VGW agrees to pay $8 million following operation in New York for illegal sweepstakes casinos
VGW Holdings will pay an $8 million settlement in New York after being accused by the Office of the Attorney General of operating unlicensed online gambling platforms, amid a national offensive against sweepstakes casinos.
Key Takeaways
- VGW Holdings agreed to pay $8 million following investigations into illegal sweepstakes casinos in New York.
- The New York Attorney General's Office led the action, highlighting regulatory risks and player losses.
- New York and other U.S. states have banned or restricted the sweepstakes model, forcing operators to exit or adjust.
- VGW's founder, Laurence Escalante, took leave following legal issues in 2026.
VGW Holdings has agreed to pay $8 million as a settlement following an investigation by the New York State Office of the Attorney General (OAG), which determined that the company was operating online gambling platforms without the required authorization. The settlement, announced by Attorney General Letitia James, includes the return of profits, penalties, and costs, and directly impacts the operations of the brands Chumba Casino, Global Poker, and Luckyland Slots in the state.
OAG Investigation and Findings on Sweepstakes Casinos
The OAG of New York issued a cease and desist order against VGW Holdings in June 2025, along with other companies in the sweepstakes casino sector. VGW, an operator originally from Australia, began its activities in New York in 2012 with Chumba Casino, expanding its presence with Global Poker in 2016 and Luckyland Slots in 2018.
The sites offered a virtual currency, 'sweeps coins', promoted by VGW as a system outside the definition of gambling, as the operator claimed it was free for players. However, the regulator's investigation revealed that it was possible to acquire sweeps coins similarly to purchasing chips in a traditional casino. For every dollar spent on its platforms, a virtual coin was awarded, equating the functionality to that of a real casino.
Legal Ban and OAG's Position on Sweepstakes Gambling
In light of these findings, Governor Kathy Hochul enacted a law in December 2025 prohibiting sweepstakes casinos in New York. The OAG highlighted the risks to consumers, pointing out that this type of casino is not subject to audits or the regulatory oversight required by the state.
“Online sweepstakes casinos are especially risky because they are not subject to audits or other forms of regulatory supervision by the state. Without that oversight, players have no way of knowing if the games are rigged, if the casino can cover a winning bet, or if it meets the consumer protection measures required by New York law,” emphasized the OAG.
In her statement, Letitia James said:
“Our state’s gambling laws are designed to protect New Yorkers. Online sweepstakes casinos like Chumba Casino, Global Poker, and Luckyland Slots posed a threat to the financial and mental health of New Yorkers. Now VGW is held accountable for the harm caused,” James stated.
Some players reportedly lost tens of thousands of dollars on VGW’s platforms, according to information provided by the state authority.
Implications for VGW and Nationwide Crackdown Expansion
The settlement in New York represents a recent example of the increasing legal measures against sweepstakes casinos in the United States. In June 2025, the Florida Attorney General, led by James Uthmeier, filed a lawsuit against VGW and Stake, accusing them of facilitating “illegal online gambling” in that state.
VGW also ceased its operations in West Virginia in November 2025 after facing legal difficulties in the state. Additionally, regulators from Washington, Michigan, Idaho, Nevada, and California have already banned the sweepstakes gaming model, and Montana, Connecticut, Louisiana, and New Jersey are expected to implement similar bans in the near future.
Changes in Management and Internal Context of VGW Holdings
In the first quarter of 2026, VGW's founder, Laurence Escalante, took a leave of absence from his position due to an arrest on alleged domestic violence charges. The company, which had defended the legality of its sweepstakes casino operations in various markets, now faces increasing legal challenges in its primary expansion market — the United States.
Regulatory and Operational Outlook for the Future of Sweepstakes Casinos
The regulatory offensive led by New York indicates a shift in approach towards oversight of digital gambling and business models based on redeemable virtual currencies. Companies like VGW will now need to seriously consider the viability and regulatory risks of operating sweepstakes casinos in U.S. markets and evaluate alternatives for their international portfolio.
The online casinos industry and platform providers will need to intensify their attention to state regulatory developments — especially concerning consumer protection and the traceability of payment mechanisms — if they seek to avoid similar penalties and litigation in other states.
Frequently Asked Questions
Why did VGW Holdings pay an $8 million settlement in New York?
VGW Holdings agreed to pay $8 million as part of a settlement with the New York Attorney General's Office after it was determined that the company operated online gambling platforms without the required licenses. The measure included the return of profits, fines, and costs.
What casino models did VGW operate in New York?
VGW operated platforms like Chumba Casino, Global Poker, and Luckyland Slots, utilizing the sweepstakes model with virtual coins that could be purchased with real money and used to participate in online gambling.
When were sweepstakes casinos banned in New York?
New York banned sweepstakes casinos in December 2025, when Governor Kathy Hochul signed the respective law following an investigation by the OAG and legislative pressure due to lack of oversight and consumer risks.
In which other states did VGW face regulatory actions?
VGW faced regulatory actions and lawsuits in Florida, West Virginia, and bans in Washington, Michigan, Idaho, Nevada, and California. Other states like Montana, Connecticut, Louisiana, and New Jersey are looking to implement similar restrictions.
What impact did the investigation have on players of VGW's platforms?
Some players in New York lost tens of thousands of dollars on VGW platforms, according to the OAG, which prompted state action and highlighted the lack of consumer protection in the sweepstakes model.
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About the author
Gonzalo Marín
Industry Deals Correspondent
Gonzalo Marín covers the corporate deal flow of gambling — operator strategy, M&A, regulated-market entries, and product launches. The reports open with the transaction, cite companies, valuations, and jurisdictions exactly as released, and keep the announcement apart from its actual effect. When a Latin American operator raises capital or a European brand lands in the region, Gonzalo Marín reports who signs, for how much, and on what terms.
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