HYDERABAD: An Rs 13,000 crore illegal online gaming network allegedly operating through shell firms, fake digital identities and compromised payment rails has been busted, with the arrest of fintech entrepreneur Pankaj Kumar in Hyderabad, officials said Thursday.
Kumar, founder of Adsum Advisory Services Private Ltd, was taken into custody by the Directorate General of GST Intelligence Wednesday evening and remanded in judicial custody a day later.
Investigators alleged his firm functioned as a critical gatekeeper, clearing fraudulent KYC verifications that allowed shell entities to access banking channels regulated by RBI, enabling large-scale movement of funds linked to real-money gaming platforms.
DGGI sources said Adsum Advisory provided third-party fraud detection and customer verification services, including digital KYC, and allegedly facilitated onboarding of shell companies for UPI integration. Those accounts were then used to route proceeds from illegal gaming sites, investigators alleged, adding that proper merchant risk profiling was bypassed in exchange for syndicate-linked proceeds.
The probe has widened into a broader crackdown on online gaming networks and associated financial intermediaries. India's online gaming sector is estimated at about $23 billion, or roughly Rs 2 lakh crore, in 2025, officials said.
About Rs 100 crore in bank accounts has been frozen and multiple suspects arrested, officials said.
The case began after DGGI received inputs on online platforms offering real-money gaming around Hyderabad. Investigators zeroed in on two websites — funinmatch360.com and racejeet247.com — and tracked fund flows outward. As scrutiny expanded, officials said they uncovered an organised syndicate running illegal gaming websites with alleged support from fintech players, including payment aggregators, gateways and technology service providers.
Payment aggregators typically rely on third-party verifiers for merchant onboarding and KYC compliance. In this case, investigators alleged shell firms paid verifiers to clear onboarding without adequate scrutiny. Around 100 shell entities across the country were identified. Many allegedly filed GST returns reflecting minimal revenue while processing outsized transactions.
Officials also flagged alleged misuse of banks' payout APIs (application programming interface) by technology providers posing as fintech firms. Designed for bulk automated transfers, such systems can process payments without OTPs or manual checks when accessed by authorised clients, allowing rapid movement of funds, investigators said.
Sudhakar Reddy Udumula is the Editor (Investigation) at the Times...
Read MoreSudhakar Reddy Udumula is the Editor (Investigation) at the Times of India, Hyderabad. Following the trail of migration and drought across the rustic landscape of Andhra Pradesh and Telangana, Sudhakar reported extensively on government apathy, divisive politics, systemic gender discrimination, agrarian crisis and the will to survive great odds. His curiosity for peeking behind the curtain triumphed over the criminal agenda of many scamsters in the highest political and corporate circles, making way for breaking stories such as Panama Papers Scam, Telgi Stamp Paper Scam, and many others. His versatility in reporting extended to red corridors of left-wing extremism where the lives of security forces and the locals in Maoist-affected areas were key points of investigation. His knack for detail provided crucial evidence of involvement from overseas in terrorist bombings in Hyderabad.
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