VGW Faces Regulatory Challenges as Delaware Orders Exit Amid Declining Market Share

Virtual Gaming Worlds (VGW), known for its popular sweepstakes sites like Chumba Casino, Luckland, and Global Poker, is encountering significant regulatory challenges across North America. The Delaware Lottery has mandated that VGW cease its operations in the state, effectively shutting down its online sweepstake casino offerings.

This regulatory setback comes as VGW’s market share for online sweepstakes products has dropped sharply. According to research by Eilers & Krejcik, VGW’s market share has fallen to 50%, down from a peak of 90% in 2020. This decline is expected to impact VGW’s profitability, with player purchases on sweepstakes forecasted to reach $8.5 billion in 2024.

VGW’s regulatory troubles are not confined to Delaware. In December 2023, the Michigan Gaming Control Board also ordered VGW to halt its sweepstakes operations in the state, following similar actions by regulators in Idaho and Washington. Additionally, VGW is facing legal challenges in Georgia, where a class action lawsuit alleges that the company’s dual-currency system is a front for illegal gambling. The case, filed by Destiny Kennedy, seeks to recover losses from playing games on VGW sites and is currently pending in the Georgia Northern District Court. A similar lawsuit is also ongoing in Florida.

Despite these challenges, VGW continues to assert its dominance in the online sweepstakes market. “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. He emphasized the company’s financial stability and ongoing investment in future opportunities.

In the six months ending December 31, 2023, VGW reported $2.8 billion in revenue, marking a nearly 30% year-over-year increase. The company also reported $207 million in net profits after tax, a 23% rise from the previous year, highlighting its resilience despite ongoing regulatory and market challenges.

Source:

“Virtual Gaming Worlds (VGW) Ordered to Exit Delaware Amid Regulatory Challenges.” SBC Americas. August 19, 2024.