ED raids Gameskraft, WinZO in Delhi, Bengaluru, Gurugram over complaints of ‘manipulated algorithms’

The Enforcement Directorate (ED) on Tuesday raided online gaming companies, Winzo and Gamezkraft (pocket52.com), in multiple locations in Delhi and Bengaluru.

Details of the ED raid

As many as 11 locations, including five in Bengaluru, four in Delhi, and two in Gurgaon, of both Winzo and Gamezkraft are being searched by the law enforcement agency. The raids were conducted by ED's Bengaluru Zonal Office.

According to reports, the ED raids are being conducted at the corporate offices and residences of the CEO/COO/CFO of WinZO and Gamezcraft for alleged rigged algorithms.

Searches also revealed that the promoters hold crypto wallets, indicating a possibility of laundering through cryptocurrencies.

“It is alleged in the FIRs filed by the victims that these gaming companies had manipulated the algorithm of the app, putting the gamers at a disadvantage. During the search, it is unearthed that Promoters are owning crypto wallets, indicating laundering through cryptocurrencies,” ANI quoted ED officials as saying.

Incidentally, leading companies in the online gaming industry, such as, Dream11, My11Circle, WinZO, Zupee, and PokerBaazi (supported by Nazara Technologies) suspended their real-money gaming services following the implementation of the Promotion and Regulation of Online Gaming Act from October 1.

“We have engaged with the industry, we have had multiple discussions with them, we have been having discussions with them for last almost three years. After passing the law, once again, we engaged with them, we also engaged with the banks and practically all stakeholders possible, and we have finalised the rules,” PTI quoted IT Minister Ashwini Vaishnaw as saying.

Gameskraft and WinZO subsequently discontinued their real-money business in India.

Gameskraft operated the online rummy app Rummyculture. The company is now tied up in a fraud scandal involving its former CFO Ramesh Prabhu, who has allegedly siphoned off funds amounting to Rs 270.43 crore over nearly five years.

An FIR has been filed against Prabhu at Bengaluru's Marathahalli police station, following Gameskraft's complaint, Moneycontrol reported on September 16.

WinZO has over 100 games in 15 Indian languages developed by third-party game developers from around the world. It also has a presence in the United States and Brazil.

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