Amidst the shaky and uncertain future of the sweepstakes casino industry in the US market, some shareholders are looking upon a takeover of Virtual Gaming World (VGW) by CEO Laurence Escalante as a blessing.
Escalante made a $2.08 billion takeover bid for the company at the company's recent shareholders meeting. Voting by proxy, attorney, or corporate representative, minority shareholders voted 91.31% in favor of accepting Escalante's bid.
The sale proposal remains subject to approval by the Federal Court of Australia (sitting in Western Australia) at a hearing scheduled for August 5, 2025. If court approval is granted, the sale will become official on August 20.
"Shareholders have approved the proposed acquisition by Ocean BidCo Limited (“BidCo”) (an unlisted special purpose company established by Lance East Office (“LEO”), the family office of VGW Founder and CEO, Mr Laurence Escalante) of all of the issued shares in VGW by way of a scheme of arrangement at the VGW shareholder meetings," the company announced in a press release.
Some shareholders felt the stock purchase price was undervalued. Escalante countered that it was higher than projected earnings per share for the company.
The Australian billionaire already owned 70 per cent of VGW. He is acquiring the remaining 30% of the company for $3.28 per share through his family office, Lance East Office. He intends to take the public company private.
Escalante plans to incorporate VGW in Guernsey, a well-known offshore tax haven. The company's offices will remain in Perth, Australia.
According to reports from the Australian Financial Review, the Australian billionaire had grown weary of having to answer to minority shareholders. The report alleged that Escalante launched into an obscenity-laced tirade earlier this year during a private Telegram group chat with shareholders. His message was simply that they should either trust his business acumen or sell their shares and get out of the business.
The largest company in the social and sweepstakes casino industry, VGW, reported a record $4.2 billion in revenue before prize payouts for the fiscal year 2024. The company targets the majority of its business toward the lucrative US market.
VGW operates Chumba Casino, the No. 1 social casino in the US market, which garnered revenue of $2.9 billion in 2024. Under the company's umbrella is another social/sweepstakes casino site, Luckyland Slots, as well as the world's largest online sweepstakes poker site, Global Poker, which generated more than $203 million in earnings in 2024.
Sweepstakes casinos and poker rooms operate similarly to real-money online casinos. Users can play the same type of games as one would at a real-money site, with only one significant difference - they play and win with virtual currency, not real cash. However, when playing the Sweepstakes version of these games, virtual coins may later be exchanged for actual sums of cash.
It's that latter scenario that is causing an issue in the US market. State gambling regulators are successfully arguing that sweepstakes casinos are a form of gambling and therefore should be subject to the same regulations and taxation rates as real-money casinos.
New Jersey was the most recent state to pass a law banning sweepstakes casino games. In recent months, VGW has shut down all of its sweepstakes casino operations in Michigan, Maryland, and New York.
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