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The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on illegal gaming.
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No, they weren't personally in attendance, however the world-famous celebs were notably consisted of in a slide presentation on social and sweepstakes casinos - the controversial websites providing both complimentary casino-style games and rewarding rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The sites are simply two cogs in the multibillion-dollar industry that now finds itself besieged by suits. In the eyes of lots of gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes gambling establishments function as standard casinos, only without the oversight, customer protections and tax laws. So not only can they prevent the high 24-percent federal sports betting levy, but sweepstakes operators aren't subject to regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the company faces accusations of prohibited gambling in a New york city lawsuit that claims VGW utilizes star endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's declaration listed below)

'I'm not sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between standard sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among many sweepstakes casinos 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 media

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Instead, ads typically focus around the social element of the gambling establishments, while leaving out the potential for real gaming losses.

Others lure consumers with promises of prizes. One such operator, Stake, ran a social networks ad showing off Drake's cars and trucks, airplanes and estates before rotating to footage of the rap artist playing online casino-style games.

'Daddy, why do we have a lot cash?' check out the very first caption on the screen.

Another caption described: 'Because I never provided up.'

The inconsistency between gambling websites and social or sweepstakes gambling establishments is a bit complex, however operators of the latter insist they're not involved with the previous.

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, the majority of the gamers on social-sweepstakes gambling establishments are playing for complimentary.
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'Most social sweeps clients never ever buy,' the SPGA spokesperson told DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the typical deposit or wager size at real-money online gambling websites.'

Social gambling establishments provide clients a chance to play casino-style games with buddies. Players have the choice to buy worthless currency often described as 'gold coins,' which can not be exchanged for genuine cash, however can be utilized to open different functions within the games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing customers to obtain other currency called 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the capacity for monetary losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to buy more coins in pursuit of cash and other things of worth.

The Philadelphia 76ers' Paul George is seen promoting an International Poker event

Social sweeps gambling establishment Stake ran an ad showing off Drake's vehicles, aircrafts and mansions

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

Traditional online gambling establishments are banned in all however seven states, which has assisted to sustain the popularity of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, allow customers to send mail-in demands for totally free sweeps coins, supplied the players follow painfully particular guidelines. What's more, players are frequently rewarded with sweeps coins merely for registering, thereby providing a reason to try their hands at any number of gambling establishment games for a chance to win - or lose - genuine money.

So why are sweepstakes websites enabled to operate in 48 states, while online gambling establishments are banned in all however 7?

According to the stakeholders, their product is the totally free casino-style video gaming, and the real-stakes competitors is merely a method of promoting their support.

'Social sweepstakes games are merely a kind of online entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never need to spend for a chance to win prizes. That lack of a purchase requirement - or" factor to consider" - is a crucial distinction in between social sweeps and standard online gaming sites like gambling establishments.'

Think about the manner in which McDonald's uses its video game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and french fries that provide them the possibility to win lucrative rewards, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself doesn't meet the meaning of gaming in the US.

'Sweepstakes are an enduring method for promoting all kinds of daily companies in the United States, whatever from burgers to publication memberships to coffee and home improvement stores,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market experts, that argument doesn't cut it.

For beginners, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined start and end, thus suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're generally not connected to casino-style games of possibility,' Wallach informed DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [casinos] possess none of the qualities frequently connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos offer" casino-like" payouts, normally 80 percent or more of revenues, whereas the common payout portion for a short-term promotional sweepstakes is an insignificant share of the income made by the company [normally less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the internet coffee shops that sprang up in Florida, providing clients the chance to play casino-style video games for real rewards. Many of those brick-and-mortar establishments have actually given that been shuttered over claims of unlawful gambling.

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

Now, Wallach argues, social sweeps gambling establishments should deal with similar analysis.

'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have actually consistently been cited by courts and state attorney general of the United States as essential factors in figuring out that a sweepstakes promotion remained in truth a guise for unlawful sports betting.'

One of the gambling establishment market's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact new legislation on the problem.

'Consumers are being deprived of securities and states are giving up considerable tax and revenue chances as this gambling replaces that carried out through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs who have sued social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal expenses and continued lawsuits.

Michael Phelps has signed an offer with the VGW Group, which owns Global Poker

In the most current lawsuit, which is mainly similar to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal sports betting enterprise. '

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

'We usually don't discuss matters before the courts,' a VGW representative informed DailyMail.com via email. 'However, we note that this claim has only just been submitted with the court and VGW has not been officially served.
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'We have full self-confidence in our compliance with all laws and regulations where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games across the majority of North America, as we have for more than a years, producing not only excellent video games, user experiences and home entertainment, but likewise guaranteeing this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are relatively typical throughout the online social video games market (and the US more broadly), and our standard practice is that we mean to intensely defend any claim which might be brought versus us.'

The issues between traditional online gambling and sweepstakes gambling establishments might show problematic for some celeb 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 conventional gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking illegal sports betting wagering 'sweeps' sites while at the same time the leagues wish to predict a strong position against prohibited gaming - particularly when attempting to tamp down the periodic gambling scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being sued for hosting supposedly illegal sports betting sites

Regardless, Glaser sees sweepstakes casinos as a major concern for leagues such as the NBA.

'I 'd expect 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 requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com e-mails.

Asked if their star endorsers have an obligation to discuss to consumers the distinctions and similarities between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative stated. 'Some of our worths are" our players precede" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes sites, sees things differently.
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'Celebrities who provide their names to dubious illegal gambling sites are, at a minimum, putting their reputations at threat in addition to courting civil and class actions by consumers who declare damage,' Glaser stated. 'There is also some danger that state regulators and state chief law officers rope celeb endorsers into enforcement efforts for facilitating illegal sports betting.'

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