Billionaire Laurence Escalante to move Virtual Gaming Worlds to tax haven Guernsey

The tax haven of Guernsey is calling for online gambling magnate Laurence Escalante with documents revealing his move to buy out minority shareholders in a $1bn deal involves moving offshore.

Virtual Gaming Worlds,entrepreneur Laurence Escalante is trying to buy out minority shareholders in a $1bn deal. Photo: Nic Walker

Laurence Escalante’s $1bn move to buy out his minority shareholders of his Virtual Gaming Worlds empire involves moving the entity that owns the company to the tax haven of Guernsey, documents reveal.

Ocean Bidco Limited, the entity Mr Escalante is using via his Lance East private office to acquire all the shares in VGW, was incorporated and registered in Guernsey in late April according to paperwork obtained by The Australian.

Mr Escalante, a billionaire on The List – Australia’s Richest 250, is putting together a package up to $1.26bn to fund the buying out of minority shareholders in his private VGW – one of the biggest private companies in Australia.

The move, should it be passed via a scheme of arrangement vote, would likely end the need for VGW, which would become a subsidiary of Ocean Bidco Limited, to file annual financial reports to the Australian corporate regulator and lessen its public and shareholder disclosures given it would not be governed by the Corporations Act.

There is no corporate tax in Guernsey, though VGW sources claim Mr Escalante’s business empire, which has its headquarters in Perth, would still have a taxpaying entity in Australia. He has told VGW staff he would remain domiciled in Australia.

Perth billionaire Laurence Escalante Picture: Instagram,

VGW paid $185m of corporate tax in the 2024 financial year, its accounts show, after posting a $677m pre-tax profit from $6.13bn revenue.

Mr Escalante is listed as a director of Ocean Bidco in documents recently lodged with the Australian Securities and Investments Commission, which has classified it as a foreign company.

Another director is Elliott Schutte, a lawyer at Herbert Smith Freehills in Perth and former compliance officer at VGW. Mr Schutte also raced for Mr Escalante’s Ferrari factory-supported Arise Racing GT motor racing team this year.

Mr Escalante’s Lance East Office this week offered minority shareholders $5.05 per share for their holdings less any dividends paid. VGW announced it was planning to pay shareholders, including Mr Escalante, dividends of up to 45c per share for the 2025 financial year, earnings for which the company flagged would be soft compared to 2024 due to increasing regulatory issues in the US.

Several of VGW’s minority shareholders, who own about 30 per cent of the public unlisted company, have expressed concern about several aspects of Mr Escalante’s proposed deal in dozens of messages in a shareholder group on Telegram.

The investors have to vote yes to take the full cash, and also have to vote yes to maintain their shareholding or take a mixture of cash and shares. A no vote would see VGW stay in its current form.

Virtual Gaming Worlds has become a $6.1bn company under Laurence Escalante. Photo: Nic Walker

Among the concerns raised are tax implications for shareholders if they elected to maintain shares in the new Bidco and the $3.2bn valuation – including the upcoming dividends – the offer places on VGW being too low.

One shareholder said the “only upside” was if Mr Escalante’s Bidco was later bought out, otherwise their shareholding is essentially put “into the family office cold wallet put on the shelf with no obligation to release info to ‘minority’ shareholders.”

Another said: “So essentially if you hold BidCo shares, say goodbye to dividends and goodbye to any future liquidity.”

A VGW shareholder who The Australian spoke to said he was likely to sell at least part of his shareholding in the offer and played down concerns. “What often happens if you are investing in a company with a prominent founder, like Laurence, who holds a large stake, then you generally are investing in what they are doing and having to go along with that.”

VGW hired Mike Symons of Canterbury Partners as an independent non-executive director to assess the deal. He told The Australian that he fielded two lower offers from Lance East before agreeing to the $5.05 price.

Mr Symons and Mr Escalante have claimed the valuation took into account increasing regulatory headwinds VGW is facing in the US, where more than one million customers now play virtual casino games inside its Chumba Casino every day.

Regulators have cracked down on social casino-themed games in several states, including Nevada and Delaware. VGW is also phasing out sweepstakes promotions in the State of New York, all of which it says will lead to earnings for the second half of FY25 likely being 10 per cent to 15 per cent lower than earnings for the first half of FY25. Louisiana and Connecticut are also banning online sweepstakes casinos.

Laurence Escalante, founder Virtual Gaming Worlds. Photo credit: Supplied/Abigail Harman

“None of this is to suggest I don’t remain confident in VGW’s future,” Mr Escalante said in a note to shareholders sent this week. “However, I must acknowledge our business currently faces not just opportunities or blue sky, but also challenges and risks.”

In an effort to diversify, VGW purchased a minority stake in lottery operator 99 Dynamic and has clinched a deal with the global toy giant Hasbro to develop a match-three online game (where players win when three tiles or elements are lined up) for the Monopoly board game brand. It has soft launched in Canada ahead of a release in the US mid-year.

In a note to VGW staff on Monday, obtained by The Australian, Mr Escalante said: “There are no plans to make any major changes to our business or other key aspects of our operations should this transaction proceed, such as our company name, office locations or team member employment.”

ENDS

Originally published as Billionaire Laurence Escalante to move Virtual Gaming Worlds to tax haven Guernsey