VGW & WOW Vegas hit with $44M lawsuit in Louisiana

The move marks a major escalation in the state’s campaign against what it views as illegal online gambling operations, and it raises a larger question for players and operators alike: Can sweepstakes casinos withstand this growing wave of scrutiny?

Louisiana turns tax law into a weapon

Sweepstakes casinos have thrived in a gray zone, not calling themselves gambling sites but running on a dual-currency system. Players buy ‘Gold Coins’ to play for fun and receive ‘Sweeps Coins’ as a bonus, which can be redeemed for real cash.

Regulators say that’s gambling by another name, and Louisiana now wants back taxes on every dollar spent. 

Here’s the breakdown of what the state is chasing:

• VGW Holdings: $30.5 million claimed (including $16.7M in taxes, plus interest and penalties)

• MW Services (WOW Vegas): $13.6 million claimed (including $7.5M in taxes, plus interest and penalties)

Operator	Taxes Owed	Interest & Penalties	Total Claim
VGW Holdings	$16.7M	$13.8M	$30.5M
MW Services	$7.5M	$6.1M	$13.6M
Total	—	—	$44.1M

The lawsuits follow a July opinion from Attorney General Liz Murrill declaring sweepstakes casinos illegal gambling under state law. 

While Governor Jeff Landry vetoed a bill banning them outright, the state is now using tax law as a powerful hammer.

What has been the industry reaction?

Neither VGW nor MW Services have commented publicly, but both have since exited Louisiana. 

VGW phased out Sweeps Coins in the state this summer, while WOW Vegas cut off Louisiana players in July after receiving a cease-and-desist order.

VGW recently updated its terms of service to acknowledge state sales taxes on Gold Coin purchases, but has yet to register or remit in Louisiana.

The silence speaks volumes. Operators know that once one state proves coin sales are taxable, the domino effect could be brutal.

Could other states follow Louisiana’s lead?

The lawsuit could have ripple effects across the country. 

By framing virtual coin sales as taxable retail transactions, Louisiana may be offering other states a blueprint for reclaiming lost revenue from sweepstakes casinos.

And the timing is brutal for operators. 

Alongside tax claims and class-action lawsuits, the industry was dealt another blow when Pragmatic Play pulled its games from sweepstakes platforms.

Is survival in question?

Sweepstakes casinos have survived up to now on their ability to occupy a legal loophole. 

But between regulators, tax authorities, and suppliers walking away, the loophole is narrowing fast.

For players, that means fewer games and fewer places to play. For operators, it means mounting costs and shrinking markets.

Louisiana’s $44M lawsuit isn’t just about one state reclaiming lost tax dollars, but rather the clearest signal yet that the sweepstakes model’s days could be numbered.