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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 unlawful gambling.

No, they weren't personally in participation, but the world-famous stars were conspicuously consisted of in a slide discussion on social and sweepstakes gambling establishments - the controversial websites providing both totally 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 totally free,' 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 finds itself besieged by lawsuits. In the eyes of many gaming corporations, not to discuss lawsuit plaintiffs and state regulators, sweepstakes gambling establishments act as standard casinos, only without the oversight, consumer securities and tax laws. So not only can they avoid the high 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulative obstacles 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 company deals with accusations of illegal gambling in a New york city claim that declares VGW utilizes celebrity endorsers to 'develop a veneer of legitimacy' 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 companies running 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, informed DailyMail.com.

Sweepstakes endorsers consist of a series of stars from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between traditional gambling and sweepstakes play.

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

Ryan Seacrest advises fans to play at Chumba Casino, where lots of - however not all - games are free

Drake has a handle social sweeps casino, Stake, that he regularly touts on social media
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Instead, ads typically center around the social element of the gambling establishments, while omitting the capacity for real gaming losses.

Others tempt clients with pledges of prizes. One such operator, Stake, ran a social media advertisement displaying Drake's cars and trucks, airplanes and estates before pivoting to video footage of the rapper playing online casino-style games.

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

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

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

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

'Most social sweeps customers never make a purchase,' the SPGA representative told DailyMail.com. 'The minority of customers who make purchases do so in quantities far smaller sized than the typical deposit or wager size at gambling sites.'

Social gambling establishments provide clients a possibility to play casino-style video games with pals. Players have the option to buy worthless currency often referred to as 'gold coins,' which can not be exchanged genuine money, however can be used to open numerous features within the video games.

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

And therein lies the potential for monetary losses, like the ones claimed by plaintiffs 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 purchase more coins in pursuit of money and other things of value.
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The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event

Social sweeps casino Stake ran an advertisement showing off Drake's vehicles, planes and mansions

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

Traditional online gambling establishments are banned in all but 7 states, which has actually assisted to fuel the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which don't require usually need recognition. However, sites like Chumba will ask for IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, allow customers to send mail-in demands for complimentary sweeps coins, offered the gamers follow painfully particular guidelines. What's more, players are frequently rewarded with sweeps coins merely for signing up, consequently offering them a factor to attempt their hands at any number of gambling establishment video games for an opportunity to win - or lose - real cash.

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

According to the stakeholders, their item is the totally free casino-style gaming, and the real-stakes competitors is just a way of promoting their support.

'Social sweepstakes games are simply a type of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never ever have to pay for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is an essential distinction between social sweeps and conventional online sports betting sites like casinos.'

Consider the method that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and french fries that provide them the opportunity to win rewarding prizes, such as a $1 million prize.

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

'Sweepstakes are an enduring technique for promoting all sort of daily businesses in the United States, whatever from hamburgers to magazine subscriptions to coffee and home enhancement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry experts, that argument does not cut it.

For starters, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly game does not run indefinitely. Rather, it has a well-defined 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 don't last forever and they're usually not connected to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] have none of the characteristics commonly related to McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos provide" casino-like" payments, normally 80 percent or more of revenues, whereas the common payment portion for a temporary advertising sweepstakes is an insignificant share of the revenue earned by the company [normally less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the internet cafes that emerged in Florida, providing consumers the chance to play casino-style games for real prizes. A lot of those brick-and-mortar establishments have given that been shuttered over claims of unlawful gambling.

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

Now, Wallach argues, social sweeps gambling establishments must face similar scrutiny.

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually repeatedly been cited by courts and state lawyer generals as essential consider determining that a sweepstakes promo remained in truth a guise for illegal gambling.'

Among the casino market's leading trade companies, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact new legislation on the issue.
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'Consumers are being deprived of securities and states are forgoing considerable tax and revenue chances as this gaming changes that carried out through managed channels,' read a well-circulated AGA memo.

And then there are the plaintiffs who have sued social casinos in more than a dozen states.

Sweepstakes casino 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 lawsuit, saying the settlement was made to prevent legal expenses and continued lawsuits.

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

In the latest suit, which is mainly comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gambling enterprise. '

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

'We generally don't comment on matters before the courts,' a VGW spokesperson informed DailyMail.com by means of e-mail. 'However, we note that this claim has only just been filed with the court and VGW has not been officially served.

'We have full confidence in our compliance with all laws and guidelines where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to use our free-to-play games across the majority of North America, as we have for more than a decade, developing not just fantastic games, user experiences and home entertainment, but also guaranteeing this is done safely, responsibly and at the highest level of requirements.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are relatively common across the online social video games industry (and the US more broadly), and our standard practice is that we intend to intensely safeguard any claim which may be brought versus us.'

The concerns between traditional online gambling and sweepstakes casinos might show problematic for some celeb 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 standard gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking illegal sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to project a strong position versus unlawful gambling - especially when trying to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

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

In addition to VGW, Apple and Google are being demanded hosting allegedly illegal sports betting sites

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

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

Neither an NBA spokesperson 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 neglected to react to DailyMail.com e-mails.

Asked if their celebrity endorsers have a responsibility to describe to customers the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'A few of our worths are" our gamers precede" and" we do what's right", and we put our values at the core of everything we do.'

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

'Celebrities who provide their names to dubious prohibited sports betting sites are, at a minimum, putting their reputations at threat in addition to courting civil and class actions by customers who allege harm,' Glaser stated. '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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