VGW Founder Laurence Escalante’s tempestuous relationship with the company’s shareholders has been further strained by the revelation that he has set up a second sweepstakes casino business.
According to reports, shareholders learnt via an investor group chat that Escalante’s family office, Lance East Office, is the holding company of Kickr Games– which offers both social sports betting and casino in the US.
Although small in comparison, aggravated investors believe Kickr acts as a direct competitor of VGW, which is widely acknowledged as the biggest sweepstakes and social games operator in the sector, running brands such as Chumba Casino, Global Poker and LuckyLand Slots.
Kickr was set up in 2023 and is registered in Australia. Todd McKee, formerly an Executive at VGW, is listed as its only director. When questioned, VGW told the Australian Financial Review that it does not view Kickr as a competitor and that it is “completely separate” and has “no impact” on VGW or its operations.
Escalante confirms ‘best and final’ offer
In the background of the revelations is Laurence Escalante’s bid to take the company private in a transaction that values VGW at approximately AUD $3.2bn (£1.5bn).
Last week, Escalante reaffirmed his $5.05-a-share offer, which independent analysts Kroll Australia assessed as “fair and reasonable”, valuing the unlisted company at between $4.53 and $5.63 a share.
He did this despite acknowledging the uncertain future of the sweepstakes industry in the US, as lawmakers and regulators seek to ban the sector via legislation and cease and desist letters against operators.
“The regulatory and competitive environment in which our business operates is becoming increasingly uncertain, and the risks have markedly increased over the past 24 months,” Escalante told investors.
“While I remain confident in VGW’s business and believe that BidCo and VGW will be strongly positioned to create and deliver value in the casino-themed social games market, we are also conscious of the risks in the regulatory and competitive environment in which we operate.”
Escalante has previously landed in hot water, with sections of VGW’s 30% minority shareholding due to questions over the transparency of the company’s financial reporting.
Disruptions were largely fuelled by the decision of the firm to move to an annual reporting model, rather than a biannual reporting model, last year.
He further heightened tensions in May, as he launched into an angry rant on the social media site Telegram, telling investors to sell their shares if they didn’t trust VGW’s practices.
Over the past four years, VGW has returned over AUD $1.3bn to its shareholders, with the majority heading to Escalante. He will receive a further AUD $200m from the AUD $286m of interim and special dividends set to be paid for the 2025 financial year.
Voting will now take place on 30 July to decide if shareholders accept the scheme.
