According to the Australian Financial Review, shareholders have been frustrated with the founder’s divided focus and potential conflict of interest. They claim Kickr could undermine the value and future of VGW, which Escalante wants to take private by purchasing the 30% of the company he doesn’t already own.

Kickr Games was founded in 2023 as a social sportsbook. However, it has also evolved into a sweepstakes casino. That means it operates in the same sector as VGW’s brands, which include Chumba Casino, LuckyLand Slots, and Global Poker.

Importantly, VGW does not own Kickr Games. Instead, Lance East Office, Escalante’s family office, owns the platform.

Through this entity, the VGW founder is seeking to acquire the remaining shares of the company. He has proposed A$5.05 per share ($3.29) in cash payout, shares in Ocean BidCo (a special purpose vehicle), or a combination of the two.

The bid represents an improvement from the initial one made in November 2024, when Escalante offered A$3.50 ($2.28) to A$4.00 ($2.58) per share.

Shareholders will discuss Escalante’s offer on August 1. If they agree, the sale will be completed by September 15.

Conflict of Interest Fears

Minority shareholders have expressed fears that Kickr creates a serious conflict of interest. The worry is that Escalante could siphon VGW resources and talent to Kickr during a critical time.

The timing of Kickr entering the sweepstakes casino space, launching as the founder is pushing to gain complete control of VGW, has raised suspicions that the proposed takeover price undervalues the company.

Additionally, as VGW faces growing regulatory challenges and exits from key US states, shareholders worry that Escalante’s divided attention could weaken the company’s growth and its effectiveness in navigating these headwinds.

Investors also fear that future strategic decisions may prioritize Escalante’s private interests, potentially sidelining minority stakeholders and capturing future value growth outside of VGW.

VGW has rejected these concerns. In a statement to the Financial Review, the company said:

“This is a business … that is completely separate from VGW, which has had no involvement with it whatsoever. It has no impact on VGW or its operations, and VGW does not view it as a competitor.”

Escalante’s History of Shareholder Tensions

The friction between Escalante and shareholders is nothing new. As the CEO and majority shareholder, Escalante has maintained control of the company; however, he has often clashed with investors.

That includes his profanity-laced tirade at investors a few months ago, where he told them to sell their shares if they did not trust his leadership.

The most common argument of minority shareholders is that the company is undervalued, and they have pushed for higher valuations and more liquid options. These concerns are surfacing again, with fears of competition from Kickr.

Other shareholder gripes include VGW’s response to US regulatory pressures, as well as a lack of transparency in corporate governance.

Escalante’s push to take VGW private could resolve some of the tensions. The latest offer is significantly higher than the initial one, addressing the concerns about undervaluation.

Can Privatization Shield VGW’s Growth?

Escalante argues that taking the company private will help VGW navigate through regulatory scrutiny and continue its growth.

VGW has enjoyed steady revenue and profit increases over the past few years. For its 2024 Fiscal Year ending on June 30, 2024, the company reported A$6.1 billion ($4 billion) in revenue, a 27% year-over-year growth. The net profit in 2024 was A$491.6 million ($321.6 million), representing a 33% year-over-year increase.

Meanwhile, in 2023, the company’s A$4.84 billion ($3.16 billion) revenue represented a 40% increase from 2022.

According to the VGW Scheme Booklet regarding the potential sale, the first half of the current financial year was also successful.

Through the six months ending December 31, 2024, VGW has generated A$3.5 billion ($2.3 billion) in revenue, with A$298.8 million ($195.5 million) in net profit. If the second half, which ended on June 30, 2025, is as successful, the company could break the A$7 billion milestone in revenue.

However, the growth trajectory is under threat, as VGW has exited several US jurisdictions in the last few months. While it was technically included in the first-half report, the company’s exit from Connecticut was at the end of that period.

Additionally, in 2025, VGW has also left New York, one of the largest markets, as well as Delaware and Nevada. Regulators have also targeted the company in Maryland, Louisiana, and Mississippi.

Moreover, New Jersey has voted to ban sweepstakes casinos, while California is currently debating the issue.

The post Escalante’s Kickr Games Involvement Raises Conflict Concerns Among VGW Shareholders appeared first on CasinoBeats.

Escalante wants to buy the remaining 30% share he doesn’t own in a transaction that would value the company at A$3.2 billion ($2.08 billion). The proposed acquisition reflects a strategic maneuver in response to increasing regulatory security and evolving market conditions in the US.

Lance East Office Proposes Acquisition in Major Buyout

For the acquisition, Lance East Office (LEO), Escalante’s family office, has established Ocean BidCo Limited, a special purpose vehicle registered in the Bailiwick of Guernsey.

Under the proposed Scheme Implementation Deed of purchase terms, VGW would become a subsidiary of Ocean BidCo Limited.
Under the scheme terms, VGW shareholders can receive a A$5.05 ($3.29) per share cash payment, shares in Ocean BidCo, or a combination of the two.

LEO initially approached the VGW board about an acquisition in November 2024. The board then created an Independent Board Committee (IBC). IBC, comprising financial and legal advisors, was tasked with evaluating the potential sale.

