ED Files FIR Against WinZO and Gameskraft, Freezes Over ₹520 Crore in Assets MS Dhoni Likely to be Questioned

The Enforcement Directorate (ED) has initiated a big probe against the real-money gambling firms WinZO and Gameskraft, claiming that they are guilty of financial fraud, money laundering, and unethical practices. The agency has frozen over 520 crore assets associated with these companies as a dramatic move to investigate the case.

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What Triggered the Action

Complaints related to cheating, manipulating the outcomes of the games, blocking of the accounts, and the misuse of the KYC (Know Your Customer) data initiated the investigation of the ED. Players complained that they were not getting their money and the gaming sites were using software to simulate the plays with real players – without informing the gamblers that they were not playing with real people. WinZO had ₹43 crore even after a national ban on real-money games had been enacted, and WinZO refused to refund users. Meanwhile, Gameskraft (Pocket52.com) supposedly held on to more than 30 crore in escrow without refunding them to the customer.

Scale of the Freeze

In raids conducted between November 18 and 22, the ED conducted raids at various premises associated with WinZO and Gameskraft. In such operations, the value of proceeds of crime detected by the agency is in hundreds of crores. In the case of WinZO, approximately 505crore was frozen as per the Prevention of Money laundering Act (PMLA) in terms of bank balances, bonds, fixed deposits, and mutual funds. In the case of Gameskraft, 8 escrowed accounts containing approximately ₹18.57 crore, which was to be utilized in payouts, were frozen by the agency.

Allegations Against WinZO

The ED claims that WinZO was operating real-money games in India, but used the same infrastructure to run games in other countries such as Brazil, the United States and Germany. The agency states that they limited the withdrawals made by users and that the company was making illicit money by making losses incurred by players, which was motivated by the algorithms that players had no knowledge that they were running the game. Moreover, the ED claims that huge amounts of money were stolen to foreign countries. It is estimated that up to approximately 55 million (an equivalent of about 490 crore) dollars have been deposited in a U.S. based company related to WinZO which is being received as a shell company since all business activities are reported to be run in India.

Charges Against Gameskraft

True to the fraud charge is Gameskraft which owns the online gaming site Pocket52. According to the ED, the company had a huge amount of money in escrow to be given to the customers as a result of regulation amendments and a ban on real-money gambling, yet at the time of the accusations, the company had the funds. It also discovered some evidence that proceeds of crime were on bank accounts that were connected to its promoters and other affiliate companies.

Why This Matters

This exploration is a massive one to the online gaming business in India. The real-money gaming has recently been subject to growing regulation especially when the government proposed a law barring some forms of online gambling. The move by the ED is an indication that the regulators are keen on the issue of cracking down on financial misconduct in the sector.

To those people using these sites, the freeze may imply that they may have to wait or face certain challenges when reclaiming their funds. In the case of WinZO and Gameskraft, the cost of the fallout may be enormous not only in monetary terms but also in regards to reputation and operations in the future.

Conclusion

The seizure of ₹520+ crore of assets by the ED and its freezing through the FIR is a significant intensification of the crackdown on the perceived fraud in the Indian real-money gaming industry. The case has the potential to change the operation of online gaming platforms in the country, because it involves billions and millions of users, compelling the platforms to become more transparent and accountable.