Laurence Escalante is set to take full control of Virtual Gaming Worlds (VGW), the company behind Chumba Casino, Luckyland Slots, and Global Poker.
Escalante founded VGW in 2010 and, after opening it to investors in 2016, currently owns 70% of the shares in his sweepstakes casino empire.
The offer to minority shareholders is AU$ 5.05 per share, with options to receive this amount in cash, shares in a new holding company (BidCo), or a combination of both. This puts the company’s value at AU$ 3.2 billion ($2 billion).
The transaction is subject to shareholder approval, but is expected to be finalized by August 2025, pending regulatory and court approvals. A special purpose meeting of directors recommended investors vote in favor of the proposal, four months after an offer of between AU$ 3.3 and AU$ 4 per share was rejected.
Investors backed move into US
The decision to open up to investors in 2016 helped fund the company’s expansion, particularly into the US market. In 2020, the company was estimated to hold 90% of the sweepstakes market in the country, although that has fallen recently to around 50% due to increased competition and regulatory scrutiny.
VGW’s flagship platform, Chumba Casino, boasts over 1 million daily active users. The company reported a record revenue of AU$ 6.1 billion ($4.15 billion) for the FY2024. This marked a net profit of AU$ 492 million ($335 million). The company has seen a rapid rise since entering the American market with revenue back in 2018 only AU$ 379 million.
Escalante frustrated at investors
The burden of reporting financials to investors is one of the reasons the Australian businessman is looking to take back total control of the company. Escalante voiced frustration at investors‘ requests for increased transparency in the company on Telegram recently.
On the topic of reporting more financial figures, Escalante commented, “We share what we choose to share and avoid legal complications and unequal information. Don’t trust us, don’t stay shareholders.”
This followed previous rants on social media at “vindictive selfish b*tches” that “have made incredibly destructive rumours” about his personal life.
VGW exiting US states
The company’s future growth is being challenged by state regulators, and VGW withdrew from New York last month. This followed pulling out of Delaware in April, and the company now no longer operates in 13 states across the US.
Other states have also been making legislation to restrict sweepstakes casinos’ dual-currency model. Montana became the first state to explicitly ban the platforms, while there are active bills in numerous other states.
Escalante hopes that with more control of the company, he can find new innovative ways to grow the company amid increased regulations. The sweepstakes model has worked so far by finding a legal loophole to offer online casino games even in states that have not yet legalized.
The company also formed its own lobby group to campaign for the legality of social and sweepstakes casinos. The Social Gaming Leadership Alliance (SGLA) looks to add pressure to state regulators, which has so far been mainly done by the Social and Promotional Gaming Association (SPGA).
VGW is not signed up to the SPGA, and it is a hallmark of Escalante’s business style to go it alone. The move to set up his own lobby group and take back total control of his company aims to reassert his dominance on the sweepstakes casino industry.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
