ED Arrests WinZO Founders Over Alleged Fraud, Hidden Gaming Algorithm And Offshore Money Transfer

The Enforcement Directorate (ED) arrested gaming-platform WinZO co-founders Saumya Singh Rathore and Pavaan Nanda in a money laundering case linked to multiple cheating complaints filed across the country.

The action comes after searches at the company’s office and homes on 18 November 2025 under the Prevention of Money Laundering Act (PMLA).

According to the ED, the case is based on several FIRs alleging cheating, blocking of user accounts, misuse of PAN details and financial losses to users.

Winzo, earlier known as Ticktok Skill Games Pvt. Ltd., launched in 2016 and runs the “WINZO” gaming app, offering real-money games such as rummy, solitaire, ludo, poker and chess.

The company claims it stopped real-money games in India after the Promotion and Regulation of Online Gaming Act, 2025 came into force. It has more than 250 million registered users, largely from smaller towns and rural areas.

Hidden Algorithm Found

The ED said its search revealed the company used a concealed algorithm called PPP (Past Performance of Player) in real-money games.

Officials said the software matched live players against automated gameplay generated from past user profiles without informing them. Users whose profiles were used were also not told or asked for consent.

The agency said this system helped the company make about ₹177 crore in the past 14 months while causing losses to genuine players.

One user cited by investigators had played only one game in January 2025, but his profile was allegedly used for 32 games in March without his knowledge.

Restrictions On Withdrawals

The probe also found that Winzo imposed strict conditions on withdrawing money from in-app wallets. While users could deposit freely, they could withdraw only “winnings.”

Daily withdrawal limits depended on loyalty levels, with a maximum of around ₹99,000. ED said this forced users to keep playing to recover their own deposited money, increasing the risk of losses, especially because of the secret PPP algorithm.

The agency also alleged arbitrary blocking of user wallets. Winzo’s escrow account held about ₹43 crore marked as “payable to users,” which the ED said reflected widespread blockage of legitimate user funds.

Foreign Subsidiaries And Offshore Transfers

Winzo has three subsidiaries, including two abroad—one in the US and one in Singapore. The ED said the foreign units were effectively managed from India, including daily operations and control of foreign bank accounts.

Investigators said the company diluted shares over time and routed funds to its US arm, where foreign bank accounts held around USD 55 million (₹489.9 crore) as of 22 November.

The agency also found an agreement to transfer intellectual property and a database of about 25 crore users, including KYC details, to the US entity after India banned certain real-money games.

Officials said this amounted to theft of user identity and an attempt to shift banned operations overseas, accessible through VPN.

Citing the risk of flight of directors and diversion of revenue abroad, the ED froze the company’s bank accounts. Rathore and Nanda were arrested on 26 November 2025 and produced before a magistrate the same day.

On 27 November, a special court sent them to ED custody for 10 days, until 6 December.