At a time when many sweepstakes casino operators are wondering if they have a future in the US market, Virtual Gaming Worlds (VGW) is planning to dive into the US with both feet.
The Australian-owned company announced that it is ceasing all of its sweepstakes casino operations in Canada. VGW is devoting its entire North American focus to the US market.
VGW operates sweepstakes casino sites Chumba Casino and Luckyland Slots. The sweepstakes poker site Global Poker is also a VGW property.
"After careful consideration, we've made a strategic commercial decision guided by our business priorities," VGW said in a statement sent to Chumba Casino customers in Canada. "This allows us to focus our resources and investment in a way that supports the ongoing success of the business.
"This decision wasn't taken lightly, and our focus is on ensuring players are fully informed about the changes and that this transition is as smooth as possible."
As of August 28, Canadian customers will no longer be able to purchase packages of Gold Coins on any VGW site. The ability to play games on any VGW site in Canada will be halted on September 25. Players will still be able to redeem Sweepstakes Coins for prizes after this date, though. Finally, on October 23, Canadian players will no longer be able to access any VGW site.
The timing of this decision does seem a bit odd. The sweepstakes casino industry finds itself under fire in the US market. A number of state governments have recently banned these operations, including major players in the gambling industry such as New Jersey and New York. California's state assembly is presently considering a bill that would outlaw sweepstakes casinos in the state.
VGW recently ceased operations in both New York and New Jersey. Other states in which the company doesn't offer its services include Connecticut, Delaware, Idaho, Louisiana, Michigan, Mississippi, Montana, Nevada, and Washington.
The company is also facing a class-action suit filed in US District Court in California. Along with California, the suit also claims to represent VGW users from Georgia, Illinois, Kentucky, Massachusetts, Mississippi, Missouri, New Jersey, New Mexico, Ohio, South Carolina, Tennessee, Wisconsin, and the District of Columbia.
The suit was filed on behalf of spouses who share bank accounts with VGW customers. It claims that they never agreed to VGW's terms and conditions.
Payment processors Yodlee and Trustly, ID verification vendor Jumio, and slots influencer Brian Christopher, all partners of VGW, are also named in the suit. None of the claims has been proven in court.
The planned exit from Canada is just the latest change in the business landscape for VGW. The company recently entered into an agreement with the Kletsel Dehe Wintun Nation of the Cortina Rancheria tribe. This partnership will see the two entities partner to offer social and sweepstakes casino platforms in California. California's tribes control all land-based casino operations in the state.
Company founder and CEO Laurence Escalante recently completed a successful $2.08 billion takeover of the company. He purchased the 30% of VGW stock he didn't already own and is taking the company private.
Escalante is also planning to incorporate VGW in Guernsey. This self-governing British Crown dependency, an island in the English Channel, is a well-known offshore tax haven. Moving there should aid VGW's tax burden and in dealing with any future regulatory issues.
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