The hangover
VGW takes the regulatory hits as founder bids for control
Assessment of sweepstakes operator’s value follows regulatory heat.
In +More: Fanatics adds bet surcharge in Illinois.
Earnings extra: Intralot makes the “compelling” case for Bally’s deal.
Dragon’s den: Welsh-facing DragonBet’s regionally focused challenge.
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Risky business
Kroll with it: VGW faces “significant risks” alongside “material” legislative and regulatory challenges, according to an independent assessment produced ahead of founder Laurence Escalante’s attempt to buyout the sweepstakes gaming operator’s minority shareholders.
The assessment from Kroll was included in a document that set out the terms for the attempt of Escalante and his family office, Lance East Office, to take full control.
Kroll said the A$5.05 a share offer, which values the operator behind Chumba Casino, Luckyland and Global Poker at ~A$3.3bn ($2.2bn), is “fair and reasonable.”
Squeezy does it: The report also detailed the extent to which the recent regulatory and legislative moves are having an adverse effect on VGW. In the six months to June, the company’s FY25 H2 revenues are expected to come in 10-15% lower than H1 revenue after paying out prizes of A$988m.
Kroll said its analysis showed market withdrawals, including an exit from New York, had impacted the H2 performance while legislative action had also had an effect.
It said the weakness was driven by rising cost per acquisition costs, increased redemption rates on the part of players and a reduced contribution from Luckyland.
Laurence takes over: Escalante’s attempt to take full control was launched in early June after details emerged of an expletive-filled Telegram rant against the minority shareholders.
An initial offer of between A$3.50 and A$4 to the owners of the 30% of shares that Escalante does not already own was knocked back by a two-person independent board committee, led by banker Mike Symons.
Shareholders will vote on the offer on August 1, which VGW said is “best and final.”
Turn of the screw: The news of the move to take full control of VGW comes as the regulatory backdrop for the format in the US has darkened considerably in the past few weeks.
As per Tuesday’s C+M, New Jersey is the latest state to pass legislation that specifically bans sweepstakes gaming, alongside proxy betting. The measure now awaits Gov. Phil Murphy’s signature.
New Jersey joins Montana and Connecticut, which have recently passed anti-sweeps legislation, while measures in New York and Nevada are awaiting gubernatorial sign-off.
At the same time, pressure is building in California where a bill targeting online sweepstakes casinos is set for its first major hearing before the Senate Governmental Organization Committee on July 8.
The measures would impose criminal penalties on operators, suppliers, promoters and affiliates of illegal sweepstakes platforms.
The legislative moves have been accompanied by flurries of cease-and-desist letters in New York, Arizona, Louisiana and Mississippi.
Take a hint: The extent to which the worsening regulatory backdrop is influencing Escalante’s moves to take full control has previously only been hinted at.
In a statement from June, Escalante gave a nod to the regulatory situation in the US by suggesting VGW faces “many new opportunities but also challenges and uncertainties.”
The Kroll report said the various state-by-state legislative efforts and enforcement attempts “create uncertainty in relation to VGW’s financial performance.”
It added that VGW shareholders should be aware that the legal and regulatory risks VGW faces “have accelerated over the course of 2025.”
Financial performance: The scheme document said VGW’s revenues after paying out prizes rose from A$1.19bn in 2022 to A$1.79bn last year. In H2 of the company’s financial year, revenues after prizes stood at $988m. Pre-tax profits hit A$677 in 2024 and stood at A$441m in H1 FY25.
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+More
Follow the leaders: Fanatics has become the first of the smaller operators in Illinois to add a surcharge on all bets in response to the changes in the tax regime in the state, which came into force this week. According to Sports Business Journal, Fanatics will add a 25¢ per bet charge, with the company saying the move “reflects the high cost of operating” within the state.
French disco: Austrian gaming giant Novomatic has completed its acquisition of France-based Vikings Casinos, which operates 11 casinos, after receiving the necessary regulatory approvals. The financial terms of the deal, which was previously announced in March, were not disclosed.
Funding rounds
UK-based fintech proposition Yaspa has received $12m of investment in a new round led by Discerning Capital to help fund its expansion in the US, where the company has just set up an office in Atlanta, Georgia. The instant payment and identity services provider founded by ex-Worldpay CTO James Neville uses open banking and AI to power its real-time payment solution called Intelligent Payments.
Read across
Keeping their powder dry: The Gambling Commission may move to settle confusion over the disputed need for UK operators to carry out ‘affordability’ checks, but will stay silent until at least the end of its ongoing financial risk assessment pilot, according to the GC’s director of major policy projects. In Thursday’s Compliance+More.
Dog of war: Also in yesterday’s C+M, Sacramento Superior Court Judge Jennifer Rockwell has denied Underdog’s last-minute attempt to block California Attorney General Rob Bonta from releasing a legal opinion on the status of daily fantasy sports (DFS) in the state. The court found Underdog “failed to establish” any concrete harm from the anticipated DFS ruling, which is expected to deem all forms of fantasy contests illegal under California law.
