Sweepstakes Casino Majority Owner Pushing For Complete Control

Amid turbulence in the sweepstakes casino space in the United States, Virtual Gaming Worlds (VGW) owner Laurence Escalante is pushing to acquire the outstanding 30% of his company and take 100% control. 

VGW owns and operates three of the biggest sweepstakes casinos on the market today: Chumba Casino, Luckyland Slots, and Global Poker. 

Some of that turbulence includes the recent Montana bill, SB555, which effectively bans sweepstakes casinos as of October 1. There's also three states with other legislation—Connecticut, Nevada, and Louisiana—that'll ban them, too, assuming each state's governor signs off. 

Despite Sweepstakes Casino Landscape, VGW Remains Profitable

For the most recent fiscal year ending in June 2024, VGW reported $6.13 billion in revenue and $491.6 million in profit. 

While there's a lot more competition now than when VGW began in 2012, sites like Chumba Casino are a mainstay in the space. 

With this proposed deal, which includes purchasing shares at $5.05 AUD each, the company's valuation is approximately $3.2 billion. 

This move does come with some scrutiny, however. 

Should Escalante take 100% ownership, the company would be moved offshore to Guernsey, the second-largest island in the Channel Islands. The buyout would also be handled via a "Special Purpose Vehicle." Basically, an SPV is a shell company Escalante controls. This option would allow shareholders to continue receiving dividends, but the control of the company would be given to Escalante. 

Financing the buyout would consist of outside lenders and a loan from VGW itself. In essence, VGW's own assets would be used to give Escalante complete control. 

Escalante's motivation is that, with the changes happening rapidly in the United States, Escalante can react more quickly with complete ownership. 

VGW Has Made Moves to Conform

With everything happening in the United States, VGW has made some moves to, hopefully, strengthen its case and find a path to continued operation. 

It's in the process of pulling out of New York, a state in which Attorney General Letitia James recently sent out cease and desist letters to 26 sweepstakes casinos demanding they halt the "sweepstakes" portion of their business model.

VGW has also raised its minimum age to play from 18 to 21. Three other sweepstakes casinos did something similar, too: TaoFortune, NoLimitCoins, and Fortune Wheelz. 

Escalante also founded the Social Games Leadership Association (SGLA) to work with other major sweepstakes brands to essentially lobby for sweepstakes casinos by attempting to rebrand the scene in a more positive way and hopefully influence lawmakers who may be more open to regulation as opposed to an outright ban. 

It's unclear if these moves will have an impact, though. 

As mentioned, legislation is coming from all over the country, and in Connecticut, the state recently reached a $1.5 million settlement with High 5 Games.

Escalante has played a pivotal role in the popularization of sweepstakes casinos: Will this move prove to be worthwhile, or will it become moot? 

Only time will tell.