Escalante to Complete VGW Ownership as Shareholders Approve $2.1B Takeover

Laurence Escalante, founder of sweepstakes powerhouse Virtual Gaming Worlds (VGW), has inched closer to acquiring the entirety of the company as shareholders have approved his latest offer. With this, the company prepares to go private.

Shareholders Gave the Thumbs Up to Escalante’s Latest Proposal

VGW, which runs Chumba Casino, Global Poker, and Luckyland Slots, has cemented itself as a well-known sweepstakes company in the US despite recent pushback against the sweeps sector. As VGW continued to grow, Australian billionaire Laurence Escalante expressed interest in acquiring the remainder of the company.

In June, Escalante took a step to gain full ownership of VGW. After the failure of his earlier proposals, the company’s founder, CEO, and majority owner returned with a final proposal, putting AUD 3.2 billion (approximately $2.1 billion) on the table.  

On August 1, minority shareholders gave the green light to this latest proposal, likely to Escalante’s relief as the CEO had reportedly grown tired of negotiating the future of the company with shareholders. Earlier reports had highlighted quarrels between the founder and shareholders who mistrusted the direction of the company. Back then, Escalante had reportedly urged naysayers to sell their stakes in the company.

In any case, VGW is now set to go private with approval from 91% of the company’s minority shareholders. For context, the deal required approval from at least 75% of the minority stakeholders to pass.

If the deal proceeds, Escalante will finalize his ownership of VGW on August 20. After that, he is reportedly considering basing the business in Guernsey while keeping the HQ in Australia.

VGW Faces Regulatory Headwinds

In the meantime, VGW continues to face pressures to cease its sweepstakes offering in the US. The rapid growth of the vertical has attracted regulatory ire in quite a few states, resulting in regulators issuing cease-and-desist orders against VGW and other companies.

Tribal operators haven’t been thrilled about the growing competition from the sweepstakes sector either. Overall, critics have slammed sweepstakes operators as illegal operators that exploit legal loopholes to offer online gaming without a license.

In mid-July, VGW updated its terms of service to reflect a new tax policy on Gold Coins, the in-game virtual currency used across its platforms. The change was prompted by increased regulatory and legal pressures.

At the end of the month, VGW opted to halt its Sweeps Coins offering in Mississippi and New Jersey. Players who still have Sweeps Coins in their balances have until September 4 to redeem them.