Indian High Court overturns arrests of Gameskraft founders

Charlotte Capewell

18 June 2026 at 5:44am UTC-4

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The Karnataka High Court has declared that the arrests of three founders of Indian online gaming company Gameskraft by the Enforcement Directorate were unlawful.

Justice M. Nagaprasanna allowed petitions filed by the founders, Vikas Taneja, Deepak Singh, and Prithviraj Singh, and ruled that their arrests were contrary to law, directing that all three be released from custody immediately.

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The three were arrested on May 7 as part of an investigation into Gameskraft. The Enforcement Directorate carried out searches, froze assets, and alleged that there were irregularities in the company’s gaming operations.

The latest ruling follows an earlier High Court order in January that stayed an Enforcement Directorate investigation into Gameskraft. At the time, the court questioned whether the agency had the authority to pursue a money-laundering case after the original offense had been closed by police.

The Enforcement Directorate argued that new reports provided a basis for continuing its investigation, and following the May searches, it alleged that Gameskraft used bots to cheat in online games, offered gaming in jurisdictions where it was restricted, and diverted profits through multiple channels.

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However, the founders challenged the arrests on the grounds that no new evidence had been presented and that the Enforcement Directorate was acting in contravention of the January stay order.

The High Court agreed with this argument and the men will now be released.

Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.

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The Backstory

Gameskraft ruling lands amid a wider enforcement push

The Karnataka High Court’s decision to overturn the arrests of Gameskraft’s three founders is the latest turn in a dispute that has become a test case for India’s real-money gaming sector. The ruling narrows, at least for now, the Enforcement Directorate’s ability to pursue the company’s leadership while an earlier court stay on the agency’s investigation remains in place.

The case has drawn attention because Gameskraft sits at the intersection of several unsettled issues in India: whether certain paid online games should be treated as skill-based activity or gambling, how tax claims should be applied to real-money gaming platforms and how far law enforcement can go when underlying police complaints have been closed or remain contested. The High Court’s conclusion that the arrests were contrary to law does not resolve those wider questions, but it raises the threshold for coercive action by investigators while those disputes play out.

The Enforcement Directorate had alleged irregularities in Gameskraft’s operations, including the use of bots, offering games in restricted jurisdictions and diverting profits. The founders argued that the agency had not produced new material sufficient to justify arrests and had acted despite a January order staying its investigation. The court accepted that position, ordering the immediate release of Vikas Taneja, Deepak Singh and Prithviraj Singh.

Arrests followed months of scrutiny and asset freezes

The arrests came after a months-long investigation into fraud-linked money laundering allegations connected to real-money gaming products, including RummyCulture and the RummyTime app. In May, authorities took the three founders into custody under the Prevention of Money Laundering Act after searches across the National Capital Region and Karnataka. Officials also seized documents during the operation, according to the earlier report on the Gameskraft arrests.

That enforcement action did not emerge in isolation. The agency had previously frozen eight escrow bank accounts connected to Gameskraft, signaling that investigators were treating the matter as more than a routine regulatory inquiry. The Enforcement Directorate’s position was that multiple police complaints alleging cheating and fraud supplied the basis for a money-laundering probe, even as Gameskraft and its founders contested the legal foundation for the investigation.

The January High Court stay became central to the dispute. The court had questioned whether the Enforcement Directorate could continue a money-laundering investigation after the original predicate offense had been closed by police. That point matters because money-laundering cases in India generally depend on a scheduled underlying offense. If the base case is absent, closed or legally deficient, defendants can argue that the anti-money-laundering case cannot stand on its own.

Investigators later argued that new reports allowed the probe to continue. The High Court’s latest ruling indicates it was not persuaded that the agency could overcome the stay through the steps it took before arresting the founders. For gaming companies, the decision underscores the importance of procedural limits in investigations that can otherwise move quickly from complaints to searches, account freezes and detention.

