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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.
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No, they weren't personally in presence, however the world-famous celebrities were conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites offering both free casino-style video games and financially rewarding rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of many gaming corporations, not to point out claim complainants and state regulators, sweepstakes casinos act as conventional gambling establishments, only without the oversight, consumer securities and tax laws. So not just can they prevent the steep 24-percent federal gaming levy, however 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 profits last year alone. Now the business faces accusations of illegal sports betting in a New York suit that claims VGW utilizes celeb endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's statement listed below)

'I'm unsure" if you don't 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 speaker, Howard Glaser of gaming corporation Light & Wonder, told 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 offer any differences between conventional gambling and sweepstakes play.

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

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

Drake has a deal with social sweeps casino, Stake, that he routinely touts on social media

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Instead, advertisements usually center around the social element of the casinos, while omitting the potential for actual gambling losses.

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

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

Another caption described: 'Because I never quit.'

The discrepancy between gambling sites and social or sweepstakes casinos is a bit intricate, but operators of the latter insist they're not involved 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 gambling establishments and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes casinos are sports betting totally free.

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

Social gambling establishments use clients an opportunity to play casino-style games with good friends. Players have the choice to buy worthless currency frequently referred to as 'gold coins,' which can not be exchanged genuine money, however can be utilized to unlock various functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, permitting clients to get other currency called 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the potential for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to buy more coins in pursuit of cash and other things of value.
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The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event

Social sweeps gambling establishment Stake ran an advertisement showing off Drake's cars, planes and estates

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 websites, which don't need usually require recognition. However, websites like Chumba will request for IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to send mail-in requests for free sweeps coins, supplied the gamers follow painfully particular guidelines. What's more, players are often with sweeps coins just for signing up, therefore offering them a factor to attempt their hands at any number of gambling establishment games for an opportunity to win - or lose - real cash.

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

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

'Social sweepstakes video games are simply a type of online entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is required to dip into social gambling establishments with sweepstakes prizes. Consumers never have to spend for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is an essential difference between social sweeps and standard online gaming sites like casinos.'

Consider the manner in which McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and fries that offer them the possibility to win rewarding prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the game itself does not fulfill the meaning of gaming in the US.

'Sweepstakes are an enduring method for promoting all kinds of daily businesses in the United States, whatever from hamburgers to publication memberships to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting industry experts, that argument does not cut it.

For starters, gaming attorney Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined beginning and end, thus recommending the sweepstakes is not the fast-food giant's primary product. 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 typically not tied to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [gambling establishments] have none of the qualities frequently related to McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos provide" casino-like" payments, usually 80 percent or more of incomes, whereas the common payout portion for a momentary marketing sweepstakes is a minor share of the income made by the company [normally less than one percent]'

Wallach is fast to compare the online social sweeps gambling establishments to the web cafes that sprang up in Florida, using customers the opportunity to play casino-style video games for genuine rewards. Many of those brick-and-mortar facilities have because been shuttered over accusations of unlawful gambling.

DJ Khaled is among numerous star spokespeople for VGW's Global Poker brand

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

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been cited by courts and state chief law officer as key elements in identifying that a sweepstakes promo remained in reality a guise for unlawful gambling.'

One of the gambling establishment market's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in many cases, enact brand-new legislation on the concern.

'Consumers are being deprived of protections and states are giving up substantial tax and profits opportunities as this gambling changes that conducted through controlled channels,' read a well-circulated AGA memo.

And then there are the complainants who have taken legal action against social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued lawsuits.

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

In the most current suit, which is mainly similar 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 described in the filing as an 'illegal sports betting business. '

Apple and Google have actually also been named as defendants in claims for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's ask for remark.

'We generally do not talk about matters before the courts,' a VGW spokesperson told DailyMail.com by means of email. 'However, we keep in mind that this claim has 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 run, and remain positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across many of The United States and Canada, as we have for more than a decade, developing not just excellent games, user experiences and entertainment, however also ensuring this is done securely, properly and at the highest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are relatively typical across the online social games market (and the US more broadly), and our standard practice is that we intend to strongly safeguard any claim which may be brought against us.'

The issues in between traditional online gaming and sweepstakes casinos could show troublesome for some star endorsers.
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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 professional athletes are hawking unlawful sports betting 'sweeps' sites while at the very same time the leagues wish to predict a strong position against unlawful sports betting - especially when trying to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

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

Together with VGW, Apple and Google are being demanded hosting supposedly illegal gambling sites

Regardless, Glaser sees sweepstakes gambling establishments as a major issue for leagues such as the NBA.

'I 'd anticipate that a league crackdown on athletes backing sweepstakes sites is a matter of when, not if,' Glaser added.

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 ignored to react to DailyMail.com emails.

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

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

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who lend their names to shady unlawful gaming websites are, at a minimum, putting their credibilities at risk in addition to courting civil and class actions by consumers who allege damage,' Glaser stated. 'There is likewise some risk that state regulators and state attorneys general rope celeb endorsers into enforcement efforts for facilitating illegal gambling.'

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