The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on unlawful gambling.
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No, they weren't personally in attendance, however the world-famous stars were notably consisted of in a slide discussion on social and sweepstakes casinos - the questionable sites using both complimentary casino-style games and lucrative rewards, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are just 2 cogs in the multibillion-dollar market that now discovers itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos function as traditional casinos, only without the oversight, consumer securities and tax laws. So not only can they prevent the steep 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with allegations of illegal sports betting in a New York claim that claims VGW utilizes celebrity endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration below)
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'I'm not exactly sure" if you don't trust us, you can trust Paris Hilton" is a winning message for business running multibillion-dollar prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a variety of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any differences in between standard gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to play at Chumba Casino, where many - however not all - video games are free

Drake has a handle social sweeps casino, Stake, that he frequently touts on social networks

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Instead, advertisements usually center around the social aspect of the casinos, while omitting the potential for real sports betting losses.

Others tempt clients with promises of prizes. One such operator, Stake, ran a social networks advertisement displaying Drake's vehicles, planes and estates before rotating to video footage of the rap artist playing online casino-style games.

'Daddy, why do we have so much cash?' read the very first caption on the screen.

Another caption discussed: 'Because I never gave up.'

The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit complex, however operators of the latter insist they're not included with the former.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes casinos are playing for totally free.

sweeps consumers never ever purchase,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller than the typical deposit or wager size at real-money online gaming sites.'

Social gambling establishments provide clients an opportunity to play casino-style video games with good friends. Players have the option to purchase valueless currency often referred to as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to open different features within the games.

But within the world of social casinos exists sweepstakes gaming, permitting consumers to obtain other currency called 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the potential for monetary losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York City. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to buy more coins in pursuit of money and other things of worth.

The Philadelphia 76ers' Paul George is seen promoting a Global Poker occasion

Social sweeps gambling establishment Stake ran an ad flaunting Drake's cars and trucks, airplanes and estates

Karl-Anthony Towns of the New York City Knicks is another NBA star plugging VGW's Global Poker

Traditional online casinos are banned in all however 7 states, which has assisted to sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which don't need typically need recognition. However, sites like Chumba will request IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, allow customers to send mail-in demands for free sweeps coins, provided the players follow painfully specific instructions. What's more, gamers are frequently rewarded with sweeps coins just for registering, consequently providing a factor to attempt their hands at any number of gambling establishment video games for an opportunity to win - or lose - real cash.

So why are sweepstakes websites allowed to run in 48 states, while online casinos are banned in all but 7?

According to the stakeholders, their product is the complimentary casino-style video gaming, and the real-stakes competition is simply a method of promoting their bread and butter.
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'Social sweepstakes video games are merely a form of online home entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never have to spend for a chance to win rewards. That lack of a purchase requirement - or" factor to consider" - is an essential distinction in between social sweeps and standard online sports betting sites like casinos.'

Think about the method that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that use them the possibility to win financially rewarding prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself doesn't satisfy the meaning of gaming in the US.

'Sweepstakes are an enduring method for promoting all type of everyday companies in the United States, whatever from hamburgers to magazine memberships to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are routinely utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling industry experts, that argument does not cut it.

For starters, gaming attorney Daniel Wallach mentions, McDonald's Monopoly game does not run indefinitely. Rather, it has a well-defined start and end, consequently suggesting the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're typically not connected to casino-style games of chance,' Wallach informed DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [casinos] have none of the attributes commonly associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payments, generally 80 percent or more of earnings, whereas the common payout percentage for a temporary advertising sweepstakes is a trivial share of the profits earned by the company [generally less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the internet coffee shops that sprang up in Florida, offering consumers the opportunity to play casino-style video games for genuine rewards. A lot of those brick-and-mortar facilities have because been shuttered over accusations of unlawful sports betting.

DJ Khaled is among numerous celeb spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos need to face comparable analysis.

'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have repeatedly been pointed out by courts and state attorney general of the United States as crucial consider figuring out that a sweepstakes promo remained in truth a guise for unlawful gambling.'

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, sometimes, enact new legislation on the problem.

'Consumers are being deprived of defenses and states are passing up considerable tax and profits opportunities as this gambling changes that conducted through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have actually taken legal action against social gambling establishments in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal costs and continued lawsuits.

Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the most recent lawsuit, which is mostly similar to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gaming enterprise. '

Apple and Google have likewise been named as offenders in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for comment.

'We normally do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com by means of email. 'However, we note that this claim has actually only just been submitted with the court and VGW has actually not been officially served.

'We have full confidence in our compliance with all laws and guidelines where we operate, and remain positive about the future,' the representative continued. 'We continue to use our free-to-play games throughout the majority of North America, as we have for more than a years, creating not only great video games, user experiences and home entertainment, however likewise ensuring this is done safely, properly and at the highest level of requirements.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are reasonably typical across the online social games market (and the US more broadly), and our standard practice is that we intend to vigorously safeguard any claim which may be brought versus us.'

The issues between conventional online gaming and sweepstakes gambling establishments might show troublesome for some celebrity endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand while the NBA is partnered with traditional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking prohibited sports betting 'sweeps' websites while at the very same time the leagues want to forecast a strong position against prohibited gambling - especially when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime restriction from the NBA over claims he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes gambling establishments.

Together with VGW, Apple and Google are being demanded hosting presumably unlawful gambling websites

Regardless, Glaser sees sweepstakes casinos as a significant problem for leagues such as the NBA.
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'I 'd anticipate that a league crackdown on athletes backing sweepstakes websites refers when, not if,' Glaser added.

Neither an NBA spokesman nor the gamers' agents responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com e-mails.

Asked if their celebrity endorsers have a responsibility to explain to clients the distinctions and resemblances in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the spokesperson said. 'Some of our values are" our gamers precede" and" we do what's right", and we put our worths at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes websites, sees things differently.
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'Celebrities who provide their names to shady illegal gambling websites are, at a minimum, putting their reputations at risk as well as courting civil and class actions by consumers who declare damage,' Glaser said. 'There is also some threat that state regulators and state lawyers general rope celeb endorsers into enforcement efforts for assisting in prohibited gambling.'

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