Escalante Seeks Full Control of $3.2B VGW Empire

Founder and chief executive officer of Virtual Gaming Worlds (VGW), Laurence Escalante, is making a bold move to tighten his grip on the sweepstakes giant. 

Escalante is offering to buy out minority shareholders in a deal that would increase the online gambling giant’s value to $3.2 billion. 

Escalante to Take Full Control

The proposal, made through his family office, Lance East Office, would see Escalante take full control of the company he launched and still holds a 70% stake in.

VGW built its massive user base by capitalizing on a regulatory workaround in the United States, enabling it to offer casino-style games such as slots and poker online. 

Starting out on Facebook, VGW currently operates popular platforms including Chumba Casino, Luckyland Slots, and Global Poker. They are all known for having successfully carved out market share from legacy gambling companies.

However, the company’s explosive growth has also drawn increased scrutiny. Several U.S. states are exploring stricter rules targeting the sweepstakes gambling model VGW uses. 

Meanwhile, concerns regarding the financial transparency of the company have caused frustration among some investors.

Escalante to Shareholders in Alleged Chat: “Get Off My Register” 

Last month, The Australian Financial Review revealed that Escalante lashed out at shareholders during a Telegram chat, responding to calls for more financial disclosure with a profanity-filled tirade. 

“Shut the f— up” and “get off my register,” he reportedly told them, adding that those who didn’t trust him should simply sell.

Now, Escalante is offering $5.05 per share, adjusted for dividends paid, to the remaining shareholders. Those who don’t want to cash out can opt to roll their stake into the new holding entity. 

The offer must be approved by non-Escalante shareholders.

Symons: “It’s Not a Fake Process”

Mike Symons, co-founder of Canterbury Partners and now an independent board member, is leading the review of the deal alongside long-serving executive Mats Johnson. 

The duo initially rejected an earlier offer of $3.50–$4.00 per share, but currently support the revised proposal. “It’s absolutely a real process … it has been a very thorough process, it’s not a fake process,” Symons said.

He also noted the valuation was based on a comparison to social-gaming peers like Nasdaq-listed Playtika, though he acknowledged VGW’s unique position. 

He also emphasized that U.S. regulatory risks, like VGW’s impending exit from New York, were factored into the financial models. Despite those headwinds, VGW posted a 27% jump in annual revenue to $6.13 billion and lifted profit to $491.6 million. Escalante’s personal net worth now stands at $4.5 billion, up 20% over the past year.