ED Arrests Three GamezKraft Founders In Money Laundering Case Linked To RummyCulture And Online Gaming Apps

Mumbai: The Enforcement Directorate (ED) on Friday arrested three founders of GamezKraft Technologies Ltd in connection with a money laundering probe linked to alleged cheating and fraud through online real-money gaming platforms, including “RummyCulture” and the “RummyTime” app.

Searches conducted at 17 locations across Karnataka and NCR

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The arrested accused were identified as Deepak Singh, Prithvi Raj Singh and Vikas Taneja. According to officials, the arrests were made under Section 19 of the Prevention of Money Laundering Act (PMLA) following searches conducted on Thursday at 17 locations across Karnataka and the National Capital Region (NCR) linked to GamezKraft group companies, founders and employees. Officials said several incriminating documents and digital records were seized during the searches.

The ED case against GamezKraft Technologies Ltd and associated entities is based on multiple FIRs registered in different states alleging cheating, fraud and other offences linked to online real-money gaming applications operated by the company. Officials said the investigation primarily pertains to alleged irregularities surrounding platforms such as “RummyCulture” and the “RummyTime” app.

Some FIRs involve victims who died by suicide after financial losses

According to officials, some FIRs also pertain to allegations involving victims who allegedly died by suicide after suffering financial losses linked to online gaming activities.The agency is examining the financial transactions, revenue models and fund movement associated with the gaming platforms as part of the money laundering investigation.

Officials alleged that the material gathered during the raids indicated the involvement of the founders in activities amounting to proceeds of crime under the PMLA. The agency is also examining the role of associated entities and financial beneficiaries connected to the operations of the gaming platforms.

November 2024 searches froze Rs 18.57 crore in escrow accounts

In November last year,the agency conducted searches at multiple locations linked to Gameskraft, Nirdesa Networks and related online gaming platforms, following allegations of manipulated game outcomes, restricted withdrawals and cheating complaints filed by users. During that operation, the ED froze eight escrow bank accounts linked to Gameskraft and associated entities holding approximately Rs 18.57 crore, alleging that the funds represented suspected proceeds of crime. Officials had also alleged that more than Rs 30 crore remained in company-controlled escrow accounts without being refunded to users.

The ED is also examining the financial structure of the gaming platforms, including revenue generation models, transaction flows, user deposits and the movement of funds between associated entities. Officials alleged that the founders played a direct role in the operation and financial management of the platforms under investigation.

Gameskraft founded in 2017, operates RummyCulture, RummyTime, Gamezy

Gameskraft, a Bengaluru-based online gaming company founded in 2017, operates multiple gaming platforms including RummyCulture, RummyTime and Gamezy, offering online rummy, fantasy sports and other skill-based gaming formats. Officials said the present investigation is focused primarily on alleged irregularities linked to the company’s real-money rummy operations.

The company had earlier come under scrutiny in a separate high-profile GST dispute involving an alleged tax demand exceeding Rs 21,000 crore. In 2022, the Directorate General of GST Intelligence (DGGI) issued a notice alleging that the company’s online gaming operations amounted to betting and gambling activities liable for 28 per cent GST.

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Karnataka HC quashed GST notice in 2023; Supreme Court stayed order

Gameskraft challenged the notice before the Karnataka High Court, arguing that online rummy is legally recognised as a game of skill and that GST should apply only to platform fees rather than the entire stake pool. In 2023, the High Court quashed the GST notice in favour of the company. The Union government later challenged the ruling before the Supreme Court, which subsequently stayed the High Court order. The larger issue relating to GST liability on online real-money gaming platforms remains pending before the apex court.

Officials clarified that the current ED investigation is separate from the GST proceedings and is focused on allegations of cheating, fraudulent inducement, fund routing and laundering of alleged proceeds generated through gaming operations.

The agency is now examining the role of associated companies, financial beneficiaries and senior employees linked to the gaming platforms. More individuals are likely to be questioned as investigators trace the flow of funds and analyse digital and financial evidence seized during the searches.

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