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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 unlawful gambling.

No, they weren't personally in attendance, but the world-famous stars were notably included in a slide discussion on social and sweepstakes gambling establishments - the questionable sites using both totally free casino-style video games and profitable rewards, such as money, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for 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 simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of many video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos function as standard gambling establishments, just without the oversight, consumer defenses and tax laws. So not only can they prevent the high 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative obstacles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces allegations of unlawful gaming in a New york city lawsuit that declares VGW uses celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm uncertain" if you do not trust us, you can trust Paris Hilton" is a winning message for companies 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 consist of a series of celebrities from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between standard gambling and sweepstakes play.

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

Ryan Seacrest advises fans to play at Chumba Casino, where numerous - but not all - games are free

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

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Instead, advertisements normally center around the social aspect of the casinos, while leaving out the potential for real gambling losses.

Others tempt clients with guarantees of rewards. One such operator, Stake, ran a social media ad displaying Drake's vehicles, planes and estates before rotating to video of the rapper playing online casino-style games.
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'Daddy, why do we have a lot money?' read the first caption on the screen.

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

The disparity between sports betting websites and social or sweepstakes casinos is a bit complicated, but operators of the latter insist they're not included with the former.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, many of the players on social-sweepstakes gambling establishments are playing for free.

'Most social sweeps clients never make a purchase,' the SPGA representative informed DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller than the normal deposit or wager size at real-money online gaming websites.'

Social gambling establishments provide customers a chance to play casino-style video games with buddies. Players have the choice to purchase valueless currency often referred to as 'gold coins,' which can not be exchanged for real money, but can be used to open numerous features within the games.

But within the world of social casinos exists sweepstakes gaming, enabling customers to acquire other currency referred to as 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the capacity for monetary losses, like the ones declared by plaintiffs 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 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 a Worldwide Poker event

Social sweeps gambling establishment Stake ran an advertisement showing off Drake's cars and trucks, aircrafts and mansions

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

Traditional online casinos are prohibited in all however 7 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 require recognition. However, websites like Chumba will request IDs from gamers trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in demands for free sweeps coins, provided the players follow painfully specific instructions. What's more, players are frequently rewarded with sweeps coins merely for registering, consequently offering them a factor to attempt their hands at any number of casino video games for a possibility to win - or lose - real cash.

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

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

'Social sweepstakes games are simply a kind of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never need to spend for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is an important distinction between social sweeps and traditional online gaming websites like gambling establishments.'

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

And without a purchase requirement, or 'consideration', the game itself does not satisfy the meaning of sports betting in the US.

'Sweepstakes are a long-standing method for promoting all kinds of daily services in the United States, whatever from hamburgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are routinely utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run forever. Rather, it has a well-defined start and end, therefore recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote real products like fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're normally not connected to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're just money giveaways.

'The sweepstakes [gambling establishments] possess none of the attributes typically connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos provide" casino-like" payouts, normally 80 percent or more of incomes, whereas the typical payment percentage for a temporary promotional sweepstakes is a trivial share of the income earned by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the web cafes that sprang up in Florida, offering consumers the possibility to play casino-style video games for real rewards. A lot of those brick-and-mortar facilities have actually considering that been shuttered over accusations of unlawful sports betting.

DJ Khaled is among a number of star spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos need to face similar analysis.

'These distinctions are not arbitrary,' Wallach said of social sweeps casinos. 'They have consistently been pointed out by courts and state attorney general of the United States as crucial consider figuring out that a sweepstakes promotion remained in truth a guise for illegal gambling.'

Among the gambling establishment market's leading trade organizations, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, sometimes, enact new legislation on the problem.

'Consumers are being deprived of protections and states are giving up considerable tax and earnings chances as this gaming replaces that conducted through controlled 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 dozen states.

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

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

In the latest suit, which is mostly similar to its predecessors, New York state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited gambling business. '

Apple and Google have actually likewise been named as offenders in suits for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's ask for remark.

'We usually do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com via e-mail. 'However, we keep in mind that this claim has only just been submitted with the court and VGW has not been formally served.

'We have full confidence in our compliance with all laws and policies where we run, and remain positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across the majority of North America, as we have for more than a decade, producing not just games, user experiences and home entertainment, but likewise guaranteeing this is done securely, responsibly and at the highest level of requirements.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are fairly common across the online social video games industry (and the US more broadly), and our basic practice is that we mean to intensely protect any claim which may be brought against us.'

The concerns in between standard online gaming and sweepstakes gambling establishments could show troublesome for some star 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 paradoxical that professional athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the same time the leagues want to forecast a strong stance versus unlawful gaming - particularly when attempting to tamp down the occasional gaming 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 claims he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes gambling establishments.

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

Regardless, Glaser sees sweepstakes casinos as a major issue 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.
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Neither an NBA spokesperson nor the gamers' agents reacted to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to react to DailyMail.com emails.

Asked if their star endorsers have a duty to discuss to consumers the distinctions and similarities 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 collaborations, and our business practices more broadly,' the spokesperson stated. 'A few of our worths are" our gamers precede" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things in a different way.

'Celebrities who lend their names to shady prohibited sports betting websites are, at a minimum, putting their reputations at risk along with courting civil and class actions by consumers who allege harm,' Glaser stated. 'There is likewise some risk that state regulators and state lawyers basic rope celeb endorsers into enforcement efforts for facilitating prohibited sports betting.'

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