VGW pulling plug on Chumba Casino, Global Poker across Canada
Virtual Gaming Worlds (VGW), a leading operator of free-play social gaming and dual-currency sweepstakes gaming in North America, is closing up shop in Canada.
Chumba Casino players received an email informing them that players will no longer be able to access the platform from Canada as of Oct. 23. A VGW spokesperson told Canadian Gaming Business that both Chumba Casino and Global Poker are leaving the Canadian market. The company’s third brand, LuckyLand Slots, does not have a Canadian presence.
VGW will shut down not only its gaming offerings that allow for real-money play, but also all free play.
Generally speaking, sweepstakes gaming operates a dual-currency system wherein players receive allowances of Gold Coins and can choose to pay money to buy more. Those coins can be used for gameplay but have no cash value. Meanwhile, customers also have the opportunity to earn Sweeps Coins, which can be used for gameplay and also exchanged for real money or other prizes.
Effective Aug. 28, Chumba players will no longer be able to purchase Gold Coins, but will be able to continue to use any Gold Coins or Sweeps Coins in their account. As of Sept. 25, they will no longer be able to play any games but will still have the opportunity to redeem Sweeps Coins for prizes. All Canadian access will be blocked on Oct. 23.
‘A strategic, isolated decision’
The VGW spokesperson told CGB that the Canadian shutdown move is a “strategic, isolated” decision reflecting the fact that operations north of the border are no longer seen as a worthwhile endeavour.
“We can confirm that following careful consideration, we’ve informed players of a decision to phase out our brands that offer products in Canada (Chumba Casino and Global Poker),” the spokesperson said. “We understand this is an adjustment after many years and our valued Canadian players may be disappointed. This decision wasn’t taken lightly and our focus is on ensuring players are fully informed about the changes, and that this transition is as smooth as possible.
“Ultimately, this is a difficult but strategic, isolated decision. Our Canadian business is relatively small, as the vast majority of our players reside in the larger U.S. market, where we will concentrate our management focus, resources and investment going forward.”
The sweepstakes model of online gaming is deemed in Canada to be non-real-money gaming and is permitted nationwide without regulatory oversight, including in Ontario, where more typical online casino gaming and sports betting are regulated. Chumba and Global Poker have been available to players across Canada for years, except in Québec, where gaming rules provide more of a barrier to social gaming operators.
US spotlight casts long shadow
Australian company VGW is a leader in the sweepstakes and social gaming sector and operates with a large U.S. presence. It is also a core founding member of the Social Gaming Leadership Alliance (SGLA), an advocacy and action group that includes numerous parties as members, including several other social gaming operators and Montréal-headquartered payments giant Nuvei.
Although there is no suggestion from the company that its Canadian exit comes under any regulatory pressure north of the border, the operator has come under an ever-brightening spotlight in the U.S. as numerous states continue to scrutinize online sweepstakes gaming.
A laundry list of state regulators have sent VGW (and others) a cease-and-desist order, alleging that dual-currency sweeps equate to unapproved forms of real-money gambling. Amid that regulatory enforcement action, as well as states such as New Jersey, Montana and Connecticut explicitly banning online sweepstakes gaming through legislation, VGW has scaled back or scrapped its offerings in around a dozen states. It ended Sweeps Coin play in New York in May amid the Empire State’s push to ban sweeps casinos and did the same in New Jersey in July shortly before the Garden State governor signed a prohibition into law.
All told, VGW has altered its operations in around a dozen states in the last year or so, also including Montana, Washington, Mississippi, Michigan, Louisiana, Connecticut, Delaware and Idaho.
In many of those states, VGW has ceased only its sweepstakes operations and still offers Gold Coins free play. But Canada, it seems, is just not worth its time or resources anymore.