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This action by the ED follows a detailed probe into allegations of fraudulent practices on Winzo's platform, impacting millions of users, particularly those in smaller Indian cities. The core of the ED's complaint centers on systemic manipulation designed to generate illicit profits and obscure financial activities.
Algorithmic Deception and User Losses
The Enforcement Directorate alleges that Winzo's real-money gaming platform engaged in sophisticated player deception until December 2023, embedding bots and AI tools within games. Forensic analysis reportedly revealed that the company simulated historical gameplay data of inactive users, deploying these "Personas" or "Engagement Play" profiles against real players without their knowledge. This tactic, according to the ED, was used to initially build user trust with small bonuses and easier bots, but escalated to deploying more difficult bots as stakes increased, leading to sustained user losses. The agency estimates genuine users lost approximately Rs 734 crore due to these manipulated plays. Further allegations suggest that even after winning at higher stakes, withdrawals were restricted, forcing continued gameplay and deposits. Winzo also reportedly failed to return legitimate user winnings and deposits totaling Rs 47.66 crore even after the government banned real-money gaming apps in August 2025.
Financial Crimes and Asset Freezes
Investigators claim Winzo generated proceeds of crime amounting to Rs 3,522.05 crore between FY22 and August 22, 2025. These alleged proceeds were then laundered through shell companies incorporated in the US and Singapore, with an estimated USD 55 million transferred to overseas bank accounts disguised as overseas direct investment. An additional Rs 230 crore was allegedly diverted to a subsidiary as purported loans without legitimate business justification. An attempt to divert another Rs 150 crore failed due to non-submission of mandatory audit and utilisation certificates. As part of its investigation, the ED conducted searches on November 18, 2025, and December 30, 2025, leading to the seizure of documents and electronic records. Movable assets, including bank and payment gateway balances, mutual funds, bonds, fixed deposits, and cryptocurrency wallets, valued at approximately Rs 690 crore, were attached and frozen.
Regulatory Crackdown and Sectoral Implications
The chargesheet, filed on January 23, 2026, before the Special Court under the Prevention of Money Laundering Act (PMLA) in Bengaluru, names Winzo Pvt. Ltd., directors Paavan Nanda and Saumya Singh Rathore, and subsidiaries Winzo US Inc. and Winzo SG Pte. Ltd. The ED's investigation was prompted by multiple First Information Reports (FIRs) registered by police authorities across several Indian cities for alleged cheating offences. The ED stated it has established that the accused knowingly generated, possessed, used, concealed, and attempted to project proceeds of crime as untainted property, invoking offences under Section 3 of the PMLA. This regulatory action highlights the increasing scrutiny on the online gaming sector in India. While Winzo operates as a privately held entity, its user base of approximately 25 crore users, largely from tier-3 and tier-4 cities, indicates its significant market presence. The allegations, including severe financial distress and mental stress reported among users, could heighten concerns among investors and regulators regarding the transparency and ethical practices within the broader Indian online gaming industry, which has seen substantial growth but also faces calls for stricter oversight.
Further investigation by the ED is ongoing.