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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 unlawful gaming.
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No, they weren't personally in participation, but the world-famous celebrities were conspicuously included in a slide discussion on social and sweepstakes casinos - the questionable sites providing both complimentary 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 'bet totally free,' 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 industry that now finds itself besieged by claims. In the eyes of many gaming corporations, not to discuss suit complainants and state regulators, sweepstakes casinos act as standard casinos, just without the oversight, customer securities and tax laws. So not only can they avoid the high 24-percent levy, however sweepstakes operators aren't based on regulative 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 business deals with allegations of illegal gaming in a New York claim that claims VGW utilizes celeb endorsers to 'create a veneer of legitimacy' around its item. (See VGW's declaration listed below)

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

Sweepstakes endorsers include a variety of celebs 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 provide any distinctions in between traditional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments discovered online
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Ryan Seacrest urges fans to play at Chumba Casino, where lots of - however not all - video games are totally free

Drake has a deal with social sweeps casino, Stake, that he regularly promotes on social media

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Instead, advertisements generally center around the social element of the gambling establishments, while leaving out the potential for actual gambling losses.

Others lure clients with promises of rewards. One such operator, Stake, ran a social media ad displaying Drake's automobiles, planes and estates before rotating to footage of the rap artist playing online casino-style video games.

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

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

The discrepancy between gaming sites and social or sweepstakes casinos 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), described its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, many of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.

'Most social sweeps consumers never ever buy,' the SPGA spokesperson told DailyMail.com. 'The minority of customers who make purchases do so in quantities far smaller than the normal deposit or bet size at real-money online sports betting websites.'

Social casinos provide consumers a chance to play casino-style video games with buddies. Players have the choice to buy valueless currency often referred to as 'gold coins,' which can not be exchanged for real cash, however can be utilized to open numerous features within the games.

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

And therein lies the potential 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 money and other things of value.

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

Social sweeps casino Stake ran an advertisement showing off Drake's cars, aircrafts and mansions

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

Traditional online casinos are banned in all but seven states, which has actually helped to fuel the appeal of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which do not need generally need identification. However, websites like Chumba will request IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for totally free sweeps coins, offered the gamers follow painfully specific instructions. What's more, gamers are typically rewarded with sweeps coins simply for registering, thereby providing a factor to try their hands at any variety of casino games for an opportunity to win - or lose - real money.

So why are sweepstakes sites allowed to run 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 gaming, and the real-stakes competitors is merely a way of promoting their bread and butter.

'Social sweepstakes games are just a form of online 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 an opportunity to win rewards. That absence of a purchase requirement - or" consideration" - is an essential distinction in between social sweeps and standard online gaming 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 bet, but rather they're buying hamburgers and fries that offer them the chance to win financially rewarding rewards, such as a $1 million jackpot.
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And without a purchase requirement, or 'consideration', the video game itself doesn't satisfy the meaning of sports betting in the US.

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

But to many gambling industry insiders, that argument does not cut it.

For starters, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game does not run indefinitely. Rather, it has a well-defined beginning and end, thereby suggesting the sweepstakes is not the fast-food giant's primary item. 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 typically not tied to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just money giveaways.

'The sweepstakes [casinos] have none of the attributes typically connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments provide" casino-like" payouts, generally 80 percent or more of profits, whereas the normal payout percentage for a momentary marketing sweepstakes is an unimportant share of the income earned by the company [generally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, providing customers the chance to play casino-style games for genuine prizes. Much of those brick-and-mortar facilities have considering that been shuttered over allegations of illegal gaming.

DJ Khaled is among a number of star spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps gambling establishments ought to face comparable examination.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have actually repeatedly been pointed out by courts and state attorney general of the United States as crucial elements in determining that a sweepstakes promo was in fact a guise for prohibited gaming.'

Among the casino industry's leading trade organizations, the American Gaming Association, is now pushing legislators to investigate sweepstakes operators and, sometimes, enact new legislation on the concern.

'Consumers are being denied of securities and states are passing up substantial tax and earnings chances as this gambling changes that carried out through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have sued 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 misbehavior, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued litigation.

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

In the newest lawsuit, which is mostly comparable to its predecessors, New york city state homeowners 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 enterprise. '

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

'We typically 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 simply been submitted with the court and VGW has not been formally served.

'We have full self-confidence in our compliance with all laws and regulations where we run, and stay confident about the future,' the representative continued. 'We continue to provide our free-to-play games across the majority of The United States and Canada, as we have for more than a decade, developing not only great video games, user experiences and entertainment, however also guaranteeing this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are reasonably common across the online social games market (and the US more broadly), and our basic practice is that we plan to intensely protect any claim which might be brought versus us.'

The problems between traditional online gambling and sweepstakes casinos might prove troublesome for some star 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 conventional gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to forecast a strong stance against unlawful gaming - particularly when attempting to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

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

Together with VGW, Apple and Google are being demanded hosting supposedly unlawful sports betting websites

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

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

Neither an NBA representative nor the players' agents reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise overlooked to react to DailyMail.com emails.

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

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the representative stated. 'Some of our values are" our gamers come first" 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 shady unlawful gaming websites are, at a minimum, putting their track records at threat in addition to courting civil and class actions by customers who declare damage,' Glaser said. 'There is likewise some threat that state regulators and state chief law officers rope star endorsers into enforcement efforts for helping with illegal gaming.'

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