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Read Full BioLouisiana has filed a lawsuit against sweepstakes casino operators VGW and WOW Vegas for over $44 million in unpaid taxes. The state argues that virtual currency sold by the operators to Louisiana residents should have been subject to sales and use taxes.
Gambling law attorney Daniel Wallach posted the lawsuit, filed by the Louisiana Department of Revenue, on X. The document alleges that VGW owes the state $32,477,891.57, while WOW Vegas owes $13,551,351.36.
Previously, Louisiana’s Attorney General warned sweepstakes casino operators that they were “still subject to Federal and State tax laws and liabilities.” The lawsuit also notes that VGW has updated its terms to state that the purchase of Gold Coins may be subject to taxes.
However, it notes that despite admitting that purchases are subject to taxes, it has “failed to register with the Department or collect and/or remit any state or local sales tax from its operations in Louisiana.”
VGW’s Celebration of Vetoed Ban Short-Lived
Governor Jeff Landry vetoed a bill that would have explicitly banned sweepstakes gaming operators earlier this year. The Social Gaming Leadership Alliance (SGLA), which was formed by VGW, celebrated the decision as a victory for its members.
However, since the veto, the state has increased pressure on companies. Both VGW and WOW Vegas were among the 41 operators to receive cease-and-desist letters from the Louisiana Gaming Control Board in June.
Landry vetoed the bill, citing the powers the state already holds to target unregulated gambling. He wrote: “Our current Louisiana Gaming Control Board has the regulatory authority, control and jurisdiction over all aspects of gaming activities and operations pursuant to the Louisiana Gaming Control Law.”
The latest move to file lawsuits provides another means of targeting companies that have been able to operate in legal gray areas until now.
VGW & WOW Vegas Cease Operations
VGW heeded the call by the Gaming Control Board and ceased operations in the state back in July. The company behind Chumba Casino, Luckyland Slots, and Global Poker informed users that Sweeps Coins would be completely phased out by August 15.
Similarly, WOW Vegas pulled out of the state shortly after the cease-and-desist letter in June. It informed Louisiana users that it could not accept players from the state as of July 11.
Sweepstakes platforms are facing an increasing number of legal challenges in states across the country. VGW exited Canada and faces a lawsuit in California as a bill banning sweepstakes casinos makes progress.
The lawsuit, which was originally filed in Montana, aims to collect users from several states to emphasize that VGW is operating illegally across the country.
It pulled out of Canada, saying it will focus on US operations, but growing opposition means it has now withdrawn from 11 states, up from four last year. Even in states where VGW has ended operations, such as Louisiana, its legal troubles are not over.
