Enforcement Directorate seizes ₹590 crore assets linked to WinZO Pvt Ltd in FEMA probe

The Enforcement Directorate (ED) has seized assets worth more than ₹590 crore linked to real-money gaming platform WinZO Pvt. Ltd. and its subsidiary Zo Pvt. Ltd. as part of an ongoing investigation into alleged violations of foreign exchange laws.

In a statement, the probe agency said its Bengaluru zonal office had attached bank balances, fixed deposits, mutual funds and bonds under Section 37A of the Foreign Exchange Management Act (FEMA), 1999. The action follows findings that the company allegedly contravened provisions of the law governing overseas investments.

According to the ED, WinZO operates in the real-money gaming (RMG) segment, offering more than 100 online games to a claimed user base of over 25 crore. The company is accused of making overseas direct investments into subsidiaries in the United States and Singapore, acquiring foreign exchange worth about $54.25 million (approximately ₹492 crore).

Investigators allege that the platform conducted online gambling-style operations — including games such as bingo, ludo, snakes & ladders, solitaire, spades and blackjack — targeting markets including Brazil, Germany and the United States through its overseas entities. However, the ED claimed the entire gaming infrastructure and operational control remained in India, with foreign subsidiaries lacking independent staff or establishments abroad.

“The complete management and control of these entities, including day-to-day functioning, is exercised by directors and employees from India,” the agency said, adding that accounting records and foreign bank account management were also handled domestically. It further alleged that revenue booked overseas was routed as licensing fees payable to the India entity.

The investigation also found that the company incorporated wholly owned subsidiaries in the US and Singapore to carry out activities described as non-bonafide business operations, which are not permitted under Indian regulations governing overseas investment. Authorities said such investments continued despite restrictions on online gaming under the Promotion and Regulation of Online Gaming (PROG) Act, 2025.

The ED has alleged that foreign income generated from these prohibited activities was retained in overseas accounts, amounting to contraventions under FEMA to the tune of ₹590 crore.

The ED had earlier conducted search and seizure operations at the office premises of Winzo Pvt. Ltd., its director’s residence on November 18, 2025, and its accounting firm on December 30, 2025. Evidence gathered during the searches and subsequent investigation allegedly revealed that the company engaged in fraudulent practices by allowing customers to play real-money games against bots, AI-driven systems, and algorithms — termed PPP, EP, or Persona — without informing them that they were not playing against human opponents.

Investigators said that the company restricted or limited withdrawals from users’ wallets, thereby encouraging continued gameplay. The agency said Winzo generated proceeds of crime in the form of rake commission earned from matches played between bots and real players on its platform. By creating such an environment, users were allegedly induced to repeatedly deposit and play, enabling the company to systematically convert user deposits into revenue through commissions charged on each match.

Further investigation is under progress.