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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 sports betting.
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No, they weren't personally in attendance, however the world-famous celebs were notably included in a slide discussion on social and sweepstakes gambling establishments - the questionable websites offering both complimentary casino-style games and rewarding rewards, such as money, gift 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 market that now finds itself besieged by suits. In the eyes of many gaming corporations, not to discuss claim plaintiffs and state regulators, sweepstakes casinos act as traditional gambling establishments, just without the oversight, customer securities and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, however sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company deals with accusations of illegal gaming in a New york city suit that claims VGW utilizes celebrity endorsers to 'create a veneer of authenticity' around its product. (See VGW's statement 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 prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a variety of stars from sports betting 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 distinctions in between traditional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes casinos found online

Ryan Seacrest urges fans to dip into Chumba Casino, where many - however not all - games are totally free

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

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Instead, ads generally focus around the social element of the gambling establishments, while omitting the potential for actual gaming losses.

Others tempt customers with guarantees of prizes. One such operator, Stake, ran a social media advertisement displaying Drake's cars and trucks, planes and estates before rotating to video of the rapper playing online casino-style video games.

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

Another caption described: 'Because I never ever quit.'

The inconsistency between gaming sites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not involved with the previous.
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A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes casinos are playing for complimentary.

'Most social sweeps consumers never ever buy,' the SPGA representative told DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller than the common deposit or wager size at real-money online gaming sites.'

Social casinos provide consumers an opportunity to play casino-style games with pals. Players have the alternative to buy valueless currency typically referred to as 'gold coins,' which can not be exchanged genuine cash, however can be utilized to open various features within the video games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting clients 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 claimed by complainants in Florida, Georgia, New Jersey and New York. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to purchase more coins in pursuit of money and other things of worth.

The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event

Social sweeps gambling establishment Stake ran an advertisement showing off Drake's cars and trucks, 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 however 7 states, which has actually helped to fuel the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, enable customers to submit mail-in ask for complimentary sweeps coins, offered the players follow painfully specific directions. What's more, gamers are frequently rewarded with sweeps coins simply for signing up, thus providing a factor to try their hands at any variety of gambling establishment games for a possibility to win - or lose - genuine money.

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

According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competition is just a means of promoting their support.

'Social sweepstakes video games are merely a form of online home entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never need to spend for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is an essential difference in between social sweeps and standard online sports betting sites like casinos.'

Consider the manner in which McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and fries that offer them the possibility to win lucrative prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the game itself does not fulfill the meaning of gambling in the US.

'Sweepstakes are a long-standing technique for promoting all sort of daily services in the United States, everything from burgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are routinely utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're usually not connected to casino-style video games of opportunity,' Wallach informed DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the attributes typically related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payouts, normally 80 percent or more of incomes, whereas the common payment percentage for a short-term marketing sweepstakes is a minor share of the earnings earned by the business [generally less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the internet coffee shops that emerged in Florida, providing customers the chance 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 gaming.

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

Now, Wallach argues, social sweeps casinos must deal with comparable scrutiny.

'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have consistently been mentioned by courts and state attorney general of the United States as crucial elements in determining that a sweepstakes was in truth a guise for illegal sports betting.'

One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in many cases, enact new legislation on the problem.

'Consumers are being denied of protections and states are giving up significant tax and income opportunities as this gambling replaces that performed through regulated channels,' read a well-circulated AGA memo.

And then there are the plaintiffs who have taken legal action against social casinos 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 wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued lawsuits.

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

In the current suit, which is mostly comparable to its predecessors, New York 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 'prohibited gambling enterprise. '

Apple and Google have also been named as accuseds in claims for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's demand for comment.

'We typically do not discuss matters before the courts,' a VGW representative told DailyMail.com by means of e-mail. 'However, we note that this claim has actually only just been filed with the court and VGW has not been formally served.

'We have full confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a years, producing not just fantastic video games, user experiences and home entertainment, however also ensuring this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are relatively typical across the online social video games industry (and the US more broadly), and our basic practice is that we mean to vigorously safeguard any claim which might be brought against us.'

The issues in between traditional online gaming and sweepstakes casinos might prove problematic for some star endorsers.

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

'It's ironic that expert athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the same time the leagues desire to forecast a strong stance versus illegal sports betting - especially when attempting to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being taken legal action against for hosting allegedly prohibited sports betting websites

Regardless, Glaser sees sweepstakes gambling establishments as a significant issue for leagues such as the NBA.

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

Neither an NBA spokesperson nor the players' agents responded to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com e-mails.

Asked if their celeb endorsers have a duty to discuss to clients the differences and similarities between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that requires to be done.

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

Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.

'Celebrities who lend their names to shady prohibited sports betting websites are, at a minimum, putting their reputations at danger as well as courting civil and class actions by consumers who declare damage,' Glaser stated. 'There is likewise some danger that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for helping with unlawful gambling.'

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