VGW founder Laurence Escalante is reportedly ruffling the feathers of his company’s investors with the operation of Kickr Games, an American social sports and casino brand.
According to the Australian Financial Review, Escalante’s Kickr brand is causing frustration as the online casino and sports betting site competes with VGW’s portfolio of brands. Kickr does not operate under VGW as it is owned by the family office of Escalante.
Escalante created Kickr in 2023 as his first foray into the U.S. social sports betting market.
Escalante claims Kickr does not compete with VGW
“This is a business … that is completely separate from VGW, which has had no involvement with it whatsoever,” said VGW in a statement to the Financial Review. “It has no impact on VGW or its operations, and VGW does not view it as a competitor.”
The Kickr brand is facing competition concerns as Escalante attempts to acquire full ownership of VGW. Last month, VGW announced a Scheme Implementation Deed with a special purpose company owned by Escalante’s family office, Lance East Office. The deed provides Escalante with the remaining 30% of VGW as he currently holds a 70% stake.
A deal for full ownership of VGW values the company at approximately $2 billion.
Offer to take VGW private remains on the table
Escalante proposed a $632 million buyout for the remaining 30% of VGW and has vowed not to increase his offer after it was deemed a fair and reasonable bid by an independent expert. The deed filed by VGW allows minority shareholders to receive cash, to continue their investment in VGW or both. VGW shareholders will be considering Escalante’s offer on Aug 1. with a deal to transfer full control of the company to be completed by Sept. 15.
Escalante’s ownership of Kickr is expected to complicate talks by shareholders as he attempts to purchase full ownership of VGW and take the sweepstakes giant private.
Escalante has a net worth of roughly $3 billion, a 20% uptick year-over-year, according to the Financial Review’s Rich List. The figure makes him the 35th richest person in Australia.
The Lance East Office will borrow up to $586 million from VGW to fund the sale. According to documents, VGW generated $4 billion in revenue in the 12 months to June 30 last year.
The results were a 27% increase year-over-year.
VGW expects regulatory oversight of social casinos and sweepstakes in the U.S. to impact profits as it estimates that its earnings per share could drop up to 15% in its next financial report.
VGW has had its brands recently exit Connecticut, Delaware, New York and Nevada.
