VGW AKA Global Poker Begins to Charge Sales Tax
Leading online sweepstakes gaming company VGW Holdings has started collecting sales tax on purchases of its virtual goods in the United States as of July 9, 2025. This decision affects the Global Poker brand as well as sister sites Chumba Casino and Luckyland Slots. VGW thus becomes the first major sweepstakes gaming firm to levy any kind of taxes on its customers.
Terms & Conditions Altered
This new policy by VGW is explained in a revision to the terms and conditions of the sites in question. From Global Poker's T&Cs:
Taxes
25.4. Under certain state laws, Gold Coin purchases may be subject to certain taxes, depending on your location. You agree your purchase of Gold Coins is made with the understanding that such tax will be added at the time of purchase. In jurisdictions where tax is not added by us at the time of purchase, you are solely responsible for any taxes applicable from your Participation, including transaction taxes (e.g. sales/use tax, value added taxes or digital sales taxes) applicable to your jurisdiction. Additionally, you are solely responsible for reporting any income and income taxes associated with winning valuable prizes.
VGW's Pioneering Sweepstakes Model
VGW was an innovator in using sweepstakes laws to get around anti-gambling legislation in the United States. It doesn't directly let users buy real money gaming chips at any of its sites. Rather, it sells them Gold Chips, which are basically play money and can never be redeemed for any real money prizes.
However, with their Gold Chip purchases, users are typically granted a limited number of Sweeps Coins “for free.” These Sweeps Coins can be used in designated poker and casino games, and after a low playthrough amount has been met, they can be redeemed for prizes that are basically equivalent to cash.
VGW has employed a number of tactics to disassociate Gold Chip purchases from Sweeps Coins rewards. For instance, some packages of Gold Chips do not grant any extra Sweeps. Furthermore, it's possible to obtain a small number of Sweeps by logging in daily and by completing a byzantine procedure involving the generation of online codes and submitting letters through the post.
VGW Running Into Legal Trouble
When VGW launched its first brand, Chumba Casino, in 2012, it could realistically claim to have found a unique workaround to the anti-gaming laws in all 50 states. However, the recent emergence of copycat competitors as well as legal developments in the past few years bring this assertion into serious doubt.
In 2018, a U.S. Court of Appeals ruled that social casinos violated Washington State law, and VGW abandoned the state shortly thereafter. In other instances, state leaders have communicated with VGW and demanded that the firm stop serving residents of the state. This is what happened in New York.
For reasons like these and others, VGW is now restricted from fully operating in 8 of the 50 states. The prospect of further limitations in its service area is imminent with, for example, Maryland claiming in March 2025 that the organization was breaking state law.
Effect on Players
The introduction of sales tax will undoubtedly have a negative impact on players at Global Poker. Although there are a few states without any sales tax, and so their residents will not be affected by Global's decision, most Americans will have to pay an extra amount of between 2.9% and 7.25% on their Gold Chips. Not only will they have to contend with recent changes in Federal tax law, but they will now have to win enough to overcome the state sales tax as well.
At competing offshore poker rooms, there's no sales tax charged at all. The closest they get to charging taxes on purchases are the fees levied on certain deposit methods, like credit cards. And these fees are avoidable by using free deposit methods, such as crypto-currency.
State-licensed online poker sites too are not required to collect sales tax. They do pay taxes to the various states in which they're licensed, but these are taxes on revenue and/or profits, and they're not borne by individual customers.
Therefore, VGW's recent move has the unusual result of making its product worse in this respect than virtually all of its competitors both domestic and international.
Why Make This Move at All?
Given the obvious negatives and the lack of any benefits associated with collecting sales tax, one might wonder why VGW has taken this seemingly self-defeating step. The answer lies in the enforcement actions that have been taken against the company recently.
A VGW spokesperson said:
We acknowledge this is a change for some of our players, but as the legal framework has evolved over time, we’ve determined it is the appropriate time to take this action.
By voluntarily starting to collect sales tax, VGW appears to be increasing its perceived value in the eyes of state regulators. Those states that are debating anti-sweepstakes gambling legislation would probably think twice if banning organizations like VGW would result in a substantial loss in tax revenue.
California is an especially interesting market because it's the largest state by population. There's a bill (AB 831) that has passed the California House and is working its way through the Senate, which would ban sweepstakes casino and poker operations. With its recent sales tax policy, VGW may be attempting to placate California lawmakers and thus persuade them to vote against the bill.
No Taxes With Offshore Sites
As we've already discussed, offshore poker rooms don't collect sales tax, which makes it that much easier to secure a profit. What's more, these kinds of organizations are perfectly legal to play at for the vast majority of Americans.
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July 16, 2025 – by Max Golden, Editor-in-Chief