Making profit in a business may also become part of a criminal investigation. But how does ordinary company income get categorised as “proceeds of crime”?
Gameskraft Technologies, an Indian online gaming company behind the game, rummy, platforms such as RummyCulture, is at the centre of a notable money-laundering case in India.
The Enforcement Directorate (ED), India’s federal agency conducts investigation in money-laundering offences under the Prevention of Money Laundering Act, 2002 (PMLA), states that around 3 crore or approximately 30 million people played on Gameskraft’s platforms.
The ED has charged three of the company’s founders under the PMLA. It is alleged that ₹19,984 crore, approximately ₹199.84 billion, of the company’s income constituted “proceeds of crime”.
That raises the obvious question:
How can company income be categorised as “proceeds of crime”?
To understand this, we first need to understand what India’s money-laundering law provides for. The process of money laundering does not occur in isolation. There must be an underlying criminal activity relating to an offence listed under the PMLA. This is referred to as the scheduled offence.
Cheating is one such scheduled offence.
In this case, police in the southern Indian state of Telangana registered First Information Reports (FIRs), the formal initiating point of a police investigation in India, alleging cheating in connection with the said gaming platform.
The ED alleges that the platform encouraged repeated wagering by the players. ED’s argument is essentially that the commission Gameskraft earned from players was generated through activity connected with the alleged cheating. According to the ED, from the financial year 2017-18 until August 2025, this amounted to ₹19,984 crore.
This is where the definition becomes important.
Making a profit is not, by itself, a crime.
However, what appears in a company’s accounts as legitimate revenue or income may potentially be treated as “proceeds of crime” under the PMLA if authorities establish the required legal connection between that income and criminal activity relating to a scheduled offence.
And here is the point that is usually missed.
Money-laundering cases depend upon the underlying criminal offence.
The Supreme Court of India held in 2022 that where the person concerned is finally discharged or acquitted of the scheduled offence, or the criminal proceedings are quashed, there can be no offence of money laundering in relation to the property linked solely to that scheduled offence.
Thus, the ED’s ₹19,984 crore figure is only as strong as the alleged criminal activity underlying it.
There is yet another important distinction.
In June, the Karnataka High Court ordered the release of the founders after finding fault with compliance with respect to safeguards governing their arrest. However, that did not amount to a final determination of whether the substantive allegations against them were true.
An order concerning the legality of an arrest and a judgment determining criminal culpability are two different things.
The Gameskraft proceedings therefore illustrate an important principle for businesses, directors and legal advisers, not only in India but also for international companies dealing with Indian operations. When reading about a multi-billion-rupee money-laundering case, do not begin with the size of the alleged proceeds.
Begin with one question: What is the underlying crime?
Because under the PMLA, that is where the money-laundering begins.
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