IBC rejected LEO’s initial offer of A$3.50 ($2.28) to A$4.00 ($2.58) per share. After further negotiations, IBC deemed that the latest A$5.05 offer accurately reflects the company’s value.

The acquisition is subject to approval from VGW shareholders. If conditions are met, the deal is scheduled to finalize by September 15.

Behind VGW Going Private: Navigating Regulatory and Market Pressures

Escalante’s decision to take the company private follows challenges in the US, one of VGW’s core markets.

Sweepstakes casinos, like VGW’s brands, have faced increased regulatory scrutiny in the US, with several states already moving towards a legislative ban on these platforms.

Last month, Montana officially banned sweepstakes casinos, becoming the first state to do so. Meanwhile, Louisiana, Nevada, and Connecticut are just a governor’s signature away from following Montana.

Additional states, such as New York, New Jersey, and Ohio, are also considering legislative bans. In response, VGW has already announced it will stop sweepstakes play in the Empire State, effectively removing it from its list of eligible jurisdictions.

Due to these challenges, industry sources expect a decline in VGW’s revenue for the remainder of the financial year.

Going private and relocating the company’s domicile to Guernsey from Australia will also benefit VGW. It provides it with tax advantages and a more favorable regulatory environment, which could help VGW in achieving greater operational agility and cost efficiency.

Ending VGW Shareholder Disputes By Going Private

Going private will also help Escalante with his ongoing disputes with shareholders over issues such as valuation, company direction, and regulatory challenges.

As CEO and majority shareholder, Escalante has maintained control of the company; however, these disputes have caused friction, including his recent profanity-laced tirade at investors, in which he told them to sell their shares if they did not trust the leadership.

One of the arguments of minority shareholders is that they believe the company is undervalued. They have pushed for higher valuations and liquidity options. Investors have also questioned VGW’s response to US regulatory pressures, calling for more aggressive expansion and diversification.

Escalante’s move to take VGW private is an attempt to resolve these tensions. By offering a higher price per share than the initial valuation, the CEO is answering those calls for undervaluation.

At the same time, going private gives VGW greater strategic flexibility and Escalante greater autonomy, as the company will no longer be beholden to shareholder expectations.

Being private also allows VGW to keep sensitive business information out of the public eye, which is critical in regulated and competitive businesses like online gambling.

VGW’s Position Compared to Publicly Traded Gaming Giants

Escalante’s ongoing disputes spark comparisons with other high-profile shareholder disputes involving publicly traded gambling giants, such as Penn Entertainment, Bally’s Corporation, and DraftKings.

Ahead of its annual meeting, Penn Entertainment is facing severe pressure from shareholder HG Vora Capital Management. HG Vora claims that the company’s misguided pivot to the digital sector, away from traditional retail casinos, has led to a dramatic decline in shareholder returns.

HG Vora also points the finger at CEO Jay Snowden and the leadership team for a lack of skills aligned with the strategy shift.

Bally’s has faced echoing concerns from shareholders about its focus on its Interactive division. Last year, the company agreed to a merger with its largest shareholder, Standard General, led by Chairman Soo Kim. However, another investor, K&F Growth Capital, opposed the merger.

In an open letter to shareholders, K&F questioned Bally’s shift to digital, which it called “an unmitigated disaster.” It also questioned the mass retail expansion plans for casinos in Chicago, Las Vegas, and New York. The latter faces serious questions as it recently hit a roadblock with the New York City Council.

DraftKings is a digital gaming giant that has grown to become the number two sportsbook in the US. Last year was one of its most successful years in terms of financial results, as it reported its first-ever positive Adjusted EBITDA and 30% yearly revenue growth.

However, between 2021 and 2023, the company faced shareholder concerns over its capital allocation strategy. The shareholders raised questions regarding aggressive marketing spending and acquisitions, with concerns about sustainability and the path to profitability.

Investors even brought in a class-action lawsuit regarding the disclosure of information surrounding DraftKings’ merger with its technology provider, SBTech. That suit was eventually dismissed.

Public vs. Private Gaming Companies: Governance, Regulation, and Strategic Flexibility

The key difference between VGW’s potential privatization and the situations at Penn, Bally’s, and DraftKings lies in their governance and regulatory environments.

Unlike VGW, all three are publicly traded companies operating under strict US gaming regulations. They have disclosure requirements to ensure transparency and accountability. This enables shareholders to actively influence corporate decisions, often leading to public disputes when disagreements arise.

In contrast, VGW does not hold US gaming licenses. The company’s plan to go private and relocate to Guernsey further reduces regulatory oversight and disclosure obligations.

That move gives VGW management greater freedom to pursue long-term strategies without the pressure of investor concerns or public market pressures.

VGW’s privatization enables Escalante to consolidate control and lead the company through evolving market challenges with greater agility. That’s something US-regulated, publicly traded companies cannot do.

The post VGW Going Private: A Strategic Move Against US Regulatory Headwinds and Shareholder Disputes appeared first on CasinoBeats.

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.

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