Virtual Gaming Worlds Set to Exit Delaware as Pressure Mounts

The Delaware Lottery has now reportedly asked Virtual Gaming Worlds (VGW), an operator of sweepstakes businesses, to withdraw from the state. The company is known for such popular brands as Luckyland, Global Poker, and Chumba Casino, all of which used the sweepstakes model to continue doing business without seeking an official gambling license.

Virtual Gaming Worlds Hits a Snag in Delaware

Since 2023, however, the model has come under assault with the state of Michigan ousting both VGW and a handful of other operators, deeming their business to not fully match state gambling laws. VGW has vehemently denied that sweepstakes are indeed a form of gambling, but opposition has been mounting.

The company has come under serious pressure over the past years, losing significant market share from its all-time peak in 2020, when VGW was estimated to hold around 90% of the sweepstakes market. Now, the company has seen this reduced to 50%.

However, it’s not just increased scrutiny that has hurt the company – incoming competition is also partially to blame, although all companies will now operate in a new environment characterized by mistrust and at least partial hostility.

VGW has been taking similar hits in Idaho and Washington, and it’s facing pressure from Georgia where a state resident filed a class-action lawsuit and is alleging that the company is indeed running a sort of illegal gambling products.

Sweepstakes have been generally considered to be exempt from existing gambling laws and operated on a steadfast foothold. The business never tried to pass for anything but ordinary operators that do not accept “real money,” and that could be played with a mock-up currency.

Sweepstakes Don’t Let You Win Real Money – Almost

However, many are now taking issue with the fact that the company allows you to spend real money to buy in-game currency, which you then gamble on products. The argument sweepstakes companies have mounted is that since you cannot win real money, but the fact is you can.

Many of these platforms offer some ways to enter contests and win real cash. Although there is a mismatch between how much you stake and how much you win, the model is suggestive of traditional gambling with a few extra steps according to most observers who have started taking issue with the sector.

In the meantime, despite the increased scrutiny, players are expected to spend around $8.5 billion on sweepstakes in 2024, making it a significant market. This renewed zeal may cost VGW further regarding both market share and operational results.