The Karnataka High Court (HC) has stayed the Enforcement Directorate’s (ED) investigation into Gameskraft Technologies. The interim relief was granted by Justice M. Nagaprasanna, who passed the order while hearing a writ petition filed by Gameskraft, challenging the ED’s Enforcement Case Information Report (ECIR) and all proceedings flowing from it, according to Livelaw.
The court intervened after it emerged that the police had already closed the underlying criminal case on which the ED’s probe was based, and that the competent court had accepted the closure report before the ECIR was registered.
In view of this, Justice Nagaprasanna held that the ED could not continue its investigation when the foundational offence itself no longer survived. The judge observed that “in light of the closure report”, the foundation for the ECIR had vanished, and added that the agency’s inquiry into a closed predicate offence “cannot be permitted”.
During the hearing, senior counsel appearing for Gameskraft argued that the ED’s action came once the predicate offence stood closed. On the other hand, the Additional Solicitor General Arvind Kamath, appearing for the ED, argued that the agency can update an ECIR when fresh material emerges or when investigators identify additional predicate offences during the course of the probe.
However, the court directed the ED to place on record the legal basis for such a practice and granted time to file its objections. Until then, the investigation remains stayed, with the court signalling that the existence of a predicate offence is central to the continuation of proceedings under the money-laundering law.
ED investigation Of Gameskraft
In November 2025, the ED launched an expansive money-laundering probe into Gameskraft Technologies, alongside several other online gaming firms, marking one of its most high-profile actions against the real-money gaming (RMG) sector.
The investigation began with coordinated raids at 11 premises linked to Gameskraft and peer WinZO across Bengaluru, Delhi and Gurugram, including corporate offices and the homes of senior executives. The ED’s inquiry followed multiple complaints from players alleging that the firms manipulated their gaming algorithms, disadvantaging users and undermining fairness.
During search operations, investigators seized phones, data backups, and laptops. Furthermore, they uncovered cryptocurrency wallets linked to the platforms’ promoters, which raised suspicion of money laundering through digital assets, a concern that broadened the probe beyond traditional banking channels. Additionally, the ED found that even after the RMG ban, the company held Rs 30 crore in escrow accounts that it did not refund to customers.
RMG Ban, Money Laundering And Enforcement
In August 2025, India passed the Promotion and Regulation of Online Gaming Act, 2025 (PROGA), which created a comprehensive legal framework for online gaming and imposed a complete ban on RMG, defined as any game involving stakes with monetary returns. The Act received presidential assent after approval by both houses of Parliament within the same month and outlaws the operation, advertising and financial facilitation of RMG platforms across the country.
The Central Government later told the Supreme Court that concerns about money laundering and illicit fund flows were a major basis for the RMG ban. In an affidavit filed in response to legal challenges, the government said that enforcement and financial intelligence inputs showed a sharp increase in suspicious transaction enquiries linked to RMG, with platforms using cryptocurrencies and mule accounts to move funds.
Since PROGA came into force, authorities have not only blocked thousands of unregulated gambling sites but also stepped up money-laundering investigations into erstwhile RMG operators. The ED has launched probes into several major companies previously active in the RMG space, alleging algorithmic manipulation, money laundering, and retention of player funds. Among the firms under scrutiny are Gameskraft, WinZO, Dream11, Probo, and Pocket52.
Curated by James Chen