Supreme Court case has put industry action on hold

The Gameskraft dispute has also become a reference point for other operators facing uncertainty over India’s treatment of real-money gaming. In February, the Supreme Court directed authorities not to take coercive action against Fanmade11 Fantasy Sports and 9Stacks Games until it delivers judgment in the Gameskraft-linked matter, according to coverage of the Supreme Court order on real-money gaming operators.

That order effectively acknowledged the sectorwide stakes. The pending judgment is expected to clarify the legal and tax treatment of real-money online gaming and fantasy sports after the introduction of the Promotion and Regulation of Online Gaming Act, 2025. The dispute includes questions over the classification of skill-based games and the applicability of goods and services tax demands, issues that can determine whether an operator faces manageable compliance costs or crippling liabilities.

For platforms that operate fantasy sports, rummy or other paid skill-game formats, Gameskraft’s case has become a proxy for the future business model. A ruling that narrows enforcement or tax exposure could support continued investment and product development. A ruling that expands the state’s ability to treat real-money formats as gambling or taxable at higher levels could force operators to restructure, downsize or exit certain markets.

The Supreme Court’s temporary shield for Fanmade11 and 9Stacks also shows how litigation around one major operator can shape enforcement behavior across the industry. Regulators and police agencies may still pursue illegal betting and fraud cases, but courts have signaled caution when the legal status of comparable gaming products is under review.

Illegal betting crackdowns add pressure to legal operators

Gameskraft’s legal battle is unfolding against a backdrop of aggressive policing of online betting, especially during the Indian Premier League season. Although the company’s case concerns real-money gaming operations and alleged money-laundering offenses rather than a simple sports-betting raid, the broader enforcement climate has blurred public and political distinctions between illegal wagering networks and licensed or skill-based gaming platforms.

Police in India recently arrested 14 people across three states in an investigation into the Mahadev betting platform, where suspects were accused of running online betting “panels” tied to IPL wagers. Authorities seized phones, ATM cards, SIM cards, bank passbooks, laptops and cash, while also freezing hundreds of bank accounts, according to a report on the Mahadev-related betting crackdown.

Separate IPL-linked enforcement actions have added to the sense of heightened scrutiny. In Gujarat, police arrested two men at a match in Motera for allegedly placing online bets from inside Narendra Modi Stadium, as described in coverage of the stadium betting arrests. Gujarat bans sports gambling under a law dating to 1887, and police said they were examining whether the incidents were connected to wider illegal networks.

In Goa, police arrested 45 people in hotel-room operations allegedly used to take online bets during IPL games. The state allows casino gambling, but sports betting remains illegal, creating a split regime in which some forms of gambling are permitted while cricket betting is heavily targeted. The Goa arrests illustrated how IPL season can trigger concentrated enforcement across state lines, with agents, bookmakers and online tools forming the focus of investigations.

Regulatory ambiguity has become a business risk

The convergence of tax litigation, money-laundering probes and illegal betting crackdowns has made India one of the most complex major markets for online gaming. Operators must navigate central laws, state-level gambling prohibitions, law enforcement priorities and evolving court doctrine on games of skill. Even companies that argue they do not offer gambling can face reputational and operational damage when enforcement agencies frame complaints as cheating, fraud or laundering cases.

Gameskraft has already felt business pressure from the changing legal environment. The company announced last year that it had cut 120 jobs after the passage of the Promotion and Regulation of Online Gaming Act. That move reflected an industry adjustment to tighter oversight and uncertainty over how new rules would be applied.

The High Court’s latest ruling gives the founders immediate relief, but it does not end the underlying regulatory contest. The Enforcement Directorate may still seek further legal remedies, and the Supreme Court’s expected decision remains central to the industry’s outlook. Until higher courts settle the boundaries, operators will continue to face a patchwork of risk: tax exposure, criminal complaints, account freezes, searches and possible personal liability for executives.

For investors and competitors, the message is mixed. Courts are willing to check enforcement agencies when procedural safeguards are ignored, but the legal foundation of India’s real-money gaming market remains unsettled. The Gameskraft decision therefore functions less as a final victory than as a marker in a longer fight over how India separates regulated skill gaming from illegal betting and how much power enforcement agencies have while that line is still being drawn.