VGW Shareholders Back Escalante Buyout as Firm Prepares to Go Private

Virtual Gaming Worlds (VGW) is heading for a major transition after shareholders approved a buyout proposal from founder Laurence Escalante, clearing the path for the Australian gaming firm to go private. The decision comes as VGW faces increased regulatory challenges, particularly in the U.S., and looks to regain strategic flexibility.

Good to know

• Escalante’s A$5.05 per share offer values VGW at A$3.2 billion (US$2.1 billion).
• 85.04% of shareholders, including 91.31% of minority shareholders, voted in favor of the deal.
• VGW expects court approval on August 5, with full buyout execution set for August 20.

The buyout, which was formalized in a vote held on August 1, allows Escalante to acquire the remaining 30% of VGW shares he doesn’t already own. The transaction will proceed through Ocean BidCo Limited, a Guernsey-based special purpose vehicle, giving investors the option to receive cash, shares in Ocean BidCo, or a mix of both.

The approved offer of A$5.05 per share sits comfortably within the independent valuation range provided by Kroll Australia and represents a premium over Escalante’s initial November 2024 offer of A$3.50–4.00 per share.

Tensions and Governance Questions

The vote brings closure to what had become a tense standoff between Escalante and minority shareholders, many of whom had raised concerns about governance transparency, valuation, and U.S. regulatory exposure.

Earlier reports surfaced of Escalante pushing back aggressively at investor criticism, telling dissenters to “sell their shares” if they lacked confidence in his leadership. Some shareholders also highlighted a potential conflict of interest related to his involvement in Kickr Games, a social gaming project that overlaps with VGW’s core business.

Despite the friction, Escalante has remained steadfast in arguing that taking the company private is essential to protecting long-term growth.

VGW’s flagship brands—Chumba Casino, LuckyLand Slots, and Global Poker—operate under a sweepstakes-based dual-currency model, which has come under increasing legal pressure in the United States.

The company has withdrawn from 11 U.S. states, including New Jersey, Connecticut, Mississippi, Delaware, New York, and Nevada. In addition, its games remain unavailable in Idaho, Montana, Michigan, and Washington, with legal action ongoing in Alabama and regulatory risk growing in Maryland and West Virginia.

By moving operations under a Guernsey-registered entity, VGW will no longer be required to release public financial statements in Australia. However, Escalante has committed to maintaining a domestic tax presence and remaining based in Australia.

Financial Performance Still Strong

Despite the regulatory setbacks, VGW has posted impressive financial results. For the fiscal year ending June 2024, the company brought in A$6.1 billion (US$3.94 billion) in revenue and A$491.6 million (US$317.75 million) in net profit—up 27% and 33%, respectively, year-over-year.

Looking ahead, VGW projects FY2025 profits between A$555 million and A$570 million, citing strong first-half performance and expectations for similar results through the rest of the year.

Escalante says that private ownership will help the company remain agile and better navigate an evolving legal environment without the burden of public disclosures.

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