The smiling faces of Paris Hilton and Ryan Seacrest made surprise looks before the Louisiana Senate for Friday's hearing on unlawful gambling.
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No, they weren't personally in participation, but the world-famous stars were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the questionable sites providing both free casino-style games and financially rewarding rewards, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody 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 just 2 cogs in the multibillion-dollar market that now discovers itself besieged by suits. In the eyes of many gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes gambling establishments act as conventional casinos, only without the oversight, consumer securities and tax laws. So not only can they prevent the steep 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with accusations of prohibited sports betting in a New York suit that claims VGW uses celeb endorsers to 'develop a veneer of authenticity' around its product. (See VGW's statement below)

'I'm not exactly sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar unlawful 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 series of celebrities 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 provide any differences in between conventional gambling and sweepstakes play.

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

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

Drake has a handle social sweeps casino, Stake, that he routinely promotes on social media

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

Others lure customers with pledges of prizes. One such operator, Stake, ran a social media advertisement showing off Drake's cars, airplanes and mansions before rotating to video footage of the rapper playing online casino-style games.

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

Another caption explained: 'Because I never quit.'

The inconsistency between gaming sites and social or sweepstakes casinos is a bit complex, but operators of the latter insist they're not involved with the previous.

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

'Most social sweeps consumers never purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller than the normal deposit or wager size at real-money online gambling sites.'

Social gambling establishments offer customers an opportunity to play casino-style video games with friends. Players have the alternative to buy valueless currency often described as 'gold coins,' which can not be exchanged for genuine money, but can be utilized to unlock different functions within the games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to get other currency referred to as 'sweeps coins' that can be exchanged for money or other prizes.

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

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

Social sweeps casino Stake ran an ad displaying Drake's vehicles, airplanes and mansions

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

Traditional online casinos are prohibited in all however seven 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 need usually need recognition. However, like Chumba will ask for IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to submit mail-in ask for free sweeps coins, offered the gamers follow painfully specific guidelines. What's more, gamers are often rewarded with sweeps coins simply for signing up, thereby providing them a reason to attempt their hands at any number of casino games for a chance to win - or lose - real money.

So why are sweepstakes websites enabled to operate in 48 states, while online casinos are prohibited in all but 7?

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

'Social sweepstakes games are just a type of online entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is needed to dip into social casinos with sweepstakes rewards. Consumers never ever need to spend for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is a vital distinction in between social sweeps and traditional online gaming websites like gambling establishments.'

Consider the method that McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that use them the possibility to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the video game itself does not meet the meaning of gaming in the US.

'Sweepstakes are a long-standing technique for promoting all kinds of everyday services in the United States, everything from hamburgers to publication memberships to coffee and home enhancement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct beginning and end, thereby recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote real products like fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're normally not connected to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [gambling establishments] have none of the attributes commonly associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos offer" casino-like" payments, typically 80 percent or more of incomes, whereas the typical payment portion for a short-lived promotional sweepstakes is an insignificant share of the revenue made by the business [generally less than one percent]'

Wallach is quick to compare the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, using consumers the chance to play casino-style games for genuine prizes. A lot of those brick-and-mortar establishments have actually since been shuttered over allegations of unlawful gambling.

DJ Khaled is amongst a number of celebrity spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos must face similar scrutiny.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been cited by courts and state attorney general of the United States as crucial consider identifying that a sweepstakes promotion was in reality a guise for unlawful gambling.'

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

'Consumers are being deprived of securities and states are forgoing substantial tax and revenue opportunities as this gaming changes that performed through controlled channels,' read a well-circulated AGA memo.
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And after that there are the complainants 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 four different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, saying the settlement was made to prevent legal costs and continued litigation.

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

In the current lawsuit, which is mainly comparable to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gambling enterprise. '

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

'We generally don't talk about matters before the courts,' a VGW representative told DailyMail.com via email. 'However, we note that this claim has only simply been filed with the court and VGW has not been formally served.

'We have full self-confidence in our compliance with all laws and policies where we run, and stay positive about the future,' the representative continued. 'We continue to offer our free-to-play video games across many of The United States and Canada, as we have for more than a years, developing not only excellent video games, user experiences and entertainment, but also ensuring this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are reasonably typical throughout the online social video games market (and the US more broadly), and our basic practice is that we intend to vigorously protect any claim which might be brought versus us.'

The issues in between traditional online sports betting and sweepstakes casinos might prove problematic for some celebrity endorsers.

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

'It's ironic that professional athletes are hawking unlawful sports betting 'sweeps' sites while at the exact same time the leagues want to predict a strong stance against prohibited gambling - especially when attempting to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

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

Along with VGW, Apple and Google are being demanded hosting allegedly unlawful gambling websites

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

'I 'd anticipate that a league crackdown on professional athletes backing sweepstakes sites refers when, not if,' Glaser included.

Neither an NBA spokesman nor the players' agents reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to respond to DailyMail.com emails.

Asked if their celeb endorsers have a duty to explain to customers the distinctions and resemblances between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that needs to be done.
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'We have complete confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative stated. 'A few of our worths are" our gamers come initially" and" we do what's right", and we put our worths at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who provide their names to shady unlawful gambling sites are, at a minimum, putting their track records at threat as well as courting civil and class actions by consumers who declare damage,' Glaser said. 'There is likewise some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for assisting in prohibited gaming.'

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