ED raids set off panic in Gaming sector as companies query authorized foundation, refund mandate

The Enforcement Directorate’s current motion in opposition to WinZO and Gameskraft has despatched shockwaves by way of India’s on-line actual cash gaming ecosystem, with a number of platforms expressing deep concern over the timing and authorized sustainability of the crackdown—particularly because the Promotion and Regulation of Online Gaming Act (PROGA), 2025) has not but come into pressure.

Industry stakeholders say the ED’s transfer has created confusion, notably across the remedy of unwithdrawn person funds at a time when the draft Promotion and Regulation of Online Gaming (PROG) Rules, launched by MeitY on October 2, are nonetheless below session.

Under the draft guidelines, corporations are anticipated to repay customers’ pending balances inside a 180-day window as soon as the Act is enforced. According to Rule 24, any funds on account of customers earlier than enforcement could also be remitted with out such transfers being handled as facilitating money-gaming transactions. After this 180-day grace interval ends, platforms can not legally remit such funds, as doing so might be construed as enabling banned money-gaming companies.

Given that PROGA is but to be notified, corporations argue the ED’s actions seem misaligned with the upcoming regulatory structure.

Firms Alarmed as ED Flags Unreturned Balances

According to the ED, WinZO continued working real-money video games in overseas jurisdictions—together with Brazil, the US and Germany—from India utilizing the identical platform as its home operations. Investigators additionally declare the corporate held ₹43 crore belonging to customers, even after the Union Government’s ban on RMGs efficient August 22, 2025.

This allegation has put different platforms on edge, particularly smaller operators which can be nonetheless struggling to clear dormant wallets.

A Rajasthan-based gaming startup mentioned the scenario has pushed them to the brink: “We are on the verge of winding down the company. We’ve asked users repeatedly to withdraw their funds, but most simply never respond,” a senior govt mentioned, requesting anonymity.

The founder added that the corporate is prepared to adjust to any mechanism prescribed by the federal government—even depositing the quantities with a regulator: “If the government gives clarity, we can transfer these balances to SEBI or RBI. But our T&Cs treat unclaimed balances as revenue after a fixed period. We need a rulebook before punitive action begins.”

Escrow Accounts Frozen, Payouts Halted

In the case of Nirdesa Networks Pvt. Ltd. (NNPL) and Gameskraft Technologies Pvt. Ltd. (GTPL), the ED has frozen eight escrow accounts with mixed balances of ₹18.57 crore, citing suspicion of proceeds of crime being parked by entities together with NNPL and Pocket52.

Escrow accounts kind the spine of payout operations in real-money gaming, facilitating motion between customers and the platform.

A compliance official at a mid-sized gaming firm mentioned the freezes have created concern throughout the sector, “Escrow accounts are not profit accounts—they hold player money. If these are frozen, payouts stop immediately. This affects users, not just companies.”

Legal analysts argue that the ED’s reliance on alleged violations associated to real-money gaming might not stand agency, provided that PROGA 2025 has but to be notified, and the framework governing refund procedures continues to be in draft kind.

One coverage professional advising gaming companies on the brand new laws famous, “The draft rules explicitly allow a 180-day repayment period once the Act is in force. If the Act hasn’t even in, it raises serious questions about whether non-refund of balances right now can be treated as wrongdoing.”.

Stakeholders say their largest concern is the dearth of readability round dormant person balances—a long-standing ache level for gaming platforms.

Platforms earlier sought clarification from the federal government on a vital operational query: If a person doesn’t withdraw their pockets steadiness regardless of repeated reminders, can the platform unilaterally push the remaining quantity to the person’s final verified checking account?

An govt from a high gaming federation mentioned the paradox is being exploited to justify enforcement. “We have KYC bank details. If we push funds back proactively, will it be treated as refund or illegal facilitation? The rules are unclear, and companies don’t want to trigger further action.”

Another trade consultant added, “Firms are paralysed. They’re scared of issuing refunds and equally scared of holding balances. The ED’s actions have created a compliance vacuum.”

With PROGA 2025 but to return into pressure, the trade is interesting for pressing readability from MeitY and the Finance Ministry to stop additional disruptions.

Stakeholders say that till the Act and guidelines are enforced—together with clear directions on person wallets, refund mechanisms, dormant accounts and escrow liabilities—the ecosystem will stay in a state of uncertainty.

ED’s motion has resulted within the freezing of greater than ₹505 crore linked to WinZO Games Pvt. Ltd., along with seizures and account freezes related to Pocket52 operator Nirdesa Networks Pvt. Ltd. (NNPL) and Gameskraft Technologies Pvt. Ltd. (GTPL).

According to the ED, its Bengaluru Zonal Office carried out coordinated searches at 4 areas in Delhi and Gurgaon as a part of an ongoing probe in opposition to WinZO Games Pvt. Ltd., which operates the WinZO real-money gaming app. The company froze proceeds of crime valued at about ₹505 crore, together with financial institution balances, mounted deposits, bonds and mutual funds, below Section 17(1A) of PMLA.

First Published on Nov 27, 2025 9:00 AM