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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 sports betting.
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No, they weren't personally in participation, but the world-famous stars were notably included in a slide presentation on social and sweepstakes casinos - the controversial sites providing both totally free casino-style games and lucrative rewards, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody 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 websites are just two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes gambling establishments act as standard casinos, just without the oversight, consumer securities and tax laws. So not just can they avoid the high 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company faces accusations of prohibited gambling in a New york city lawsuit that claims VGW uses celeb endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's declaration 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 prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a series of celebs from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between traditional gambling and sweepstakes play.

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

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

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

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

Others tempt consumers with promises of rewards. One such operator, Stake, ran a social media advertisement flaunting Drake's automobiles, planes and mansions before rotating to footage of the rapper playing online casino-style video games.

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

Another caption described: 'Because I never quit.'

The inconsistency in between gambling sites and social or sweepstakes gambling establishments is a bit intricate, but operators of the latter insist they're not included with the former.

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

'Most social sweeps clients never ever buy,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller than the typical deposit or bet size at real-money online gambling websites.'

Social gambling establishments provide clients a possibility to play casino-style video games with friends. Players have the choice to purchase worthless currency typically described as 'gold coins,' which can not be exchanged genuine money, however can be used to open various features within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, enabling clients to acquire 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 plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer 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 an International Poker occasion

Social sweeps casino Stake ran an advertisement showing off Drake's cars, airplanes and estates

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

Traditional online gambling establishments are prohibited in all but seven states, which has helped to sustain the appeal of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which don't require typically require identification. However, websites like Chumba will request for IDs from gamers trying to withdraw any funds.
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Many sites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for totally free sweeps coins, provided the gamers follow painfully specific guidelines. What's more, gamers are typically rewarded with sweeps coins merely for signing up, thus providing a factor to try their hands at any variety of gambling establishment video games for a chance to win - or lose - genuine money.

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

According to the stakeholders, their item is the free casino-style gaming, and the real-stakes competitors is simply a way of promoting their bread and butter.

'Social sweepstakes video games are just a kind of online home entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never ever have to spend for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is an important difference in between social sweeps and standard online gaming websites like casinos.'

Consider the way that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that use them the chance to win profitable prizes, such as a $1 million prize.

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

'Sweepstakes are an enduring approach for promoting all sort of everyday companies in the United States, everything from burgers to publication memberships to coffee and home improvement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'
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But to lots of sports betting industry experts, that argument doesn't cut it.

For starters, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being used to promote real products like french fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're normally not tied to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] have none of the attributes frequently associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payouts, typically 80 percent or more of incomes, whereas the common payment portion for a temporary marketing sweepstakes is an unimportant share of the earnings earned by the business [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, providing consumers the chance to play casino-style video games for genuine prizes. A number of those brick-and-mortar establishments have actually considering that been shuttered over claims of unlawful gambling.

DJ Khaled is amongst several star spokespeople for VGW's Global Poker brand

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

'These distinctions 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 key consider figuring out that a sweepstakes promotion remained in fact a guise for illegal gaming.'

One of the casino industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being denied of securities and states are giving up significant tax and income opportunities as this gambling changes that conducted through controlled channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs 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 four 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, stating the settlement was made to prevent legal expenses and continued lawsuits.

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

In the latest suit, which is largely comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gambling business. '

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

'We generally do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com through e-mail. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has actually not been officially served.

'We have full self-confidence in our compliance with all laws and regulations where we run, and stay confident about the future,' the spokesperson continued. 'We continue to use our free-to-play video games throughout most of North America, as we have for more than a decade, developing not just excellent games, user experiences and home entertainment, however likewise guaranteeing this is done safely, responsibly and at the greatest level of requirements.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are fairly typical across the online social games industry (and the US more broadly), and our standard practice is that we mean to vigorously protect any claim which may be brought versus us.'

The problems between conventional online sports betting and sweepstakes casinos could show troublesome 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 traditional gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking prohibited 'sweeps' websites while at the very same time the leagues want to forecast a strong stance against prohibited gambling - particularly when trying to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being taken legal action against for hosting presumably unlawful sports betting websites

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

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

Neither an NBA spokesperson nor the players' representatives reacted to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to respond to DailyMail.com emails.

Asked if their star endorsers have an obligation to describe to clients the distinctions and resemblances in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

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

Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.
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'Celebrities who lend their names to dubious prohibited sports betting websites are, at a minimum, putting their track records at danger along with courting civil and class actions by consumers who allege harm,' Glaser said. 'There is also some risk that state regulators and state attorneys basic rope star endorsers into enforcement efforts for facilitating unlawful sports betting.'

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