Laurence Escalante, the founder of Virtual Gaming Worlds (VGW), has initiated a bold move to consolidate his control over the company by acquiring the remaining 30% of shares he does not yet own. The proposed transaction would grant him complete ownership of the sweepstakes casino giant, which is now valued at approximately $3.2 billion.

Escalante already holds a 70% stake in VGW and has now entered into a Scheme Implementation Deed with Ocean BidCo Limited, a special-purpose entity formed by his family’s Lance East Office. This agreement sets the stage for Escalante to purchase the outstanding shares from minority investors at a revised price of $3.26 per share — an increase from earlier proposals that had been rejected.

Escalante’s Path to Sole Ownership

The effort to buy out the remaining shareholders began in November 2024 when Escalante approached VGW’s board with a non-binding offer. In response, the board created an Independent Board Committee (IBC) to evaluate the proposal. Initially, the suggested purchase price ranged from $2.26 to $2.58 per share. However, the IBC deemed that the valuation was insufficient, triggering a series of negotiations that ultimately led to the increased offer of $3.26 per share.

According to IBC Chairman Mike Symons, “The VGW Independent Directors believe the offer price recognizes the value of VGW’s business, after taking into account its medium and longer-term potential and the ongoing risks relating to VGW’s business and operating environment.”

The deal offers minority shareholders the flexibility to either cash out at the offered price or maintain their stake in the business. For those who choose to remain invested, there is potential eligibility for capital gains tax rollover relief, offering a financial incentive to stay on board.

According to an official company announcement, the transaction is contingent on shareholder approval and regulatory clearances. If all conditions are met, the deal is expected to be finalized by September 15.

Tensions and Transparency Concerns Surface

The proposed buyout comes at a time of heightened internal and external pressures for VGW. Relations between Escalante and some minority shareholders have grown increasingly strained over concerns about transparency and corporate governance. Those frustrations came to a head during a private group chat where Escalante responded to criticism with an expletive-filled message, reportedly telling disgruntled investors to exit the company if they doubted his leadership.

His combative stance underscores the growing divide within VGW’s shareholder base and reflects the broader tension in the company’s governance model. While Escalante’s proposal seeks to eliminate friction by consolidating authority, critics warn that the shift could come at the cost of reduced oversight and heightened risk.

Navigating Regulatory Headwinds

The buyout attempt also comes amid VGW’s strategic retrenchment in response to increased regulatory attention in the United States. The company has been forced to scale back operations in several states due to legal challenges and investigations. Most recently, VGW announced that it would cease its sweepstakes offerings in New York by August, citing an uncertain regulatory environment. This move follows a similar exit from Connecticut in late 2023 after receiving a cease and desist order from the state’s Department of Consumer Protection.

Earlier this year, VGW also halted operations in Delaware following a state investigation that concluded the company was running unauthorized online casino games. Additionally, VGW’s Global Poker brand withdrew from Nevada, further narrowing the company’s operating footprint.

Despite these regulatory hurdles, VGW’s social gaming offerings, which use alternative digital currencies, remain active and unaffected by these changes.

Building Advocacy Through Industry Alliances

In response to growing scrutiny, VGW has joined forces with several other industry players to form the Social Gaming Leadership Alliance. Partnering with firms like PLAYSTUDIOS, Yellow Social Interactive, ARB Interactive, and B-Two Operations, the group seeks to raise awareness and advocate for the social gaming sector. The alliance aims to work closely with lawmakers, regulators, and the public to shape the evolving legal landscape and ensure that operators like VGW have a seat at the table.

VGW has pioneered a model that leverages a regulatory loophole, enabling the company to offer gambling-style experiences through a sweepstakes format — an approach that has drawn both praise and criticism. Supporters argue that the model complies with existing laws and offers entertainment in states lacking regulated online gambling. Detractors, however, contend that the system evades consumer protections and allows companies like VGW to reap financial benefits while bypassing taxes and regulatory oversight.