New Delhi, November 27, 2025 – The Enforcement Directorate (ED) has arrested Paavan Nanda, co-founder of the online gaming platform WinZO, along with his business partner Saumya Singh Rathore, on charges of money laundering. The arrests were made in Bengaluru on Wednesday, following the investigation by the ED into alleged financial irregularities linked to real-money gaming operations in India.

The ED, in a statement issued on Monday, alleged that WinZO had “held” funds worth ₹43 crore belonging to gamers, which should have been refunded after the Union government banned real-money gaming (RMG) in the country on August 22, 2025. The agency accused the company of failing to return the money to users even after the ban, suggesting that this constituted a violation under the Prevention of Money Laundering Act (PMLA).

Paavan Nanda: Entrepreneurial Journey

Paavan Nanda, 38, is a seasoned entrepreneur with multiple successful ventures in the technology and hospitality sectors. He co-founded WinZO seven years ago, building the platform into one of India’s prominent real-money gaming (RMG) operators, with international operations spanning Brazil, the United States, and Germany.

Before WinZO, Nanda co-founded Zostel, a chain of backpacker hostels across India, in 2013. Zostel became well-known for offering affordable accommodation to young travelers and backpackers, promoting community-based travel experiences. Around the same time, he also launched ZO Rooms, a hotel aggregator platform aimed at providing budget-friendly stays. ZO Rooms, however, has since shut down, leaving Zostel as the primary venture.

Nanda holds a strong academic and professional background. He earned a Bachelor of Engineering (BE) in 2009 from Netaji Subhas Institute of Technology, New Delhi, followed by an MBA in Finance and Strategy from the Indian Institute of Management (IIM), Calcutta. Professionally, he has experience working with Merrill Lynch, one of the world’s leading wealth management and investment firms, where he gained exposure to financial strategy and investment operations.

Over the past decade, Nanda has established himself as a prominent figure in India’s startup ecosystem, particularly in technology-driven platforms that cater to gaming, hospitality, and fintech.

ED Allegations Against WinZO

The ED, in its investigation, raided the offices of WinZO and Gamezkraft, another online gaming company, citing violations under the PMLA. The agency alleged that WinZO engaged in “criminal activities and unscrupulous practices,” asserting that users on the platform were playing against software algorithms without their knowledge, instead of competing against other human players.

The agency further alleged that WinZO had prevented or limited withdrawals of money from users’ wallets, thereby “illicitly retaining funds generated from bet amounts lost by gamers.” Bonds, fixed deposits, and mutual funds totaling ₹505 crore possessed by WinZO were frozen as part of the probe.

According to the ED, these actions constituted money laundering and fraudulent practices, as customers were allegedly misled about the nature of gameplay and denied access to funds they were legally entitled to withdraw. The agency emphasized that the case stems from both the violation of real-money gaming bans in India and the misuse of customer funds for financial gain.

Company Response

In response to the allegations, a spokesperson for WinZO stated that “fairness and transparency are core to how the company designs and operates its platform.” The company maintained that it adheres to all legal requirements and operational standards, emphasizing its commitment to providing a safe and regulated gaming environment for users.

However, the ED’s arrest of Nanda and Rathore highlights the growing scrutiny of online money gaming platforms in India, particularly in the context of government restrictions on RMG operations. The case is expected to draw significant attention from regulators, investors, and industry observers, as it underscores the legal risks associated with operating real-money gaming platforms under changing regulatory frameworks.

Background on WinZO and RMG Ban in India

WinZO was among the leading online gaming platforms in India, offering users the opportunity to play a variety of skill-based games for real money. The platform attracted millions of users across India and abroad, combining digital entertainment with monetary incentives. However, following reports of misuse, lack of transparency, and the potential for financial losses among users, the Government of India imposed a ban on real-money gaming platforms in August 2025.

Following the ban, online gaming companies were required to refund user deposits and halt operations that offered real-money stakes. The ED’s investigation indicates that WinZO allegedly failed to comply with these directives, leading to the freezing of assets and subsequent arrests of its founders.

What Happens Next

Following the arrests, Nanda and Rathore are expected to be presented before a court in Bengaluru. Investigations by the ED are ongoing, with the agency examining the flow of funds, financial statements, and platform operations to determine the extent of alleged money laundering and violation of RMG regulations.

Industry experts suggest that the case could have broader implications for India’s online gaming sector, particularly regarding compliance, user fund security, and regulatory oversight. Legal analysts indicate that the outcome of this case may set precedents for how real-money gaming platforms are governed, especially in terms of consumer protection and adherence to national directives.

Conclusion

Paavan Nanda, a prominent entrepreneur with a history of building successful startups, now faces a critical legal challenge as he navigates allegations of money laundering and non-compliance with RMG regulations. The Enforcement Directorate’s move underscores the increasing focus of Indian authorities on ensuring accountability and financial transparency in the rapidly growing online gaming sector.

As investigations progress, the case is likely to impact not only WinZO’s operations but also the broader landscape of online gaming and real-money platforms in India, emphasizing the need for stringent adherence to regulatory frameworks and robust consumer safeguards.