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Read Full BioLaurence Escalante, the Australian billionaire founder and CEO of Virtual Gaming Worlds (VGW), is facing heated backlash after his public tirade directed toward investors questioning the firm’s corporate transparency.
AFR report that Escalante rebuffed his critics in an expletive-laden post on Telegram, insisting they “sell their stakes” if they didn’t trust his leadership.
VGW operates several popular sweepstakes platforms, including Chumba Casino, LuckyLand Slots, and Global Poker. It is best known for having secured a foothold in the lucrative US and Australian markets.
Operational in several US states, the free-to-play platforms currently skirt perceived iGaming laws by allowing users to purchase in-game currency to enter sweepstakes to win real-money prizes.
Notably, despite the growing regulatory scrutiny, which has seen other sweepstake operators like Stake go to court, the sweepstake model remains popular with millions of users.
VGW CEO Defends Secrecy Citing Corporations Act Compliance
Beyond the acceptance of product offerings among its user base, investor dissent has been fueled by VGW’s recent questionable business practices. At the forefront appears to be its shift from a biannual reporting schedule to an annual reporting format.
In addition, the lack of a unified investor hub has begun to make shareholders uneasy, with analysts saying it prevents genuine insight into the company’s finances and operations.
Arguing that cynics lack a proper understanding of the operational complexities involved, Escalante chooses to escalate tensions further by publicly calling out financial commentator Ricky Saini, telling him to “shut the f*** up.”
Escalante later stated that it was impossible to fully disclose some aspects of the business’s operation, declaring that it was necessary to comply with its legal obligations under the Corporations Act.
Regulatory Pressure Mounting on Both Sides of the Pacific
However, VGW’s issues extend beyond its problematic investor relations. As with Stake and others, the company is facing growing regulatory pressures in the US and Australia related to the sweepstakes operational model.
Perhaps VGW’s most likely imminent threat comes from the regulatory opposition it faces in the US.
The pressure stems from state-level regulators, tribal casinos, and licensed operators’ opposition to sweepstakes gaming models exploiting the supposed legal gray area. They claim platforms operated by VGW can do so without the same degree of regulatory oversight as licensed gambling operators require.
Consequently, following cease-and-desist orders, VGW has already had to withdraw from US state markets in Connecticut, Idaho, Michigan, Montana, Nevada, and Washington.
Meanwhile, the Australian Taxation Office is also applying pressure on Escalante, having just launched a review of VGW’s domestic Australian operations. Of the concerns the Australian Taxation Office raised, the company’s tax compliance is at the forefront of their interest in VGW.
Profitability Despite Growing Regulatory Pressure
Despite the growing regulatory obstacles and tax investigations, VGW consistently posts profits due to the firm’s gaming portfolio remaining hugely popular among online players in both countries.
For some investors, Escalante’s defiant tone will appeal to investors as it mirrors that of the Kalshi CEO, who recently scored a victory over the US Commodity Futures Trading Commission (CFTC). However, Escalante’s no-holes-barred approach alienates some VGW shareholders demanding greater board-level accountability.