What’re we’re reading
One big, beautiful torpedo below the water line: President Trump’s flagship tax bill contains a $1bn gaming tax grab that could slash players’ net winnings and would have a “big impact” on the sector, according to Rep. Dina Titus from Nevada.
+More careers
The big move: Flutter Entertainment has appointed Ben Reilly as COO of the company’s UK and Ireland brands. Reilly has been with the company since 2023, most recently as chief product officer of Flutter UKI. as part of the reshuffle, Sky Bet CCO Steve Birch and Paddy Power CCO David Newton will leave the business
Elsewhere, Stefan Tweraser has been appointed new CEO at Germany-based lottery reseller Zeal Network. He will begin in his new post in September and joins from being CEO at Rocket Factory Augsburg. He succeeds Helmut Becker who decided not to renew his contract in March but who will remain as a consultant until January next year..
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Earnings extra – Intralot/Bally’s
Greek earn: The transformational deal that will see Intralot buy Bally’s international interactive business for €2.7bn in cash and shares will produce a “compelling combination” and “sets the foundation for long-term sustainable growth,” said the prospective CFO Chrysostomos Sfatos.
See yesterday’s Earnings Extra (E+M PRO subscribers only).
Earnings in brief: Esports and Gen Z-focused Toronto-listed minnow Rivalry insisted its strategic turnaround is “taking hold” after it showed slightly narrowing losses in its belated FY24 earnings. Net losses for the year were pruned by 6% to C$22.4m ($16.5m) on revenues that dropped 16% to C$13.6m. The company has continued its efforts to stabilize the business in 2025 via a focus on increasing player value, tightening operational efficiency and accelerating revenue drivers.
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The challengers – DragonBet
A welcome in the hillsides: DragonBet wasn’t designed to be a challenger brand. It was supposed to be a lifestyle business. But CEO David Lovell says what started as a regional sports-betting venture in Wales has evolved into something far more ambitious and possibly scalable.
“We survived FanUnite,” he says of the operation’s previous platform deal.
“No matter how bad the product, we had the offering, the regionalization and the lower-level sports markets, particularly rugby,” adds Lovell, who built DragonBet around Welsh sporting culture.
Local hero: The company’s breakthrough was less about chasing innovation and more about understanding a neglected niche. Lovell and his team saw an opportunity as larger operators moved away from horse racing and as tighter regulation slowed new entrants.
By staking a claim on local identity, especially through regional sport and lower-league markets, DragonBet was able to build a sticky, loyal user base.
That grounding gave DragonBet resilience and allowed the business to focus on areas where it could win: regional loyalty, specialist markets and tailored pricing.
The tech stack is built on Playbook Engineering, part of Star Sports, and the team – now 28 strong – is based in Cardiff.
Turf’s up: While the brand has a strong Welsh identity – 20% of revenues come from Welsh postcodes – it’s horse racing that is driving broader growth. Lovell sees this as a sector where product parity is still achievable for smaller operators.
“With horse racing, the product gap is less significant,” he says. “Product gaps are less relevant to the audience. They have a lesser requirement. We’re also quite clever with our pricing.”
DragonBet has leaned into that with aggressive marketing, including sponsorships on Sky and a clear focus on where larger operators are retrenching.
Leading on aggregate: Casino is part of the mix, but not yet a focus. The company relies on aggregator content, and while it’s considering launching a branded DragonCasino, Lovell is candid that priorities remain elsewhere.
“We haven’t pushed on that,” he noted. “We’re relying on aggregators. We don’t lead with it, it’s incremental.”
There’s no immediate exit in sight. The focus is squarely on sustainable growth and doubling down on what makes the business different.
“We’re very early in our journey,” says Lovell. “We have some exciting plans underway. We want to make DragonBet a sustainable business.”
Connections
Bragg Gaming has announced a content and tech partnership with the Fanatics Casino offering in New Jersey, Michigan and Pennsylvania. High Roller Technologies has announced a partnership with Gaming Realms to add its innovative gaming content, including its Slingo-branded games to its upcoming proposition in Ontario.
Optimove has teamed up with EveryMatrix to allow B2B clients of both companies to stream EveryMatrix’s data directly into Optimove. DigiPlus Interactive said it expects to go live with its Brazil operations in September with a full suite of iCasino content. DigiPlus operates the bingo platform BingoPlus, as well as a sportsbook called ArenaPlus and the casual gaming offering GameZone.
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Upcoming earnings
Jul 17: Evolution
Jul 18: Betsson
Jul 23: Kambi, Las Vegas Sands, Churchill Downs
Jul 29: BetMGM, Red Rock Resorts, Caesars Entertainment
July 30: MGM Resorts, Robinhood
Jul 31: Vici Properties (call)
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