Karnataka High Court Seeks Full Financial Disclosure From WinZO as ED Probe Intensifies

The legal spotlight on India’s real-money gaming sector sharpened further this week, with the Karnataka High Court stepping in to closely examine the financial operations of gaming platform WinZO. In a development that could have wider implications for the industry, the High Court has directed WinZO to submit comprehensive financial details of its business, even as it asked the Enforcement Directorate (ED) to consider a proposal to de-freeze the company’s bank accounts against a bank guarantee of ₹505 crore.

The order came amid a high-stakes legal battle between the gaming startup and the central agency, following sweeping search operations, arrests of the company’s cofounders, and the freezing of assets running into hundreds of crores.

Court steps in amid escalating dispute

As per reports, a bench led by Justice Suraj Govindaraj heard WinZO’s plea seeking relief from the freezing of its bank accounts by the ED. While the Court did not grant immediate relief, it asked the ED to consider de-freezing the accounts if WinZO furnishes a bank guarantee equivalent to the frozen amount of ₹505 crore.

At the same time, the High Court directed WinZO to place on record detailed financial disclosures. These include the total money deposited by users on its platform, payouts made to customers, and a clear picture of how funds move through the company’s ecosystem.

Importantly, the Court also sought full disclosures relating to WinZO’s subsidiaries and related entities, both in India and overseas—signalling a broader scrutiny of the company’s corporate and financial structure.

The matter has now been listed for its next hearing later today (December 18).

Background: ED searches and asset freeze

The case traces its roots to enforcement action taken by the ED last month. In November, the agency conducted search operations at four locations linked to WinZO in Delhi and Gurugram. These searches culminated in the freezing of bank balances, fixed deposits and mutual fund holdings worth ₹505 crore under provisions of the Prevention of Money Laundering Act (PMLA), 2002.

Soon after, WinZO’s two cofounders—Paavan Nanda and Saumya Singh Rathore—were arrested by the agency, marking a rare and serious escalation against a gaming startup of WinZO’s scale.

According to the ED’s Bengaluru Zone, the action followed multiple FIRs filed against the company. These FIRs reportedly accused WinZO of cheating users, blocking player accounts, impersonation, misuse of PAN details and irregularities in KYC processes. Complaints also alleged that users suffered financial losses due to fraud on the platform.

WinZO challenges proportionality and legality

In its petition before the Karnataka High Court, WinZO has argued that the ED’s action was excessive. The company reportedly claimed that the ₹505 crore frozen by the agency was disproportionate to the amount allegedly involved in the offence.

The gaming firm has also urged the Court to declare the search and seizure operation illegal and void. Among its key arguments is the claim that the mandatory recording of search and seizure proceedings—required under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023—was not carried out.

Separately, WinZO told the Court that it apprehends the ED may rely on statements allegedly recorded from its cofounders at the company’s office, which were not captured on camera, during the hearing of their bail pleas before a local court.

ED counters with allegations of misconduct

The ED, however, has pushed back strongly against WinZO’s claims. During the hearing, the agency’s counsel reportedly told the Court that the searches led to the seizure of incriminating material.

According to the ED, this material suggests that WinZO deployed a “stealth algorithm” on its platform, even as it assured customers that the games were free from bots. The agency has alleged that bots were used to artificially boost engagement on the platform.

The ED has further claimed that WinZO retained around ₹43 crore that should have been refunded to players and diverted funds overseas. In one of the most serious allegations, the agency said that nearly $55 million (approximately ₹489.9 crore) was parked in the United States through a shell entity named WinZO US Inc., despite the company’s operations being controlled from India.

Adding another layer to the case, the ED alleged that WinZO continued to operate real-money games in several overseas markets through its Indian platform, even after online real-money gaming was banned in India post August 2025.

A case closely watched by the startup ecosystem

The unfolding case has drawn intense attention from founders, investors and policymakers across India’s startup ecosystem. WinZO, a prominent name in the real-money gaming space, now finds itself at the centre of a legal and regulatory storm that touches upon compliance, cross-border fund flows, platform transparency and user protection.

As the Karnataka High Court seeks deeper financial disclosures and weighs the company’s plea for relief, the next hearing is expected to be crucial—not just for WinZO, but for how enforcement and regulation of gaming startups could evolve in the months ahead.

For now, all eyes remain on the courtroom, where the balance between enforcement action and corporate rights is being tested in one of the most closely watched startup cases of the year.