Arizona’s top Democrats have for two years delayed enforcing legal action against an online gaming giant that has supported them politically.
But regulators acted swiftly to crack down on the company’s rivals.
Gov. Katie Hobbs and Arizona Attorney General Kris Mayes have publicly pursued unlicensed gambling operators, naming firms they say are operating illegally and successfully pressuring some to exit the state.
Meanwhile, the Democrats kept quiet about a 2024 effort to shut down Virtual Gaming Worlds, an Australia-based company that has donated handsomely to officials on both sides of the aisle. That includes campaign contributions totaling $200,000, given to groups supporting Hobbs and Mayes.
The company’s operations in Arizona have continued.
Virtual Gaming Worlds, owned by Australian billionaire Laurence Escalante and better known by the acronym VGW, has embarked on a seven-figure political influence campaign across the U.S. this year as regulators push back against its online platforms.
As they benefit from VGW's campaign funds, Hobbs and Mayes have offered no clear explanation for why Arizona regulators appeared to treat the company differently from its peers.
Hobbs' office oversees the Arizona Department of Gaming, which handles licensing and investigates reports of illegal activity. Mayes' office has the power to prosecute and advises the agency on legal matters. Spokespersons for the two Democrats have pointed to jurisdictional challenges and the complexity of financial crimes or cryptocurrency. Mayes also highlighted a lack of resources to pursue complex cases.
Their offices on Oct. 22 again offered limited statements that did not address why the Gaming Department's disciplinary action against VGW was kept behind closed doors, while similar cases played out in public.
Jessica Roza, a spokesperson for the Gaming Department, said the agency takes care not to jeopardize ongoing investigations when considering what information to disclose publicly.
“The absence of public announcements or disclosures regarding investigative and enforcement activities should not be interpreted as an absence of action by the Department, as disclosures can prematurely compromise those activities,” she wrote.
Christian Slater, a spokesperson for the governor, did not answer questions about how those considerations applied to VGW in particular, or why the agency appeared to treat VGW differently from other large, offshore operators.
“Don’t know what else there is to explain,” he said.
Mayes spokesperson Richie Taylor said the attorney general’s office has “no additional comments.”
Michael Bennet, a spokesperson for VGW, said the company has "made no requests to the Arizona Department of Gaming with regards to the publication of any media releases."
"As with all stakeholders, we have respectfully engaged in good faith with the Department and cannot speak to their actions or decisions with regards to this engagement or public communications," he wrote.
Regulators aggressively pursued other operators
As regulators’ case against VGW languished, they took aggressive action against other firms.
Stake.US, another large sweepstakes operator, was one of them.
Stake, which allows users to play with cryptocurrency alongside free-to-play offerings, has eroded VGW’s footprint in the U.S. and contributed to the company's tumbling market share in recent years, according to the Australian Financial Review.
Arizona regulators named Stake in a news release issued June 27, 2025, condemning the firm as part of a group of unlicensed operators that posed “serious risks to consumer protection and financial security across the state.” The announcement sparked a flurry of coverage from gaming industry news outlets.
“Illegal gambling, regardless of the platform or format, has no place in Arizona,” Gaming Department director Jackie Johnson said in the news release.
Stake announced it would exit Arizona on Aug. 12, 2025. The company now lists the state as one of its “excluded territories.”
It’s not clear why the Gaming Department chose to publicize the disciplinary action against Stake, but not VGW.
Both companies are major players in the sweepstakes gaming market, which allows users to play with virtual coins rather than real currency.
Both companies are based offshore. Stake’s international footprint stretches across Australia and Curaçao. VGW is headquartered in Australia and has affiliates in Malta.
Both companies were accused of engaging in the same list of crimes under Arizona law: felony promotion of gambling, illegal control of an enterprise, and money laundering.
Explaining regulators’ treatment of VGW, Slater said federal authorities are “best positioned” to address situations involving “transnational organizations that rely on cryptocurrency.”
Her office declined to say what federal laws or processes could be used to halt VGW’s activities, or why, if the matter was federal, state regulators initiated a disciplinary action.
The allegations come amid a brewing regulatory fight over sweepstakes gambling, which is not defined under Arizona law. VGW has also donated about $140,000 to the GOP's efforts to maintain control over the Arizona Legislature.
Stake has ties to Republicans. President Donald Trump has promoted Stake on social media, and the company's co-founder donated $1,000,000 to a political group aligned with the president in April, according to media reports.
Bennet, with VGW, said the U.S. social casino market remains "highly competitive."
"Where and how others choose to operate or the games they provide is a matter for them, but we have seen no change in the competitive intensity of the market," he wrote.
Republican opponents highlight 'culture of corruption'
The questions around VGW are politically sensitive for both Democrats. Mayes and Hobbs are both seeking support from Arizona’s tribes, which were guaranteed exclusive rights to many forms of gaming in a decades-old agreement.
Both are fending off attacks from their Republican opponents ahead of the Nov. 3 elections.
Hobbs' opponent, Rep. Andy Biggs, pointed to the VGW affair as evidence of a “culture of corruption” under the two Democrats. He referred to other allegations, surfaced by The Arizona Republic, that the governor’s administration granted a special rate increase for a group home operator as its CEO was touting his connection to Hobbs.
“From the taxpayer-funded, $4M pay raise to Sunshine Residential after hundreds of thousands of contributions to now protecting a foreign-owned company running an illegal gambling operation in our state, Hobbs and Mayes will do whatever their donors tell them to do,” Biggs told The Arizona Republic.
“Voters deserve full transparency about why Hobbs and Mayes have chosen to not enforce the law for another six-figure donor while everyday Arizonans struggle to afford their utility bills and rent.”
Mayes' opponent, Warren Petersen, has benefited from about $10,000 in spending by VGW, and has opposed Mayes' actions to prosecute betting giants like Kalshi. Still, he criticized her behavior.
“Mayes is cherry-picking the laws she wants to enforce and protecting her political allies, instead of standing up for Arizonans,” Petersen wrote. “As Attorney General, I will prosecute criminals regardless of their party, unlike my opponent, who has a record of politicizing her office and protecting her friends.”
Hobbs' campaign redirected the conversation to other campaign attacks.
Michael Beyer, communications director with Hobbs' campaign, said Biggs should "look in the mirror if he wants to tackle corruption," accusing the congressman of a "toxic record of covering for a corrupt pedophile cult and scheming to overturn Arizona's 2020 election results."
Delaney Corcoran, a spokesperson for Mayes, highlighted Petersen's opposition to prosecuting prediction markets.
"Attorney General Mayes has been laser focused on holding predictive markets and illegal gambling operators accountable, while Warren Petersen shamelessly tells these companies he wouldn't enforce Arizona law in a desperate attempt to direct these special interests to fund his flailing campaign," she wrote.
Laura Gersony covers politics for The Arizona Republic. Contact her at Laura.Gersony@usatodayco.com or 480-372-0389.
This article originally appeared on Arizona Republic: Arizona accommodated gaming megadonor while cracking down on its rivals
