Written by :
Published on :
Laurence Escalante wants full control over Chumba Casino parent company, Virtual Gaming Worlds.
Escalante already controls 70 percent of Virtual Gaming Worlds, which also owns Global Poker and Lucky Land. He founded the company and helped to build a sweepstakes casino power house now valued at $3.2 billion.
Chumba Casino's website, chumbacasino.com, received approximately 15.3 million visits in April 2025, with 96.9% of this traffic originating from the United States. Sites like Chumba exploit a loophole whereby players can obtain Sweeps Coins (or similar premium currency) without making a purchase, whereas real money online casinos require an immediate deposit in most cases and/or the player must bet with real money or digital currencies.
From Financial Review:
While Virtual Gaming Worlds has grown significantly, it faces regulatory issues in the US, where some states are moving to introduce new rules against its business, and investor disquiet about its transparency.
The Australian Financial Review reported last month that, in an expletive-ridden rant, Escalante told investors they should sell their shares if they did not trust him after criticism that he was moving too slowly to share more financial information with shareholders. Escalante, in a private Telegram chat group for investors, accused some shareholders of “talking shit” about him, telling them to “shut the f--- up” and “get off my register”.
On Monday, Virtual Gaming Worlds said Escalante’s family office, known as Lance East Office, had offered $5.05 a share to acquire the remaining shares in the company through a special purpose company set up for the transaction, less any dividends paid. That was, the company said in a statement, about three times its earnings in the last financial year.
Shareholders will also have an option to continue their investment by receiving shares in Escalante’s special-purpose company. The deal, which the board is recommending shareholders accept, will need to be approved by shareholders, not including Escalante and his associated entities.
Escalante had made an initial offer of $3.50 to $4 back in November. This was roundly rejected by the company's independent board. A new $5.05 offer was put on the table.
Mike Symons, the co-founder of specialist corporate advisory Canterbury Partners, claims that Virtual Gaming Worlds has been facing serious regulatory headwinds.
This has contributed to weaker earnings expectations in the second half of the financial year, forecast to be 10 per cent to 15 per cent softer than the first half. The company recorded a 27 per cent increase in revenue, to $6.13 billion, in the 12 months to June 30. Profits over that time rose from $377.6 million to $491.6 million.
Symons said these issues were accounted for in the valuation. “The most important for us is what the [discounted cash flow] looks like ... we ran models looking forward and then discounted which states we thought might be at risk, and we weighed every state in the US according to ... the probability of those states being able to continue,” he said.
Among the biggest hits in recent months, Virtual Games and Chumba Casino began phasing out its sweepstakes operations in New York, with a complete shutdown expected by August after state lawmakers advanced legislation to prohibit online sweepstakes casinos that operate using a "dual-currency" model.
Last week, Montana become the most recent state to ban sweepstakes casinos. Governor Greg Gianforte signed Senate Bill 555 into law, making Montana the first U.S. state to explicitly outlaw online sweepstakes casinos.
The Social and Promotional Games Association condemned the new law.
“Montana just criminalized everyday digital promotions with a law so broadly written it fails to name what it bans,” said a spokesperson for SPGA. “It’s a dangerous precedent that could undermine consumer trust, business innovation, and long-standing legal marketing practices.”
|
|
