A sessions court in Bengaluru delivered a split verdict on December 26 in the high-profile money laundering case involving gaming platform WinZO Games Pvt Ltd. The court granted bail to co-founder Saumya Singh Rathore but denied the same relief to the company's other co-founder, Paavan Nanda, authorising the Enforcement Directorate (ED) to take him into custody for four days.
Court's Split Decision and Legal Reasoning
Principal City Civil and Sessions Judge M. Chandrashekar Reddy issued the joint order in connection with a complaint under the Prevention of Money Laundering Act (PMLA), 2002. The court ruled that Rathore, being a woman, qualified for relief under the proviso to Section 45 of the PMLA. This provision exempts women accused from the stringent twin conditions usually required for bail in money laundering cases.
The judge noted that Saumya Singh Rathore had already undergone extensive questioning in custody and that further detention was unnecessary. The court explicitly stated that the need to confront her with employee statements or collect more evidence did not justify further custody by the ED.
In contrast, the court denied bail to Paavan Nanda, the 38-year-old co-founder. Nanda, an alumnus of IIM Calcutta and NSIT Delhi, is known for his earlier venture, the backpacker hostel chain Zostel and ZO Rooms.
The Massive Money Laundering Probe
The ED's case, filed on November 6, stems from a Gurugram police cyber crime FIR. The complaint originated from a gamer who alleged losing nearly ₹42 lakh through WinZO's real-money games like ludo. The agency's investigation has since uncovered allegations of much larger financial malfeasance.
The ED alleges that WinZO and its directors cheated real-time players by using a deceptive "PPP" algorithm, generating proceeds of crime amounting to at least ₹177 crore between May 2024 and August 2025. The directors are accused of diverting these funds to foreign subsidiaries, a key element of the money laundering charge.
Significantly, the agency claims that funds worth USD 55 million (approximately ₹489.90 crore) have been parked in a US bank account under 'WINZO US Inc', which it describes as a shell company. The ED asserts all operations and bank account management were conducted from India.
Allegations Against WinZO's Operations
The Enforcement Directorate has levelled serious allegations against the company's business practices. It states that WinZO engaged in unscrupulous practices where customers played against algorithms or software without being informed they were not competing with other humans. Furthermore, the agency accused WinZO of preventing and limiting withdrawals of money held by customers in their WinZO wallets.
Despite a Union government ban on real-money games effective August 22, 2025, the ED alleges WinZO continues to hold ₹43 crore without refunding gamers. The probe also revealed that WinZO was operating its real-money games from India in overseas markets, including Brazil, the United States, and Germany, using the same platform as its Indian operations.
Profiles of the Accused Founders
Saumya Singh Rathore co-founded WinZO in 2018. Her educational background includes a master's degree in Organisational and Consumer Psychology from the University of Manchester and earlier studies in Applied Psychology at Bangalore University.
Paavan Nanda, the co-founder denied bail, is a seasoned entrepreneur. Before launching WinZO, he was instrumental in building Zostel and its budget-hotel aggregation venture, ZO Rooms. He holds an engineering degree from NSIT Delhi and an MBA from IIM Calcutta (2014).
The case highlights the increasing legal and regulatory scrutiny facing India's online real-money gaming industry, particularly concerning allegations of financial fraud, customer protection, and compliance with anti-money laundering laws. The divergent bail outcomes for the two co-founders also underscore how specific legal provisions, such as those relating to gender under the PMLA, can significantly influence judicial decisions in financial crime cases.
