VGW and MW Services Face Significant Tax Claims from Louisiana Revenue Department
Louisiana Revenue Department Targets Sweepstakes Operators VGW and MW Services
The Louisiana Department of Revenue has initiated legal proceedings against two major sweepstakes companies, VGW and MW Services, demanding payment of back taxes. Both companies, known for operating sweepstakes-based platforms, are now being held accountable for substantial unpaid tax liabilities.
Legal Authorization Enables Tax Recovery Efforts
Following a written opinion issued by Attorney General Liz Murrill, the department has the legal grounds to pursue up to $44.4 million in unpaid taxes, including accrued interest and penalties. The department alleges that these companies have been profiting from their sweepstakes operations and are therefore subject to both federal and state tax obligations.
The Revenue Department emphasized that these entities could face enforcement actions not only from the state but also the Internal Revenue Service and other regulatory bodies.
It was reported that the companies sold over $100,000 worth of tangible personal property, which included digital goods, to residents of Louisiana, making them liable for tax payments under state law.
The department’s claim initially targets $30.9 million in taxes and fees from VGW. It also suggested that VGW might have been structuring its operations to comply narrowly with local laws, aiming to meet regulatory requirements while continuing business.
Evidence presented includes communications from Chumba, a VGW brand, which informed users in Louisiana about restrictions on the use of certain digital currency within their platform.
Tax Obligations Arise from Doing Business in Louisiana
The department stated that VGW generated as much as $250,000 per month in revenue within Louisiana since starting operations in July 2019. Due taxes for VGW amount to $16.7 million, but interest has brought the total to nearly $30.9 million.
Regarding MW Services, the department is pursuing approximately $13.5 million in total. This includes $7.5 million owed through January 2021, an additional $1.9 million due by the end of December 2024, and penalties approximately totaling $4.1 million.
MW Services reportedly acknowledged operating in Louisiana and ceased its business activities after receiving a cease-and-desist order from the Revenue Department.
