Laurence Escalante is really, really tired of all of his critics. In fact, the Australian billionaire is willing to put up about $1 billion US to buy out the minority shareholders in VGW Holdings, the parent company of Chumba Casino, LuckyLand Slots, and Global Poker, just to dial down the discord a bit.
And with more than a dozen states having taken aim at the company’s controversial casino model just this legislative session alone, and VGW voluntarily pulling out of some of the others, including New York, just last month, the situation in the boardroom is unlikely to simmer down any time soon.
Which, Escalante reasons, is all the more reason to take the company private. With all of the decisions in his hands, he can more quickly maneuver the company through potential legal minefields. With 70% already in his control, Escalante questions the value of dragging dissenting shareholders along for the ride
Accordingly, his Lance East office has made an offer to buy back remaining shares at $3 US. He had made a lower offer in January of this year to buy back the remaining shares for around $2.40 US. That offer was ultimately rejected by his independent board committee, led by Mike Symmons, as being too low.
It is believed that the latest offer was made after months of negotiation on the price, which brought it to a level where the committee thought it was in the best interest of all shareholders.
The company did almost $4 billion US in revenues last year, an increase of 27%. The latest offer is reportedly valued at 3 times EBITDA plus cash on hand.
The last few years have been extremely hard on sweepstakes casinos in general and VGW in particular. As one of the first companies to adopt the sweeps casino model, the company had a significant first-mover advantage and, as late as 2020, held an estimated 90% of the market share.
But the appearance of dozens of like minded competitors at the same time as states really began to push back against their dual currency sweeps model meant not only declining market share but also a rapidly dwindling market as more and more attorneys general and gaming commissions began to file cease and desist and other lawsuits to force the sweeps casinos’ hands.
That has meant exiting not only New York but also Connecticut, Washington, Delaware, Nevada, Idaho, Michigan, and Montana. New Jersey, Maryland, and Pennsylvania will almost all certainly be next.
Maryland, in particular, had filed a cease-and-desist order that VGW is currently fighting in court. And Louisiana may yet pass its anti-sweeps bill, now that these distinguished legislators have made chemtrails illegal.
The company has also seen market share drop precipitously from that 90% mentioned earlier to an estimated 50% just five short years later, and despite hiring pitchmen like Michael Phelps, DJ Khaled, and Ryan Seacrest, the general consensus is that market share will continue to decline as more and more sweeps and social casinos move into the space.
All of this has prompted VGW to warn that earnings may decline in the 10 to 15% range in the second half of 2025, as the company is forced out of many lucrative markets and has to spend more on attempting to maintain its customer base. There is no word yet on what the company thinks 2026 will look like just yet.
While it’s true that Escalante has faced vocal criticism, including from his own board, about not only the company’s future prospects but also corporate governance issues and outsized spending on things like sponsoring the Ferrari Formula 1 team, $1 billion buying up the rest of a company that seems to be in serious legal trouble seems like an awfully big risk just to get people to “stop talking crap,” as he recently stated on his Telegram chat.
But the former auditor and Hungry Jack’s Burger flipper came from nothing by betting big, and it’s unlikely that he will back down now. Whether this billion-dollar buyout proves brilliant or reckless, he’s moved all in.
