VGW Signs Deal with California Tribe, Paving Way for Social Games

The social and sweepstakes landscape is in a state of flux, with New Jersey becoming the latest state to outlaw these types of games.

VGW, a provider of social gaming platforms, has found itself at the receiving end of regulatory hostility and legislative suspicion, but the company has now signed a groundbreaking partnership with the Kletsel Dehe Wintum Nation of the Cortina Rancheria tribe in California.

VGW Breaks Ground in California Through Tribal Gaming Partnership

The partnership, signed on Monday, August 18, allows the Australian gaming company to work with the Kletsel Economic Development Authority or KEDA and offer free-to-play online social games and platforms, including sweepstakes in California.

If anything, this alliance suggests that sweepstakes are not only here to stay, but they have found a viable business model in the face of established local partners. Native American tribes have been among those opposed to social gaming and sweepstakes models, siding with the mainstream gambling industry in their criticism of the sector.

However, this change of tack may now secure a firmer foothold for companies such as VGW, which have come under unprecedented scrutiny from multiple jurisdictions.

Apart from leveraging bans against the activity, several states have been issuing cease-and-desist letters to VGW and others through their gambling regulators. The partnership with the KEDA changes that.

VGW CEO and founder, Laurence Escalante, said this to say: “We’ve operated in North America for more than a decade, creating not only great games, user experiences and entertainment but ensuring this is done safely, responsibly and at the highest level of standards — in line with our core value of ‘we do what’s right.”

Escalante added that there has been a change in business strategy with VGW seeking to engage with the local communities in the places where it operates.

Revisiting Business Model at a Time of Strong Opposition

Escalante used the opportunity of the partnership to also commend KEDA’s decision to oppose AB 831 and assured that VGW was seeking to engage with legislators rather than oppose them.

This partnership comes at a time when California is also considering outlawing sweepstakes games, and it is a strong sign that, together with tribal partners, VGW does not think that the measure would succeed.

KEDA is also of the opinion that this partnership could be beneficial. Digital platforms, argues KEDA CEO Eric Wright, could have a positive impact on tribal community needs, such as healthcare, housing, and education, among others.

“For tribes like ours — far from high-traffic tourism corridors — geography has always limited traditional economic development. Large, well-established gaming tribes already benefit from these geographic advantages and decades of success. It is self-serving for them to advocate for policies that restrict emerging digital commerce opportunities for others, effectively holding smaller and less-advantaged tribes’ hostage to their location,” he argued.