The Gameskraft ED raid has become one of the most closely watched cases in India’s gaming sector. What started as a money-laundering search in May ended with frozen accounts, three arrested founders, and a sharp legal reversal weeks later.
On June 16, the Karnataka High Court declared those arrests illegal and ordered the founders released. It was a major setback for the Enforcement Directorate, and a reminder that, at this stage, the agency’s claims remain allegations rather than proven facts. Here is a clear breakdown of what happened and where the case stands.
The raids and the ₹526 crore freeze
The Enforcement Directorate’s Bengaluru zone searched Gameskraft Technologies and its founders from May 7 to May 13, 2026. The operation covered 17 locations across Karnataka and the Delhi-NCR region, taking in company offices and the homes of senior executives.
According to the ED, the agency froze movable assets worth about ₹526.49 crore, including bank balances, payment gateway deposits, mutual funds, bonds and fixed deposits. It also reported seizing around 2.3 kg of gold and diamond jewellery and bullion worth roughly ₹3.5 crore, plus ₹11 lakh in cash. All of it fell under the Prevention of Money Laundering Act (PMLA).
What the ED alleges
The case rests on a set of serious claims, none of which has been tested in a full trial. The agency says Gameskraft ran real-money rummy platforms including RummyCulture, RummyPrime, RummyTime and Playship, plus a B2B app called RummyCorner, with a user base of roughly 3 crore.
The ED alleges the company used bots, or automated software, during gameplay without telling users, while publicly claiming the platform was transparent and bot-free. It also claims the firm kept operating in states where real-money gaming is restricted, such as Telangana, Andhra Pradesh and Tamil Nadu, by working around geolocation checks. New players, the agency says, were allowed small early wins to build confidence before bots were used harder in higher-stake games, with users drawn in through bonuses, referral rewards, instant cash offers and tournament perks. The company charged a 10 to 15 percent commission on stakes, it adds.
On the money trail, the ED claims the founders laundered around ₹250 crore of alleged proceeds through foreign investments, dividends, mutual funds, bonds, property and bogus expense entries. It has separately claimed users lost more than ₹1,100 crore to bot-linked accounts, and that the platform’s design pushed vulnerable players into serious financial and, in some cases, severe personal distress. Gameskraft has not accepted these characterisations, and its founders have fought the case in court.
The arrests and the founders’ challenge
During the May searches, the ED arrested three founders, Deepak Singh, Prithvi Raj Singh and Vikas Taneja, under Section 19 of the PMLA. Two were taken into custody in the Delhi-NCR area and brought to Bengaluru on transit remand; the third was held in Bengaluru. A special court sent them first to ED custody, then to judicial custody.
The founders moved the Karnataka High Court fast, arguing the agency had produced no fresh evidence and was reviving stale allegations. They pointed to a January 22, 2026 order, when the same court had stayed an earlier ED probe after the underlying police case was closed. With that foundation gone, they said, the new arrests could not hold.
Karnataka High Court calls the arrests illegal
On June 16, Justice M. Nagaprasanna agreed and declared the arrests illegal, calling them “contrary to law” and ordering an immediate release.
His reasoning was pointed. The ED had not thought arrest necessary six months earlier on much the same material, so a fresh case could not turn old allegations into new grounds for custody. The court found no fresh predicate offence beyond a handful of recent complaints, noted that no summons had been issued before the arrests, and held that the agency had skipped the safeguards built into Section 19 of the PMLA. It relied on the Supreme Court’s Pankaj Bansal and Arvind Kejriwal rulings, which treat money-laundering arrests as a serious step rather than a routine one.
A detailed copy of the judgment is still awaited. Crucially, the order deals only with the legality of the arrests, not the wider investigation, so the broader probe and the asset freeze remain open questions.
The case sits against a wider regulatory backdrop. India banned online real-money games in 2025 through the Promotion and Regulation of Online Gaming Act, and Gameskraft suspended RummyCulture and its other paid platforms that August, saying it respected the law and treated compliance as non-negotiable. The online gaming rules that took effect in 2026 tightened the ban further.
This is not the company’s only legal battle. Gameskraft is among the firms named in GST disputes worth roughly ₹2.5 lakh crore now before the Supreme Court, and it separately flagged alleged irregularities tied to a former finance executive in 2025. Some reports suggest the latest action could further unsettle investors in a sector already strained by the ban.
For now, the key things to track are the detailed High Court judgment, whether the ED appeals, and what happens to the frozen assets and the underlying probe. For an industry still finding its feet after the real-money gaming ban, the answers could shape how hard agencies go after former operators next.
