Can I Play Chumba Casino, Luckyland Slots, and Global Poker From My State?

Smart Company this week profiled Laurence Escalante and his $5 billion gambling empire that comprises some of the world's largest sweepstakes casinos, Chumba, LuckyLand and Global Poker, all part of the Virtual Gaming Worlds brand.  You may have heard of them.  Escalante built them in his basement!

In 2023, VGW was the sixth largest private company in Australia by turnover with 1200 employees globally.

All of the businesses fall into the category of ‘sweepstakes’ online casinos, primarily targeting the US market.

Sweepstakes casinos offer the exact same games as other online casinos: roulette, slot machines, blackjack, poker, you get the picture.

But there’s one clever difference.

Unlike some of the long established online casino brands like BetUS, you don’t gamble in real money; you gamble with virtual currencies.

You also can’t ‘buy in’ with real money.

All three brands, but Chumba in particular, have become quite popular on the web.  Chumba is marketed more heavily in the U.S. it appears.

Can I Play at Chumba Casino, LuckyLand Casino, Global Poker From My State?

Not all states allow these so-called sweepstakes casinos.

Chumba Casino was chased out of the state of Michigan by regulators last October.

State gaming regulators first began investigating another sweepstakes casino, Golden Hearts Games, in August 2021 and found Golden Hearts’ activity constituted illegal gaming, as they did not hold a license to offer gaming in the state of Michigan.  State regulated online casinos must pay a licensing fee and a specified tax rate.

In 2022, the Department of Attorney General issued a cease-and-desist letter to Golden Hearts advising that it was illegally operating. Despite the letter, Golden Hearts continued to offer its gaming product to Michigan residents. The Department subsequently sent notice under the Michigan Consumer Protection Act of its intent to file an action in state court. Faced with the intended lawsuit from the State of Michigan for violating the Lawful Internet Gaming Act by conducting internet gaming without a license, Golden Hearts thereafter agreed to halt its activity, signing an Assurance of Discontinuance stating that it would no longer offer its games in Michigan.

The Assurance of Discontinuance was filed in the Ingham County Circuit Court on September 1, 2023. The complaint also alleged that Golden Hearts’ conduct violated the Michigan Consumer Protection Act by deceiving Michiganders into thinking that they were participating in legal gaming.

“Unlicensed gaming robs our schools and our government of essential funding and leaves consumers unprotected,” Nessel said. “When companies like Golden Hearts attempt to circumvent Michigan’s gaming laws, they create the false impression that their games are legal and safe for consumers. My office is committed to ensuring that our gaming laws are strictly enforced and those who violate those laws are held accountable.”

They then set their eyes on Chumba and its sister sites, though Escalante seemed to get the message pretty quick before the Michigan Gaming Control Board really had a chance to come after them.

Escalante Not the First to Realize the Potential of Sweepstakes Casinos

The idea of ‘sweepstakes’ actually goes back to the 1940’s, Smart Company's Jason Andrews explains.

A ‘sweepstake’ is just a lottery with a prize where there is “no purchase necessary to enter” and “purchases will not increase the chance of winning”.

In the 2000s, there was a shift from physical slot machines to digital gambling. Venues would disguise themselves as internet cafes offering ‘slots’ on computers without the chance of winning any real prizes. These early sites didn’t have the ingenuity to build the ‘twin coin’ model which defines the sweepstakes casinos of today, but they did play a key role in catalysing the shift to online slots.

Escalante simply took things to the next level.

Firstly, he realised that mobile was going to be big. Just as the shift to mobile laid the platform for Uber and Instagram, so too did it provide a platform shift for VGW. Facebook allowed online gaming companies to advertise, providing a huge top-of-funnel to acquire customers. After Zynga Poker’s success in 2006-07, the groundwork had been laid for a wave of online gaming companies to follow in their wake.

Secondly, Escalante had the ingenuity to engineer the ‘sweepstakes’ model of offering two sets of coins. Combining an online slots platform with the cash prize-token reward model, Escalante could effectively run a ‘paid’ real money casino without customers explicitly paying to enter.

Don't be fooled by the concept of a "social casino" as Escalante's company makes enough money to sponsor the Ferrari F1 team.

VGW did $580 million in EBITDA and $376 million in profit after tax in FY23.

Andrew writes:

There aren’t many companies that can go from $300 million in revenue to $2.2 billion in revenue in less than two years.

There also aren’t very many people who own 120 supercars.