameskraft Money Laundering Probe; Three Cofounders Arrested

Enforcement Directorate searches across Bengaluru and Delhi-NCR yield mass asset freezes in an alleged ₹1,154 crore fraud, sharpening scrutiny of India's real-money gaming sector under the new PROG Act regime.

Category: iGaming News - India · By Growl Games Editorial Team · Fri May 15 2026 · Updated Thu Jul 23 2026

ED Freezes ₹526 Crore in Gameskraft Money Laundering Probe; Three Cofounders Arrested

Table of Contents

1. Summary

India's Enforcement Directorate (ED) on 14 May announced the freezing of ₹526.49 crore in movable assets and the seizure of gold and diamond jewellery worth ₹3.5 crore along with ₹11 lakh in cash tied to a money-laundering probe against Bengaluru-based real-money gaming company Gameskraft Technologies. Three cofounders have been arrested, and the agency alleges the platform's gaming structure was manipulated to bleed users of funds later laundered through investments and dividends.

2. The Raid: Numbers and Locations

According to the ED, search operations ran from 7 May to 13 May 2026 across Bengaluru and the Delhi-NCR region, covering the company's offices as well as residences of directors and key employees. The frozen assets include bank balances, payment gateway balances, mutual funds, bonds and fixed deposits totalling ₹526.49 crore, along with roughly 2.3 kg of gold and diamond jewellery. The agency frames the case as an alleged ₹1,154 crore fraud against players. Earlier coverage from Inc42 noted the broader investigation involves around ₹1,000 crore in suspicious transactions traced across 17 locations across Delhi-NCR and Karnataka.

3. Allegations: Bot Manipulation and User Harm

The ED alleges that Gameskraft's apps — including RummyCulture and RummyTime — ran a manipulative gaming structure that systematically disadvantaged users, particularly those from lower-income groups. Investigators say grievance data pulled from the company's own complaint system pointed to severe financial distress among players, with some reports indicating extreme mental distress and suicidal tendenciesThe agency further claims proceeds were laundered through foreign-entity investments, shareholder dividends, mutual funds, bonds, and movable and immovable property purchases.

Inc42 has reported that the probe centres on allegations of bot-based manipulation, echoing earlier ED actions in November 2025 when investigators searched offices linked to Gameskraft and rival WinZO over claims that platforms tweaked matchmaking algorithms to disadvantage players.

4. Arrests and Court Pushback

Three cofounders — Deepak Singh (Ahlawat), Prithvi Raj Singh, and Vikas Taneja — were arrested under Section 19 of the Prevention of Money Laundering Act, 2002. Deepak Singh and Prithvi Raj Singh were detained in Delhi-NCR and brought to Bengaluru on transit remand; Vikas Taneja was arrested in Bengaluru and produced before the local court.

The cofounders have challenged their arrests via writ petitions before the Karnataka High Court. A vacation bench of Justice MG Shukure Kamal has issued notices to the ED and posted the matter for the next hearing on 14 May. This is not the first judicial setback for the agency in this case — the High Court had earlier stayed an ED probe against Gameskraft after the company argued the underlying FIR had already been closed for lack of evidence.

5. Wider Context: PROG Act in Force

The Gameskraft enforcement action lands two weeks into the operational life of India's new gaming regime. The Promotion and Regulation of Online Gaming (PROG) Act 2025, along with the accompanying Promotion and Regulation of Online Gaming Rules 2026, came into force on 1 May 2026, banning real-money online gaming outright while establishing the Online Gaming Authority of India (OGAI) as the central regulator. Real-money gaming was first prohibited in August 2025; the new framework formalises classification of games into online money games (banned), e-sports, and online social games.

Penalties under the new regime include prison terms of up to three years and fines reaching ₹1 crore. Cyber cell officials at state, district and police-station levels are now authorised to investigate offences, with enforcement expected to be largely digital and resolved within 90 days. Gameskraft had already cut more than 400 jobs as part of restructuring tied to the regulatory shift.

6. What's Next

Industry observers see the Gameskraft action as the most significant post-ban enforcement signal so far. With the OGAI now operational, the writ petitions before the Karnataka High Court will test the limits of ED powers under PMLA when overlaid with the new gaming framework. Other real-money operators previously raided — including WinZO, Probo and Dream11 — remain under various stages of scrutiny. For licensed operators outside India's jurisdiction, the message is plain: enforcement against domestic real-money gaming is now active, coordinated, and willing to move quickly on assets.

Sources


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