Editor’s note: This is an updated version of a story that now includes comment from the Delaware Division of Gaming Enforcement
Virtual Gaming Worlds (VGW) continues to face regulatory issues in North America.
The Delaware Division of Gaming Enforcement confirmed to SBC Americas that it ordered VGW to shutter operations in the state and cease offering online sweepstake casino products. VGW owns popular sweepstake sites Chumba Casino, Lucklyand and Global Poker.
While the Australia Financial Review first reported this news last month, Delaware Division of Gaming Enforcement Director Greg Nolt confirmed the cease and desist was actually sent on Feb. 23, 2023.
Speaking to the Financial Review VGW COO Tim Moore-Barton said he only became aware of the letter when it was introduced in a lawsuit against the company. To date, the company does not indicate that is does not service Delaware residents.
VGW is poised to hold a 50% market share for its online sweepstake products, down from a peak of 90% in 2020, according to research conducted by Eilers & Krejcik.
The decline in market share hinders VGW’s ability to drive profits from its North American operations with player purchases on sweepstakes expected to reach $8.5 billion in 2024.
Multiple class action lawsuits against VGW underway
Last December, the Michigan Gaming Control Board ordered VGW to cease operations of its sweepstakes in the Wolverine State, joining regulators in Idaho and Washington.
VGW is also having issues in Georgia after a woman filed a class action lawsuit in the state alleging the company offers illegal online gambling products to residents. The plaintiff, Destiny Kennedy, alleges VGW’s dual-currency format is a coverup for running an illegal casino. Kennedy is seeking a recoup of losses accrued while playing games on VGW sites.
The case, initially filed in Superior Court, sits in the Georgia Northern District Court. There is a similar class action pending in the Florida Middle District Court.
Despite VGW losing market share across America, the company maintains its dominance.
“But as the pioneer in online social games with sweepstakes promotions, we still have a leading market position,” VGW COO Tim Moore-Barton told the Australian Financial Review last month. “With a strong balance sheet and cashflows, our financial strength allows us to reinvest both for now and the future, and we have multiple exciting opportunities in development.”
In the six months ended Dec. 31, 2023, VGW generated $2.8 billion in revenue. The results were nearly a 30% increase year-over-year. During the same six months, VGW reported $207 million in net profits after tax, a 23% uptick year-over-year.
