Laurence Escalante, the founder of the prominent sweepstakes casino company Virtual Gaming Worlds (VGW), is aiming to acquire the remaining 30% stake in the business that he does not already own. This potential buyout would grant him complete control of the Australia-based firm, which launched Chumba Casino in 2012, marking the inception of the US sweepstakes casino sector. The announcement comes during a challenging period for the sweepstakes industry, with various states proposing legislation to outlaw sweepstakes casinos. Recent developments include a bill signed into law in Montana and similar proposals emerging in Nevada, Connecticut, and Louisiana.
Despite the difficulties surrounding the industry, VGW continues to show strong financial performance. Escalante’s sweepstakes brands—Chumba Casino, Luckyland Slots, and Global Poker—have collectively generated revenues of approximately $6.13 billion and profits of $491.6 million for the fiscal year ending June 2024. However, Escalante’s market hold has weakened since VGW’s initial success, facing stiff competition from numerous new operators who are innovating at a rapid pace. The proposed acquisition values VGW at around $3.2 billion, with Escalante reportedly offering shareholders $5.05 per share.
However, this proposal has raised concerns due to plans for relocating the company offshore to Guernsey and using a Special Purpose Vehicle (SPV) to maintain operational control while providing shareholders continued dividends. Escalante appears to be repositioning VGW in response to the tightening legislative landscape, aiming to secure greater flexibility in managing the company. Recent actions, such as withdrawing from promotional activities in New York and raising the minimum playing age to 21, suggest a proactive approach. Additionally, Escalante has formed the Social Games Leadership Association (SGLA) to foster a more favorable image for the sweepstakes sector amidst increasing legislative scrutiny.
As tensions rise among investors, the future remains uncertain, but Escalante’s leadership will likely continue to influence the direction of the industry.