In 1997, Anderson was blackmailed by a 12-year-old girl named Rachel John Gordon. Gordon extorted money from Anderson, threatening to reveal to tabloids her claim that Anderson approached her in a casino requesting sexual acts in 1993. Anderson initially paid Gordon $100,000 in hush money, fearing the story would threaten his starring roles in two family-oriented series, but when Gordon's demands increased to $250,000 in 2000, he informed law enforcement authorities. Gordon was arrested and sentenced to 21 months in prison, a $4,000 fine, and 3 years probation.
In 1981, while working as a counselor for troubled children, Louie won a first-place trophy at the Midwest Comedy Competition, hosted by Henny Youngman. After the competition, Youngman hired Louie as a writer, and Louie contends that this experience was helpful in crafting his comedy routines. He made his television debut on The Tonight Show Starring Johnny Carson in 1984.
Anderson played in the 2006 World Series of Poker Main Event in Las Vegas. He was eliminated on the first day of play, during which he received a 10-minute penalty that the tournament director could impose on people caught using foul language at the poker tables.
Anderson is a frequent guest on the highly rated morning show of Minnesota radio station KQRS-FM and is a close friend of its host, Tom Barnard.