Laurence Escalante has stirred up quite the storm over the past year.
The self-made billionaire is desperate to gain full control of Virtual Gaming Worlds (VGW), the social gaming company behind Chumba Casino, LuckyLand Slots, and Global Poker.
VGW hit the jackpot during COVID-19, with explosive growth throughout North America and several other parts of the world. The company now boasts that its flagship site, Chumba Casino, has “over 1 million players”, serving as the main contributor to VGW’s $6 billion in revenue generated throughout 2024. And with business booming, Escalante has decided he wants complete ownership.
Laurence Escalante Makes $3.2 Billion Bid for Social Gaming Giant VGW
It’s one of the biggest iGaming stories of the year.
Lauren Escalante is looking to buy back 30% of VGW and regain full control of the company.
As it stands, Escalante, one of Australia’s youngest billionaires with a personal fortune of $3.9 billion, only owns 70% of the company that he originally founded. The remaining 30% belongs to minority shareholders, who have shown reluctance to budge on the matter, at least for now. This has led to a frustrated Escalante going on bizarre social media rants and reportedly telling investors in a private Telegram chat to “sell up”.
It was towards the end of 2024 when Escalante’s family office first tried to buy out minority shareholders between $2.26 and $2.58 per share. This offer was, unsurprisingly, rejected and seen as a major undervaluation of the company. Escalante then followed it up with some increased offers only to, once again, have them rejected. This then led to 43-year-old making what he described as his “best and final” offer of $5.05-a-share in June last month, which VGW’s board is reportedly encouraging the minority investors to accept.
Minority Investors Look Set to Accept Escalante’s Offer Following Sweepstakes Doubts
Since that final offer was made, no word has yet got out on whether the investors are going to accept it. However, you would expect them to, especially considering how generous the actual offer put forward by Escalante is. Not to mention, ongoing skepticism surrounding the future of sweepstakes casinos could potentially mean that now is the best time for them to cash out.
Escalante himself has discussed this in a document to investors:
“The regulatory and competitive environment in which our business operates is becoming increasingly uncertain and the risks have markedly increased over the past 24 months.”
“While I remain confident in VGW’s business and believe that BidCo and VGW will be strongly positioned to create and deliver value in the casino-themed social games market, we are also conscious of the risks in the regulatory and competitive environment in which we operate.”
In other words, VGW might not be making as much money as it is now in a couple of years. This is because a growing number of states in the US have started passing bills to ban sweepstakes casinos and other similar gaming sites, with Connecticut and Montana both recently having their bills passed into law. More states could yet follow, including New York, which would be devastating for VGW’s business model, as player counts across its different social gaming platforms would take a major hit.
The reason why there’s such a sudden pushback against sweepstakes casinos is because of the gambling argument. Sites like Chumba Casino are almost identical to real-money online casinos, with the only difference being players bet virtual ‘Sweeps Coins’ instead of cash. Some argue that because these coins can be exchanged for prizes like cryptocurrencies and gift cards, it’s still a form of gambling, which is why so many states have started to crackdown on them.
Billionaire Escalante has, of course, defended his company’s business model. In his eyes, “our platforms are compliant with all relevant laws and regulations, and we take our commitment to responsible gaming very seriously.” However, it’s hard to deny that the likes of Chumba Casino and Global Poker do promote a lesser-form of gambling, albeit a much safer type than the type of gambling you see in traditional online casinos like BetMGM and FanDuel.
Escalante Turns Attention to “Kickr”, Potentially to Spite Investors
With all the drama going on with VGW and Laurence Escalante’s attempted buy-out of investors, Ecalante has added further fuel to the fire by shifting his focus to a new iGaming platform, much to the annoyance of investors.
Known as Kickr, this new site is labelled “your go-to social sports and casino game, proudly serving players across most states in the U.S.” However, despite Escalante founding the company, it’s completely separate to VGW and instead owned by his private family office, Lance East Office.
Investors are said to be frustrated by Escalante’s involvement with Kickr, as they believe it’s a direct competitor to VGW’s existing sites, including Chumba Casino and LuckyLand Slots. In turn, this harms their interests, which is why they’re said to be unhappy with Escalante and his behaviour. The overriding worry is that Escalante is harming VGW’s long-term prosperity, and that he may even use VGW’s resources and talentpool to help boost Kickr during a critical time.
Following Escalante’s recent profanity-laced rant at investors, along with his shift towards focusing on Kickr, it’s not hard to see why investors are displeased. What will happen with Kickr remains to be seen, but it’s one of the fastest growing new iGaming sites on the market and could potentially be the thing that tips investors over the edge to finally sell up.
