The smiling faces of Paris Hilton and Ryan Seacrest made surprise looks before the Louisiana Senate for Friday's hearing on prohibited gambling.
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No, they weren't personally in participation, but the world-famous celebs were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the questionable websites offering both free casino-style video games and profitable prizes, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet 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 two cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of many video gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes gambling establishments serve as standard casinos, just without the oversight, customer securities and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulative 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 business faces accusations of illegal gambling in a New york city lawsuit that claims VGW uses celebrity endorsers to 'create a veneer of legitimacy' around its product. (See VGW's declaration listed below)

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

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

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

Ryan Seacrest urges fans to dip into Chumba Casino, where many - however not all - games are complimentary

Drake has a deal with social sweeps casino, Stake, that he regularly touts on social networks

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Instead, ads generally focus around the social element of the gambling establishments, while omitting the potential for real gambling losses.

Others tempt clients with pledges of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's automobiles, airplanes and mansions before pivoting to footage of the rapper playing online casino-style games.

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

Another caption discussed: 'Because I never quit.'

The discrepancy between gambling sites and social or sweepstakes gambling establishments is a bit intricate, however 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), explained its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, most of the gamers on social-sweepstakes casinos are sports betting free.

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

Social gambling establishments offer customers an opportunity to play casino-style video games with good friends. Players have the alternative to purchase worthless currency often referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be used to open numerous features within the video games.

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

And therein lies the capacity 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 casinos in the previous year after continuing to buy more coins in pursuit of money and other things of worth.

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

Social sweeps casino Stake ran an ad revealing off Drake's cars, aircrafts and mansions
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Karl-Anthony Towns of the New York City Knicks is another NBA star plugging VGW's Global Poker

Traditional online casinos are prohibited in all however 7 states, which has assisted to fuel the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which don't need normally need identification. However, sites like Chumba will request IDs from players trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, permit clients to submit mail-in requests for free sweeps coins, offered the gamers follow painfully specific guidelines. What's more, players are often rewarded with sweeps coins just for signing up, thus providing them a reason to try their hands at any variety of casino video games for a chance to win - or lose - real money.

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

According to the stakeholders, their product is the totally free casino-style video gaming, and the real-stakes competitors is merely a means of promoting their bread and butter.

'Social sweepstakes video games are simply a kind of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to play at social casinos with sweepstakes rewards. Consumers never ever have to spend for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an important difference between social sweeps and conventional online gaming sites like gambling establishments.'

Consider the manner in which McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and french fries that offer them the opportunity to win profitable prizes, such as a $1 million prize.

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

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

But to lots of gambling market insiders, that argument does not cut it.
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For beginners, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game does not run forever. Rather, it has a distinct beginning and end, therefore recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're usually not connected to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [casinos] possess none of the attributes frequently connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payouts, normally 80 percent or more of earnings, whereas the normal payout portion for a short-lived marketing sweepstakes is an unimportant share of the income made by the business [typically less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, offering clients the opportunity to play casino-style video games for genuine rewards. A number of those brick-and-mortar facilities have given that been shuttered over accusations of unlawful gambling.

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

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

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually repeatedly been mentioned by courts and state attorney general of the United States as essential consider determining that a sweepstakes promotion remained in reality a guise for unlawful sports betting.'

One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in some cases, enact new legislation on the problem.

'Consumers are being denied of defenses and states are giving up significant tax and earnings opportunities as this gambling replaces that carried out through managed channels,' read a well-circulated AGA memo.

And after that 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 misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal expenses and continued litigation.

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

In the current suit, which is mostly comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal sports betting business. '

Apple and Google have actually likewise been called as accuseds in claims for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for comment.

'We typically don't discuss matters before the courts,' a VGW spokesperson told DailyMail.com via e-mail. 'However, we keep in mind that this claim has only simply been submitted with the court and VGW has not been officially served.

'We have complete self-confidence in our compliance with all laws and policies where we operate, and remain confident about the future,' the representative continued. 'We continue to provide our free-to-play games throughout the majority of North America, as we have for more than a years, creating not just great games, user experiences and entertainment, but also ensuring 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 typical throughout the online social video games market (and the US more broadly), and our basic practice is that we intend to intensely safeguard any claim which might be brought against us.'

The problems in between traditional online sports betting and sweepstakes casinos might show bothersome 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 conventional gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues want to predict a strong position against illegal sports betting - specifically when attempting to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.

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

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

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

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

Neither an NBA spokesman nor the players' agents reacted to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com e-mails.

Asked if their star endorsers have a responsibility to discuss to customers the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that needs to be done.

'We have full self-confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the spokesperson stated. 'A few of our values are" our players 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 websites, sees things differently.
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'Celebrities who provide their names to dubious prohibited sports betting websites are, at a minimum, putting their credibilities at risk as well as courting civil and class actions by customers who allege harm,' Glaser stated. 'There is likewise some danger that state regulators and state lawyers basic rope celebrity endorsers into enforcement efforts for helping with illegal sports betting.'

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