The Directorate of Enforcement (ED) has intensified its action against real-money gaming platform WinZO by moving the Karnataka High Court to cancel the bail granted to its co-founder, Saumya Singh Rathore, in an ongoing money-laundering investigation.
In a criminal petition filed under Section 439(3) of the Code of Criminal Procedure (now corresponding to Section 483(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023), the agency has sought to set aside the December 26, 2025 order of the Special Court (PMLA) in Bengaluru, which had granted bail to Rathore. The ED has urged the High Court to revoke the relief and direct her immediate custody, contending that the sessions court erred in extending bail.
The matter is presently listed before the Registrar for removal of office objections, including procedural compliances such as submission of certified copies. A date for substantive hearing has not yet been notified.
Bail Granted Under Proviso to Section 45 of PMLA
Rathore was granted bail by Principal City Civil and Sessions Judge M. Chandrashekar Reddy in proceedings arising under the Prevention of Money Laundering Act, 2002 (PMLA). The court extended relief on the statutory ground available to women under the proviso to Section 45(1)(ii) of the Act.
Under Section 45 of the PMLA, stringent “twin conditions” ordinarily govern the grant of bail in money-laundering cases, requiring courts to be satisfied that the accused is not guilty and is unlikely to commit further offences. However, the proviso exempts certain categories, including women, from these conditions.
The sessions court observed that since the accused is a woman, the twin conditions were not applicable in her case. It further noted that Rathore had already undergone significant custodial interrogation and that continued detention was not justified merely on the ground that she may need to be confronted with employee statements or additional evidence.
The court directed Rathore to furnish a personal bond of ₹5 lakh with two sureties, surrender her passport, refrain from leaving India without prior court permission, and cooperate fully with the investigation.
The ED was represented by advocate Madhu N. Rao, while Rathore was represented by senior advocate Sajan Poovayya. Co-accused Nanda was represented by senior advocate M.S. Shyam Sundar.
ED Allegations: Algorithmic Manipulation and Overseas Diversion
The ED registered its Enforcement Case Information Report (ECIR) on November 6 based on predicate offences reflected in three FIRs registered in Bengaluru, Rajasthan and Delhi. Search and seizure operations were conducted between November 18 and 22 at Rathore’s residence and at the premises of WinZO Games Pvt Ltd. Rathore and co-founder Nanda were arrested on November 26.
According to the agency, WinZO’s real-money gaming operations allegedly involved manipulation through the use of algorithms and bots, resulting in wrongful gains estimated at approximately ₹177 crore.
The ED has further alleged that proceeds of crime were diverted to overseas subsidiaries and laundered through cloud infrastructure hosted on Amazon Web Services. It has also raised concerns about alleged misuse of user identities and transnational fund flows amounting to nearly $55 million.
The founders have denied the allegations, asserting that they cooperated during searches and questioning. They have also challenged the legality of the ED’s search and seizure proceedings.
₹590 Crore Seized Under FEMA
In a parallel development, the ED’s Bengaluru Zonal Office announced the seizure of assets worth approximately ₹590 crore belonging to WinZO and its subsidiary Zo Pvt. Ltd. under Section 37A of the Foreign Exchange Management Act, 1999 (FEMA).
The agency stated that bank accounts, fixed deposits, mutual funds and bonds linked to the two entities were seized for alleged contraventions of Section 4 of FEMA.
As per the ED’s press release, WinZO is alleged to have transferred nearly ₹492 crore to entities in the United States and Singapore by acquiring foreign exchange under the guise of overseas direct investment. The agency contends that these overseas entities lacked regular employees and independent business establishments, and that operational control—including day-to-day management, accounting, foreign bank account handling and gaming functions—remained in India.
The ED has also alleged that WinZO operated real-money gaming and online gambling platforms globally, offering games such as Bingo 2p, Ludo, Snakes & Ladders, Mines, Solitaire, Spades and Black Jack in markets including Brazil, Germany and the United States. It has claimed that revenue-generating activities outside India were entirely dependent on infrastructure located within the country.
With the High Court now seized of the bail cancellation plea and significant assets frozen under FEMA, the case marks a major regulatory and legal challenge for one of India’s leading gaming startups.
