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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.

No, they weren't personally in presence, however the world-famous celebs were notably consisted of in a slide presentation on social and sweepstakes casinos - the controversial websites offering both free casino-style games and financially rewarding prizes, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for free,' 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 market that now discovers itself besieged by claims. In the eyes of many video gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes casinos act as standard gambling establishments, just without the oversight, customer protections and tax laws. So not just can they avoid the high 24-percent federal gaming levy, but sweepstakes operators aren't subject to regulative obstacles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company deals with accusations of unlawful sports betting in a New York suit that claims VGW uses celeb endorsers to 'develop a veneer of authenticity' around its item. (See VGW's declaration below)
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'I'm uncertain" if you do not trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar unlawful operations out of locations 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 variety of celebs from gambling lovers 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, one of lots of sweepstakes gambling establishments found online

Ryan Seacrest urges fans to dip into Chumba Casino, where lots of - but not all - games are complimentary

Drake has a deal with social sweeps gambling establishment, Stake, that he frequently promotes on social networks

Find out more
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Instead, advertisements usually center around the social aspect of the casinos, while omitting the potential for real gaming losses.

Others lure clients with pledges of prizes. One such operator, Stake, ran a social networks advertisement displaying Drake's cars and trucks, aircrafts and mansions before rotating to footage of the rap artist playing online casino-style games.

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

Another caption described: 'Because I never ever quit.'

The disparity between gambling websites and social or sweepstakes gambling establishments is a bit complex, however operators of the latter insist they're not included with the previous.

A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed 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.
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'Most social sweeps customers never ever purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller sized than the common deposit or wager size at real-money online gambling sites.'

Social casinos offer customers an opportunity to play casino-style video games with pals. Players have the option to buy worthless currency typically referred to as 'gold coins,' which can not be exchanged genuine money, but can be utilized to open numerous functions within the games.

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

And therein lies the potential for monetary losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to purchase more coins in pursuit of money and other things of worth.

The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event

Social sweeps gambling establishment Stake ran an advertisement showing off Drake's vehicles, airplanes and mansions

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 but seven states, which has helped to fuel the popularity of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, enable customers to send mail-in ask for totally free sweeps coins, supplied the players follow painfully particular directions. What's more, players are often rewarded with sweeps coins merely for signing up, therefore providing a reason to try their hands at any number of gambling establishment games for a possibility to win - or lose - genuine cash.

So why are sweepstakes websites allowed to run in 48 states, while online casinos are prohibited in all however 7?

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

'Social sweepstakes video games are merely a type of online home entertainment,' an informed DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes prizes. Consumers never have to pay for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is a vital distinction in between social sweeps and conventional online sports betting sites like casinos.'

Consider the method that McDonald's uses 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 profitable prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing technique for promoting all kinds of everyday businesses in the United States, everything from burgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are regularly used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling market insiders, that argument does not cut it.

For beginners, gaming lawyer Daniel Wallach points out, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined start and end, thereby recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're generally not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [gambling establishments] have none of the qualities frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payouts, normally 80 percent or more of earnings, whereas the typical payout percentage for a temporary marketing sweepstakes is an unimportant share of the earnings made by the company [generally less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the internet cafes that emerged in Florida, using customers the opportunity to play casino-style games for genuine prizes. Many of those brick-and-mortar establishments have actually since been shuttered over allegations of prohibited sports betting.

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

Now, Wallach argues, social sweeps casinos must face similar examination.

'These differences are not arbitrary,' Wallach stated of social sweeps casinos. 'They have consistently been mentioned by courts and state chief law officer as crucial elements in identifying that a sweepstakes promo was in reality a guise for unlawful gaming.'

Among the casino market's leading trade organizations, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in many cases, enact new legislation on the issue.

'Consumers are being deprived of securities and states are giving up substantial tax and revenue chances as this gambling replaces that conducted through managed channels,' read a well-circulated AGA memo.

And after that there are the plaintiffs who have actually sued 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 misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued lawsuits.

Michael Phelps has actually signed an offer with the VGW Group, which owns Global Poker

In the current suit, which is largely similar to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal gambling business. '

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

'We typically do not comment on matters before the courts,' a VGW spokesperson informed DailyMail.com by means of e-mail. 'However, we keep in mind that this claim has actually only just been filed with the court and VGW has actually not been formally served.
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'We have complete self-confidence in our compliance with all laws and regulations where we operate, and remain confident about the future,' the representative continued. 'We continue to provide our free-to-play video games throughout many of North America, as we have for more than a years, producing not just excellent video games, user experiences and home entertainment, however also guaranteeing this is done safely, properly and at the greatest level of requirements.
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'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are fairly common across the online social games industry (and the US more broadly), and our basic practice is that we intend to vigorously protect any claim which may be brought against us.'

The issues between standard online gaming and sweepstakes gambling establishments might show troublesome for some star endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand name while the NBA is partnered with standard video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' sites while at the exact same time the leagues want to predict a strong position against illegal gambling - particularly when trying to tamp down the periodic gambling scandal,' Glaser told DailyMail.com.

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

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

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

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

Neither an NBA spokesman nor the gamers' agents reacted 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.
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Asked if their star endorsers have a responsibility to explain to customers the distinctions and resemblances in between iGaming and sweepstakes casinos, VGW 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 said. 'A few of our worths are" our players precede" and" we do what's right", and we put our worths at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.

'Celebrities who lend their names to dubious prohibited sports betting sites are, at a minimum, putting their reputations at danger in addition to courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some danger that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for facilitating unlawful gambling.'

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