The Karnataka High Court has stayed the Enforcement Directorate (ED) investigation against real money gaming (RMG) startup GamesKraft following a plea filed by the company yesterday.

The plea, which sought to quash the money laundering investigation, was jointly filed by Gameskraft and Nirdesa Networks, the parent company of online poker platform Pocket52, which is also being investigated by the ED as part of its crackdown against RMG.

Gameskraft argued that the basis of the investigation against it was a single FIR filed in Bengaluru. It further claimed that the case was closed in July due to lack of incriminating evidence which, as per the company’s counsel, should have led to the closure of ED’s investigation.

In its order, the court took cognisance of this argument, judging that rendering further enforcement efforts baseless since the original complaint for the case has been closed.

While the ED agreed with this argument, the agency countered that six FIRs related to Gameskraft are still being investigated. Arvind Kamath, additional Solicitor General of India appearing on behalf of ED, stated that other FIRs against the accused as and when they come to light can always be added in the ED’s Enforcement Case Information Report against Gameskraft.

The agency has been permitted to file a response to the order and bring on record the pending FIRs it mentioned. The next hearing for the case is scheduled February 6.

At the heart of the issue is the agency’s investigation into alleged cheating and money laundering cases linked to Pocket52 and Gameskraft. Last November, the ED searched offices and residences linked to GamesKraft and Pocket52 in Bengaluru and Gurugram last November under the Prevention of Money Laundering Act.

At the time, the enforcement agency had seized mobile phones, laptops and backed up company data belonging to Gameskraft. It also claimed that the company held over INR 30 Cr in escrow accounts and froze eight escrow accounts holding around INR 18.57 Cr belonging to various entities as suspected proceeds of crime.

The probe stems from an FIR alleging large-scale fraud on the Pocket52 platform, including manipulated game outcomes, withdrawal restrictions and removal of features like hand history. One complainant reportedly claimed to have lost over INR 3 Cr to the suspected rigging.

The action had come on the heels of a nationwide ban on RMG under the Promotion and Regulation of Online Gaming Act, enacted on 22 August 2025.

The startup has also been grappling with internal governance issues, after its CFO was accused of siphoning off funds for personal investments and F&O trading in September, leading to an INR 250 Cr write off for Gameskraft.

As a result of the mounting pressure, the startup laid off over 400 employees out the 600 on its payroll, citing organisational restructuring.