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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 gaming.
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No, they weren't personally in presence, but the world-famous stars were conspicuously consisted of in a slide discussion on social and sweepstakes gambling establishments - the questionable websites offering both free casino-style games and rewarding rewards, such as money, 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 sites are simply two cogs in the multibillion-dollar industry that now finds itself besieged by lawsuits. In the eyes of many video gaming corporations, not to point out lawsuit complainants and state regulators, sweepstakes gambling establishments serve as conventional gambling establishments, only without the oversight, consumer protections and tax laws. So not only can they avoid the steep 24-percent federal gaming levy, but sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the company faces accusations of unlawful gambling in a New York suit that declares VGW utilizes celeb endorsers to 'create a veneer of legitimacy' around its item. (See VGW's declaration below)

'I'm uncertain" if you do not trust us, you can trust 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 speaker, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers consist of a series of celebs 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 differences between standard sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes casinos discovered online

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

Drake has a handle social sweeps gambling establishment, Stake, that he regularly touts on social media

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

Others lure customers with promises of prizes. One such operator, Stake, ran a social media ad revealing off Drake's automobiles, airplanes and estates before pivoting to footage of the rapper playing online casino-style games.

'Daddy, why do we have so much money?' read the first caption on the screen.

Another caption described: 'Because I never ever provided up.'

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

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

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

Social casinos offer customers an opportunity to play casino-style video games with friends. Players have the choice to buy valueless currency frequently referred to as 'gold coins,' which can not be exchanged genuine cash, however can be utilized to open different features within the games.

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

And therein lies the potential for financial losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York. One player informed 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 cash and other things of worth.

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

Social sweeps casino Stake ran an advertisement flaunting Drake's automobiles, aircrafts and mansions

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

Traditional online gambling establishments are banned in all however 7 states, which has actually helped to sustain the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in demands for free sweeps coins, supplied the gamers follow painfully particular directions. What's more, players are often rewarded with sweeps coins just for registering, therefore providing a factor to try their hands at any number of gambling establishment video games for an opportunity to win - or lose - real money.

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

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

'Social sweepstakes games are just a type of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never have to spend for a chance to win rewards. That lack of a purchase requirement - or" factor to consider" - is an important distinction in between social sweeps and conventional online gaming websites like casinos.'
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Think about the manner in which McDonald's utilizes its annual Monopoly video 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 prize.

And without a purchase requirement, or 'consideration', the game itself doesn't meet the meaning of gaming in the US.

'Sweepstakes are a long-standing method for promoting all type of everyday services in the United States, whatever from hamburgers to publication memberships to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are regularly utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of sports betting market insiders, that argument does not cut it.

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video 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 don't last permanently and they're generally not tied to casino-style games of possibility,' Wallach told DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [gambling establishments] have none of the qualities frequently related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos use" casino-like" payments, usually 80 percent or more of earnings, whereas the typical payment percentage for a temporary marketing sweepstakes is a trivial share of the earnings earned by the company [typically less than one percent]'

Wallach is fast to compare the online social sweeps casinos to the web coffee shops that emerged in Florida, using customers the possibility to play casino-style video games for real prizes. Many of those brick-and-mortar facilities have actually given that been shuttered over accusations of illegal gaming.

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

Now, Wallach argues, social sweeps gambling establishments need to deal with comparable scrutiny.

'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been cited by courts and state chief law officer as key consider identifying that a sweepstakes promo remained in fact a guise for illegal sports betting.'

Among the casino market's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in some cases, enact brand-new legislation on the concern.

'Consumers are being denied of securities and states are giving up considerable tax and revenue opportunities as this sports betting changes that performed through controlled channels,' read a well-circulated AGA memo.

And after that there are the complainants who have taken legal action against social gambling establishments in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 different cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal costs and continued litigation.

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

In the current lawsuit, which is largely 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 'illegal gaming business. '

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

'We usually do not comment on matters before the courts,' a VGW spokesperson told DailyMail.com via email. 'However, we note that this claim has actually only just been submitted with the court and VGW has actually not been officially served.

'We have complete confidence in our compliance with all laws and regulations where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across many of North America, as we have for more than a years, developing not only terrific video games, user experiences and home entertainment, but likewise guaranteeing 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 across the online social games industry (and the US more broadly), and our basic practice is that we plan to vigorously safeguard any claim which might be brought against us.'

The problems in between traditional online gaming and sweepstakes gambling establishments might show bothersome for some celebrity 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 conventional video gaming titans like FanDuel and DraftKings.

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

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

In addition to VGW, Apple and Google are being demanded hosting supposedly illegal sports betting websites

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

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

Neither an NBA representative nor the gamers' representatives reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also disregarded to react to DailyMail.com emails.

Asked if their star endorsers have an obligation to explain to clients the distinctions and similarities between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete confidence in our and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'Some of our values are" our gamers come initially" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who provide their names to dubious illegal gaming websites are, at a minimum, putting their track records at risk in addition to courting civil and class actions by customers who declare harm,' Glaser said. 'There is likewise some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for facilitating prohibited sports betting.'

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