Louisiana Targets Sweepstakes Casinos With $44 Million Tax Lawsuit

Louisiana has taken direct aim at sweepstakes-style online casinos, launching a lawsuit that could set the tone for how other U.S. states handle the sector.

Good to Know

• Louisiana is suing Virtual Gaming Worlds (VGW) and MW Services for nearly $44M in unpaid taxes.
• Allegations center on virtual currency sales and failure to remit state sales tax.
• Lawmakers already attempted to ban sweepstakes casinos earlier this year under SB 181.

According to filings, Louisiana claims VGW and MW Services failed to collect and remit sales tax on sales of their in-platform currencies. The penalties total nearly $44 million, with the state arguing that the companies had a clear duty to pay.

Gaming attorney Daniel Wallach explained that the case focuses on the way these platforms structure their business. Players purchase digital “Gold Coins,” which are bundled with bonus “Sweeps Coins.” Those Sweeps Coins can then be used in casino-style games and later redeemed for cash or gift card equivalents.

This lawsuit isn’t the first time Louisiana has challenged sweepstakes casinos. Back in April, Senator Adam Bass introduced Bill SB 181, designed to outlaw online gambling operations labeled as sweepstakes or social casinos. The bill explicitly targeted games that use dual-currency systems, where players buy one form of credit and receive a redeemable counterpart for cash prizes.

Though the bill didn’t become law because it got vetoed by Governor Jeff Landry, it showed where regulators’ attention was turning.

Attorney General Liz Murrill made the state’s position even clearer in July. In her words:

“Following a review of applicable Louisiana statutes and legal precedent, it is the opinion of this office that online businesses offering casino-style games – purporting to be sweepstakes or social gaming platforms – are operating in violation of Louisiana law.”

She added that despite being branded as promotions, these games still allow players to effectively purchase chances to win real money, which aligns with how Louisiana defines gambling.

VGW operates popular platforms such as Chumba Casino, LuckyLand Slots, and Global Poker—all of which are accessible across much of the United States.

Where Sweepstakes Casinos Stand in the U.S.

Here’s a quick overview of the current sweepstakes casino landscape across states. This is based on availability, legal notes, and known restrictions:

State	Status	Notes
California	Allowed	Large user base for Chumba and Global Poker
Texas	Allowed	No direct regulation, players widely active
Florida	Allowed	Access granted, though under legal review
New York	Allowed	Popular market for sweepstakes poker
Nevada	Restricted	Sweepstake model considered too close to gambling
Washington	Restricted	Specific ban on sweepstakes/social casinos
Louisiana	Under Legal Challenge	Facing lawsuit and legislative attempts to ban
Michigan	Allowed	Licensed iGaming already exists alongside sweepstakes
New Jersey	Allowed	Same as Michigan; operators still active
Other States	Generally Allowed	Most states still permit sweepstakes model

( Allowed = available, Restricted = banned, Under review = legal dispute or challenge ongoing)

The post Louisiana Targets Sweepstakes Casinos With $44 Million Tax Lawsuit appeared first on iGaming.org.