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The smiling faces of Paris Hilton and Ryan Seacrest made surprise looks before the Louisiana Senate for Friday's hearing on prohibited gambling.
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No, they weren't personally in attendance, however the world-famous stars were conspicuously included in a slide discussion on social and sweepstakes casinos - the controversial websites offering both totally free casino-style video games and profitable prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by claims. In the eyes of many gaming corporations, not to point out lawsuit complainants and state regulators, sweepstakes casinos act as standard casinos, only without the oversight, consumer securities and tax laws. So not only can they avoid the high 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulatory hurdles 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 accusations of prohibited gambling in a New york city claim that claims VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's statement below)

'I'm not exactly sure" if you do not trust us, you can trust 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 video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of stars from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between traditional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes gambling establishments found online

Ryan Seacrest urges fans to play at Chumba Casino, where many - but not all - games are complimentary

Drake has an offer with social sweeps gambling establishment, Stake, that he frequently promotes on social networks

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Instead, advertisements typically focus around the social element of the casinos, while leaving out the capacity for real sports betting losses.

Others lure customers with promises of prizes. One such operator, Stake, ran a social networks advertisement flaunting Drake's cars, planes and estates before pivoting to footage of the rapper 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 offered up.'

The inconsistency in between gambling websites and social or sweepstakes gambling establishments is a bit complex, but operators of the latter insist they're not included with the former.

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

'Most social sweeps customers never purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller sized than the typical deposit or bet size at real-money online sports betting websites.'

Social casinos offer clients a possibility to play casino-style games with buddies. Players have the option to buy valueless currency typically described as 'gold coins,' which can not be exchanged for genuine money, but can be utilized to unlock numerous functions within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting customers to obtain other currency understood as 'sweeps coins' that can be exchanged for cash or other prizes.

And therein lies the capacity for monetary losses, like the ones declared by plaintiffs 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 a Worldwide Poker occasion

Social sweeps casino Stake ran an advertisement revealing off Drake's vehicles, aircrafts and estates

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

Traditional online gambling establishments are prohibited in all but 7 states, which has assisted to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, allow consumers to submit mail-in requests for free sweeps coins, offered the players follow painfully particular directions. What's more, gamers are frequently rewarded with sweeps coins just for signing up, therefore offering them a reason to attempt their hands at any variety of gambling establishment video games for an opportunity to win - or lose - real cash.

So why are sweepstakes sites permitted to operate in 48 states, while online gambling establishments are banned in all but 7?

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

'Social sweepstakes games are merely a type of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to play at social gambling establishments with sweepstakes prizes. Consumers never ever have to spend for a chance to win rewards. That lack of a purchase requirement - or" factor to consider" - is a crucial difference in between social sweeps and traditional online sports betting websites like casinos.'

Consider the manner in which McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and french fries that use them the chance to win financially rewarding prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself does not fulfill the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all type of everyday businesses in the United States, whatever from hamburgers to publication subscriptions to coffee and home enhancement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

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

'They do not last forever and they're generally not connected to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [casinos] have none of the attributes commonly associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, typically 80 percent or more of profits, whereas the common payment percentage for a temporary promotional sweepstakes is a minor share of the profits earned by the business [normally less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, using customers the opportunity to play casino-style games for real prizes. A number of those brick-and-mortar establishments have given that been shuttered over accusations of illegal gaming.

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

Now, Wallach argues, social sweeps casinos ought to deal with comparable examination.
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'These differences are not arbitrary,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been cited by courts and state chief law officer as essential aspects in figuring out that a sweepstakes promo was in fact a guise for unlawful gambling.'

One of the casino market's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, sometimes, enact new legislation on the concern.

'Consumers are being denied of defenses and states are passing up significant tax and revenue opportunities as this gambling changes that carried out through controlled channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have sued social in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, stating the settlement was made to prevent legal expenses and continued litigation.

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

In the current suit, which is mostly similar to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gambling business. '

Apple and Google have actually also been named as offenders in claims for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for remark.

'We usually don't talk about matters before the courts,' a VGW representative informed DailyMail.com through e-mail. 'However, we keep in mind that this claim has only just been filed with the court and VGW has actually not been formally served.

'We have complete confidence in our compliance with all laws and regulations where we run, and remain confident about the future,' the spokesperson continued. 'We continue to use our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a decade, creating not only excellent games, user experiences and home entertainment, but also ensuring this is done securely, responsibly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are fairly common throughout the online social games market (and the US more broadly), and our basic practice is that we plan to vigorously protect any claim which may be brought against us.'

The issues between standard online sports betting and sweepstakes gambling establishments might prove bothersome for some star 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 gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' websites while at the same time the leagues wish to predict a strong position against illegal sports betting - particularly when trying to tamp down the periodic sports betting scandal,' Glaser informed 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 gamblers. 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 apparently prohibited gambling sites

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

'I 'd anticipate that a league crackdown on athletes endorsing sweepstakes websites refers when, not if,' Glaser included.

Neither an NBA spokesman nor the gamers' representatives reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com emails.

Asked if their celebrity endorsers have an obligation to discuss to customers the differences and resemblances between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative said. 'A few of our values are" our players come first" and" we do what's right", and we put our values 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 shady illegal sports betting 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 risk that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for assisting in illegal sports betting.'

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