The Louisiana Department of Revenue has filed lawsuits against major online sweepstakes casino operators Virtual Gaming Worlds (VGW) and MW Services, which operates as WOW Vegas, seeking a combined $44.4 million in unpaid taxes, interest, and penalties.
The suits accuse both companies of conducting business illegally in the state by offering online gambling products and failing to collect or remit applicable sales taxes. Gaming lawyer Daniel Wallach first reported the filings, which follow months of rising regulatory pressure on the sweepstakes gaming industry.
Legal Basis and Background
Although Senate Bill 181 – which aimed to ban sweepstakes casinos – was vetoed by Governor Jeff Landry, Louisiana Attorney General Liz Murrill issued a legal opinion in July reaffirming that such operations are illegal under existing law. Murrill noted that despite operating illegally, these businesses remain subject to tax laws and enforcement actions.
“They are still subject to Federal and State tax laws and liabilities,”she wrote, adding that operators may face litigation from agencies like the IRS and the Louisiana Department of Revenue.
VGW and WOW Vegas were among over 40 operators that previously received cease-and-desist letters from the Louisiana Gaming Control Board.
VGW Faces Largest Tax Claim
The Department of Revenue is demanding nearly $31 million from VGW, which includes $16.7 million in taxes, $5 million in interest, and over $9 million in penalties—ranging from late filings to tax understatements.
The state contends VGW did significant business in Louisiana by selling more than $100,000 worth of digital goods, which qualifies as taxable under state law. According to the lawsuit, VGW specifically targeted Louisiana residents through its Chumba Casino platform. In one email cited in the filing, VGW notified Louisiana players it was “phasing out Promotional Play (Sweeps Coins)” but that they could continue to use Gold Coins for Standard Play.
The department also pointed to VGW’s activity in other states, including the shutdown of Luckyland in Delaware and a phased withdrawal from New York. The lawsuit further mentions VGW’s efforts to promote legislation in California that would legalize sweepstakes gaming there.
WOW Vegas Also Targeted
The lawsuit against MW Services seeks $13.5 million—$7.5 million in unpaid taxes dating back to 2021, nearly $1.9 million in interest, and $4.1 million in penalties.
WOW Vegas ceased offering sweepstakes games in Louisiana on July 11, shortly after receiving a cease-and-desist order. The state claims the company marketed its products directly to Louisiana residents and generated significant revenue from them. In a player email, WOW confirmed it was halting operations in the state due to legal concerns.
Regulatory Ripple Effects
VGW, a founding member of the Social Gaming Leadership Alliance, has been actively lobbying across the U.S. to prevent bans on sweepstakes casinos. In July, the company began applying sales tax to purchases of Gold Coins in select states, including Arkansas and Illinois, signaling a shift in strategy amid growing regulatory scrutiny.
The lawsuits reflect Louisiana’s broader strategy to treat digital gaming tax compliance as a tool for enforcement. Additional legal actions against other operators may follow.
Source:
“Louisiana Department Of Revenue Sues VGW, WOW Vegas”, sports.yahoo.com, September 8, 2025
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