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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 prohibited gaming.

No, they weren't personally in participation, however the world-famous celebrities were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the controversial sites using both free casino-style games and lucrative prizes, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The sites are simply 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 lawsuit plaintiffs and state regulators, sweepstakes gambling establishments act as standard casinos, just without the oversight, consumer securities and tax laws. So not only can they avoid the steep 24-percent federal gaming levy, however sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with accusations of prohibited gaming in a New york city suit that declares VGW utilizes celebrity endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's statement below)
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'I'm uncertain" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar unlawful 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 series of celebrities from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between traditional gaming and sweepstakes play.

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

Ryan Seacrest prompts fans to play at Chumba Casino, where many - however not all - video games are complimentary

Drake has an offer with social sweeps gambling establishment, Stake, that he frequently promotes on social media

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Instead, ads normally focus around the social element of the casinos, while leaving out the capacity for real gambling losses.

Others lure consumers with pledges of rewards. One such operator, Stake, ran a social media advertisement flaunting Drake's vehicles, planes and estates before rotating to footage of the rapper playing online casino-style games.

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

Another caption discussed: 'Because I never ever offered up.'

The discrepancy in between gambling websites and social or sweepstakes casinos is a bit complex, but 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 competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, many of the gamers on social-sweepstakes gambling establishments are sports betting free.

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

Social casinos use customers an opportunity to play casino-style games with pals. Players have the choice to buy worthless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be used to unlock different features within the video games.

But within the world of social casinos exists sweepstakes video gaming, permitting customers to obtain other currency referred to as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York City. One player informed 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 worth.

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

Social sweeps casino Stake ran an advertisement flaunting Drake's automobiles, planes and estates

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

Traditional online gambling establishments are banned in all however 7 states, which has helped to fuel the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which do not require normally require identification. However, sites like Chumba will request IDs from gamers attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable consumers to submit mail-in requests for totally free sweeps coins, supplied the players follow painfully specific instructions. What's more, players are frequently rewarded with sweeps coins simply for signing up, therefore providing a reason to attempt their hands at any number of gambling establishment video games for a chance to win - or lose - genuine money.

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

According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competition is just a means of promoting their support.

'Social sweepstakes games are merely a form of online home entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social casinos with sweepstakes rewards. Consumers never need to spend for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is a vital difference in between social sweeps and standard online gaming websites like casinos.'

Think of the manner in which McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and french fries that offer them the opportunity to win rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the game itself doesn't fulfill the meaning of gambling in the US.

'Sweepstakes are a long-standing method for promoting all type of daily organizations in the United States, everything from burgers to magazine memberships to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game does not run forever. Rather, it has a well-defined start and end, therefore suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're typically not tied to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] have none of the qualities commonly connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payments, usually 80 percent or more of incomes, whereas the typical payment portion for a temporary advertising sweepstakes is an unimportant share of the profits made by the business [typically less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, offering customers the opportunity to play casino-style video games for real prizes. A lot of those brick-and-mortar establishments have actually considering that been shuttered over accusations of unlawful sports betting.

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

Now, Wallach argues, social sweeps gambling establishments must face comparable analysis.

'These distinctions are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state attorney general of the United States as key elements in figuring out that a sweepstakes promotion remained in reality a guise for illegal sports betting.'

One of the casino market's leading trade organizations, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, in some cases, enact new legislation on the concern.

'Consumers are being deprived of defenses and states are giving up considerable tax and income opportunities as this gambling changes that carried out through regulated channels,' checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in 4 different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, stating the settlement was made to avoid legal expenses and continued litigation.

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

In the current claim, which is mainly similar to its predecessors, New york city state citizens Lamar Prater and Rebecca Pratt both declare 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 likewise been called as accuseds in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's request for comment.

'We normally don't discuss matters before the courts,' a VGW spokesperson informed DailyMail.com via email. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has not been officially served.

'We have full confidence in our compliance with all laws and policies where we operate, and remain confident about the future,' the representative continued. 'We continue to offer our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a decade, creating not only fantastic video games, user experiences and home entertainment, however also ensuring this is done safely, properly and at the highest level of standards.

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

The problems in between conventional online sports betting and sweepstakes gambling establishments might show bothersome for some celebrity endorsers.

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 standard video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the same time the leagues desire to project a strong stance against illegal sports betting - particularly when trying to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over accusations he conspired with . 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 taken legal action against for hosting apparently illegal sports betting sites

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

'I 'd expect that a league crackdown on professional athletes backing sweepstakes websites is a matter of when, not if,' Glaser included.

Neither an NBA spokesman nor the gamers' agents reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also ignored to react to DailyMail.com emails.

Asked if their celeb endorsers have a duty to discuss to customers the distinctions and similarities in between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our company practices more broadly,' the spokesperson stated. 'A few of our values are" our gamers 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 in a different way.

'Celebrities who lend their names to dubious prohibited gambling sites are, at a minimum, putting their credibilities at threat along with courting civil and class actions by customers who allege damage,' Glaser said. 'There is also some risk that state regulators and state attorneys general rope celebrity endorsers into enforcement efforts for assisting in unlawful gambling.'

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