Laurence Escalante, founder of VGW, plans to take full control of the global gambling powerhouse. The news comes following a period of internal unrest and regulatory uncertainty for the company.
Key Takeaways
- VGW founder Laurence Escalante is planning to take full control of company.
- News follows Telegram encouraging shareholders to sell up if they didn’t agree with company direction.
- VGW currently faces regulatory uncertainty in several U.S. states.
Laurence Escalante, the gaming and technology entrepreneur who built Virtual Gaming Worlds (VGW), is planning to take back full control of the company, according to the Financial Review.
Escalante built Virtual Gaming Worlds from humble basement beginnings into the multibillion-dollar business it is today. It now operates brands like Chumba Casino, Luckyland Slots, and Global Poker, with revenue in the region of $5 billion.
The founder currently holds a 70% stake in the company. The planned buyout of minority shareholders, which values VGW at roughly $3.2 billion, would put Escalante in control of one of the world’s biggest sweepstakes operators.
Proposed buyout comes following period of regulatory uncertainty
VGW has come under fire recently, facing issues with regulation in some U.S. states. It operates in a bit of a grey area in the U.S., in that it’s currently able to offer casino-style experiences without being classed as a gambling operator. That means it’s exempt from many of the rules and regulations placed on traditional operators, as well as the resultant tax and compliance liabilities.
The company’s critics argue that it is in fact a gambling operator, and should be treated as such. But those in support of VGW maintain that it operates well within existing laws and regulatory frameworks.
In Montana, legal action is being taken against sweepstakes casinos like those operated by VGW. Several other states are expected to follow, with many already preparing legislation that could put a stop to legal sweepstakes operating within state boundaries.
VGW has responded by scaling back in some areas. The company recently announced its departure from New York, as a result of uncertainty there.
VGW leadership under fire as internal unrest spills out into public domain
It’s not just the legal controversy that has plagued VGW in recent months. There have also been widespread reports of unrest within the company itself, with several disputes becoming public knowledge as Escalante and others voiced their frustration on social media.
Escalante recently took to Telegram to address dissatisfaction amongst investors. In the message, Escalante told investors to sell if they didn’t have full trust in the company’s leadership.
In defence of VGW’s perceived opacity in recent months, Escalante said “there’s a reason we do what we do.” He went on to argue that the company couldn’t provide further clarification, because of the legal constraints placed on it by the Corporations Act.
This isn’t the first time that Escalante has taken to social media to address complaints. In April, the VGW founder took to his Instagram account to complain about “destructive rumors” that had started to circulate about his personal life.
Escalante wants full control, but what would that mean for the industry?
If it goes ahead, Escalante’s buyout would enable him to implement strategic changes without any pushback at all.
In theory, it would simplify boardroom decision-making, but concerns are already being raised about the level of control that this would give to a single person and what that might mean for the industry.
A deal is yet to be confirmed.
