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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 illegal gaming.

No, they weren't personally in presence, but the world-famous celebrities were notably consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites using both free casino-style video games and lucrative rewards, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone 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 just 2 cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of lots of gaming corporations, not to mention lawsuit plaintiffs and state regulators, sweepstakes casinos act as standard gambling establishments, only without the oversight, consumer defenses and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company faces allegations of illegal sports betting in a New york city suit that declares VGW uses celebrity endorsers to 'create a veneer of authenticity' around its item. (See VGW's statement listed below)

'I'm not sure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar illegal 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 include a variety of celebrities 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 provide any distinctions in between conventional gambling and sweepstakes play.

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

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

Drake has a deal with social sweeps gambling establishment, Stake, that he regularly touts on social media
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Instead, advertisements generally center around the social aspect of the casinos, while omitting the potential for actual gaming losses.

Others tempt consumers with guarantees of prizes. One such operator, Stake, ran a social media advertisement revealing off Drake's vehicles, aircrafts and mansions before pivoting to video footage of the rap artist playing online casino-style video games.

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

Another caption discussed: 'Because I never ever offered up.'

The disparity in between sports betting websites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not involved with the previous.

A spokesperson for an industry 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.

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

Social gambling establishments provide customers a possibility to play casino-style games with friends. Players have the option to buy worthless currency frequently referred to as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to unlock different features within the video games.

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

And therein lies the potential for financial losses, like the ones claimed 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 buy more coins in pursuit of money and other things of value.

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

Social sweeps casino Stake ran an advertisement revealing off Drake's cars and trucks, planes 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 but 7 states, which has assisted to sustain the appeal of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable consumers to send mail-in requests for free sweeps coins, provided the players follow painfully specific directions. What's more, players are frequently rewarded with sweeps coins merely for signing up, thereby providing a reason to try their hands at any number of casino games for a chance to win - or lose - genuine money.

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

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

'Social sweepstakes games are simply a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never ever need to spend for a chance to win prizes. That absence of a purchase requirement - or" factor to consider" - is a crucial distinction between social sweeps and standard online sports betting sites like gambling establishments.'

Think of the manner in which McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and fries that provide them the chance to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the game itself doesn't 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 burgers to publication subscriptions to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions 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 attorney Daniel Wallach mentions, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a distinct beginning and end, thereby suggesting the is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real items like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're normally not connected to casino-style games of possibility,' Wallach told DailyMail.com. 'They're just money free gifts.

'The sweepstakes [gambling establishments] possess none of the qualities typically related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payments, typically 80 percent or more of incomes, whereas the common payment portion for a short-lived promotional sweepstakes is an unimportant share of the revenue earned by the business [usually less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the web cafes that emerged in Florida, offering clients the chance to play casino-style games for real rewards. Much of those brick-and-mortar facilities have since been shuttered over allegations of unlawful gambling.

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

Now, Wallach argues, social sweeps gambling establishments ought to face similar analysis.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been pointed out by courts and state attorney generals as essential elements in identifying that a sweepstakes promotion was in fact a guise for illegal sports betting.'

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in many cases, enact brand-new legislation on the issue.

'Consumers are being deprived of defenses and states are giving up substantial tax and earnings chances as this sports betting changes that carried out through controlled channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have actually sued 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 confessing any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to prevent legal expenses and continued litigation.
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Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the most current suit, which is mainly comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal gaming business. '

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

'We usually don't comment on matters before the courts,' a VGW spokesperson told DailyMail.com by means of email. '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 guidelines where we operate, and remain confident about the future,' the representative continued. 'We continue to provide our free-to-play games across the majority of North America, as we have for more than a decade, creating not only terrific games, user experiences and entertainment, but likewise ensuring this is done securely, properly and at the highest level of standards.
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'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly typical throughout the online social video games market (and the US more broadly), and our basic practice is that we mean to intensely protect any claim which may be brought versus us.'

The concerns between standard online sports betting and sweepstakes gambling establishments might prove troublesome 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 gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' sites while at the same time the leagues want to predict a strong stance versus illegal sports betting - especially when trying to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received 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.

Together with VGW, Apple and Google are being demanded hosting apparently unlawful gambling sites

Regardless, Glaser sees sweepstakes casinos as a significant problem for leagues such as the NBA.

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

Neither an NBA spokesman nor the gamers' 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 star endorsers have an obligation to describe to clients the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that needs to be done.

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

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.
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'Celebrities who lend their names to dubious prohibited gaming sites are, at a minimum, putting their reputations at threat as well as courting civil and class actions by customers who declare damage,' Glaser stated. 'There is likewise some risk that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for facilitating prohibited gaming.'

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