VGW's Sweepstakes Empire
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A story about how an Australian financial planner built a multi-billion dollar online gambling company through regulatory arbitrage and outsourced development.
"There's this company called Virtual Gaming Worlds. They're basically one of the only legal online casinos in the United States. They own one of the largest poker sites called Global Poker. They do $3.5 billion in revenue with $500 million in profit.
The founder was an ex-financial planner - not a builder or seller. He was a solo founder who didn't know marketing or coding. He paid a developer agency to handle the build out. The code was so buggy that slot machines would accidentally pay out huge amounts several times.
He built it out of Perth, Australia - middle of nowhere. Came to Silicon Valley once but couldn't raise VC because they can't invest in gambling. The good news is he didn't get diluted and still owns 66% of the company.
Their whole business is based on a regulatory workaround using sweepstakes laws. They have a patent around sweepstakes trade promotions. Customers buy virtual gold coins to play games that have no value outside the game, but they get sweep coins with it that can be redeemed for cash.
They just paid out $413 million in dividends. The founder, Lawrence Escalante, went from financial planner to buying Ferraris and private jets through finding this regulatory loophole and executing on it."
Shaan Puri
Host of MFM
Shaan Puri is the Chairman and Co-Founder of The Milk Road. He previously worked at Twitch as a Senior Director of Product, Mobile Gaming, and Emerging Markets. He also attended Duke University.