New Delhi: An Enforcement Directorate (ED) probe into WinZO found that the real-money gaming app put up bots to go up against genuine players, restricted withdrawals from its digital wallet, and tried to skirt an India ban by shifting its operations to the US.
WinZO, ED said in submission to a Bengaluru court, had signed an agreement with its US-based subsidiary to transfer intellectual property, including its software and database of around 25 crore users.
Calling it “theft of user identity”, the agency said WinZO Games wanted to shift its business out of India because real-money games were declared illegal under the Regulation of Online Gaming Act, 2025, which came into effect this October.
The app offered games like Ludo, and Snakes & Ladders, on which users stake their money.
ED earlier this week arrested WinZO’s directors Saumya Singh Rathore and Paavan Nanda on charges under the Prevention of Money Laundering Act (PMLA). The arrests came days after raids at multiple premises linked to the company.
Apart from shifting its software and technology, WinZO’s management periodically routed funds from India to bank accounts of its US subsidiary, WinZO US Inc, ED said.
The subsidiary accounts, the probe agency alleged, had a cumulative balance of Rs 490 crore as of 22 November. This was despite the entire business running through a single application in India, it added.
The company, in a statement released after the raids, had denied any wrongdoing. “Fairness and transparency are core to how WinZO designs and operates its platform,” a spokesperson had said. The company’s management did not respond to ThePrint’s requests for comment on the arrests till Friday evening.
Counsels for Rathore and Nanda raised objections to the necessity of arrests, saying that the two had cooperated during search operations by ED and appeared before the agency when summoned.
The special PMLA court in Bengaluru on Wednesday sent Rathore and Nanda to remand for ten days, saying that ED had made “a clear cut case” and offered “cogent reasons” to take custody of the accused. The judge noted that the investigation agency had provided information and details indicating money laundering and related activities, for which custody was required.
Also Read: ‘Fruit of a poisoned tree’: Why Delhi HC ruled profits from illegal betting are ‘proceeds of crime’
‘Playing against an algorithm’
The case that formed the basis of ED’s money laundering probe was registered in Haryana’s Gurugram on 24 November.
The complainant, in an FIR registered at Gurugram’s Cyber Crime Police station, said he lost Rs 42 lakh to fraud by the app. He alleged that principal promoters and directors, including Nanda and Rathore, had deployed software-generated bots, which pretended to be real users in games.
“These bots are falsely presented as regular opponents. In this scenario, the goal appears to be to engineer repeated financial losses through unfair match-ups and concealed algorithmic logic,” the complainant alleged.
“Over time, I suffered approximately Rs 42,00,000 in financial losses while engaging with Ludo, and Snakes & Ladders games on WinZO. These losses were incurred while I believed I was participating in a fair and open platform—a belief I now know to be false due to the presence of these concealed match-making practices,” he said.
ED, in its remand application submitted to a local court Wednesday, said the app was indeed deploying an algorithm called ‘Past Performance of Player’ (PPP), through which the software uses historical profile of an existing user and generates automated gameplay. These automated players are then pitted against genuine users without informing them that their opponents are customised, learned tools rather than individuals.
This system, the agency alleged, always benefited the app at the expense of genuine users, who were unaware that their opponent was, in fact, an algorithm.
Additionally, the agency said, users whose profiles were used to generate PPP-based gameplay were neither informed of the use of their data nor asked for their consent.
“At no point during PPP-driven matches does the company disclose or indicate to the live participants that they are competing against an algorithm,” the agency submitted in its remand plea, seeking custody of Nanda and Rathore.
Through this mechanism, ED said, WinZO made illicit gains of Rs 177 crore.
Unexplained restrictions
In addition, ED said, there were unexplained restrictions on users’ fund withdrawals.
The agency said that users were permitted to add money to their digital wallets without any limit, but they were not allowed to withdraw these funds at will. Instead, the platform devised a mechanism that restricted users to withdrawing only the “winning amount”, it said.
There was also a daily withdrawal limit on users, which was decided by their “loyalty level”. Even at the highest loyalty level, ED noted, the maximum permissible withdrawal was below Rs 1 lakh a day.
These limitations substantially curtailed a user’s access to recover their own deposited money. As a result, users were compelled to continue playing more games to convert their deposited funds into “withdrawable” winnings.
“This structure coerces prolonged gameplay, thereby increasing the likelihood of financial loss, particularly in view of the company’s systematic and undisclosed use of PPP algorithm in RMGs (real-money games), which manipulates game outcomes to the detriment of genuine players,” the agency said in its submission to the court.
Similarly, ED accused application promoters of arbitrarily blocking users’ digital wallets, preventing them from accessing their own funds.
Although the promoters had discretion to block or unblock these wallets, the agency found in its investigation, the decisions were taken without any valid or documented grounds.
“This misuse of discretionary power is further corroborated by the substantial balance observed in the company’s Escrow Account, amounting to approximately Rs 43 crore, which remains classified as “payable to users” as on date. The existence of such a significant pending payable amount evidences that user wallets were blocked indiscriminately & arbitrarily, preventing legitimate users from accessing or withdrawing their own funds,” the agency said in its remand plea.
(Edited by Prerna Madan)
Also Read: Betting app probe: ‘Email trail on BCCI contracts’ at centre of ED’s charges against Dhawan & Raina