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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 prohibited sports betting.
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No, they weren't personally in participation, however the world-famous stars were notably included in a slide presentation on social and sweepstakes casinos - the questionable websites providing both free casino-style video games and lucrative prizes, such as money, gift cards or cryptocurrency. In one ad, 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 just 2 cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of lots of gaming corporations, not to point out claim complainants and state regulators, sweepstakes gambling establishments act as conventional casinos, only without the oversight, consumer securities and tax laws. So not only can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company deals with accusations of unlawful sports betting in a New York lawsuit that claims VGW uses star endorsers to 'develop a veneer of authenticity' around its item. (See VGW's statement below)

'I'm uncertain" if you don't trust us, you can rely on 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 gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a variety of celebrities from gambling enthusiasts 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 standard sports betting and sweepstakes play.

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

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

Drake has a handle social sweeps casino, Stake, that he routinely promotes on social media

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Instead, ads usually center around the social aspect of the gambling establishments, while omitting the capacity for actual gambling losses.

Others lure consumers with promises of prizes. One such operator, Stake, ran a social media ad revealing off Drake's automobiles, aircrafts and mansions before pivoting to video footage of the rap artist playing online casino-style games.

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

Another caption described: 'Because I never quit.'

The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit complicated, but operators of the latter insist they're not involved with the previous.

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.

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

Social casinos provide clients an opportunity to play casino-style video games with buddies. Players have the option to buy valueless currency often described as 'gold coins,' which can not be exchanged genuine money, however can be used to unlock various functions within the video games.

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

And therein lies the capacity for financial losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer 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 money and other things of value.

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

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

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

Traditional online gambling establishments are prohibited in all however 7 states, which has actually helped to sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not require normally need recognition. However, sites like Chumba will request for IDs from players trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, permit consumers to send mail-in requests for totally free sweeps coins, provided the players follow painfully specific instructions. What's more, players are typically rewarded with sweeps coins just for signing up, therefore providing them a factor to try their hands at any variety of casino video games for an opportunity to win - or lose - real cash.

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

According to the stakeholders, their product is the complimentary casino-style gaming, and the real-stakes competition is simply a method of promoting their bread and butter.

'Social sweepstakes video games are merely a type of online entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never ever need to spend for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is an essential difference between social sweeps and traditional online gaming sites like gambling establishments.'

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

And without a purchase requirement, or 'factor to consider', the game itself doesn't meet the definition of gaming in the US.

'Sweepstakes are an enduring approach for promoting all type of everyday services in the United States, everything from burgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry insiders, that argument does not cut it.

For starters, gaming lawyer Daniel Wallach points out, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real products like french fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're typically not connected to casino-style video games of opportunity,' Wallach informed DailyMail.com. 'They're just money free gifts.

'The sweepstakes [casinos] have none of the qualities commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payouts, normally 80 percent or more of earnings, whereas the common payment percentage for a short-lived advertising sweepstakes is a trivial share of the profits earned by the business [usually less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the internet cafes that sprang up in Florida, offering customers the chance to play casino-style games for real prizes. Much of those brick-and-mortar facilities have given that been shuttered over accusations of unlawful gaming.
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DJ Khaled is among a number of star spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps gambling establishments must face similar scrutiny.
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'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been cited 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 gaming.'

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the issue.

'Consumers are being denied of protections and states are passing up considerable tax and earnings opportunities as this gambling replaces that carried out through regulated 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 gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action lawsuit, stating the settlement was made to prevent legal expenses and continued lawsuits.

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

In the newest claim, which is largely comparable 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 explained in the filing as an 'illegal gaming enterprise. '

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

'We normally don't talk about matters before the courts,' a VGW representative informed DailyMail.com by means of email. 'However, we keep in mind that this claim has actually only simply been filed with the court and VGW has not been formally served.

'We have complete self-confidence in our compliance with all laws and regulations where we run, and remain positive about the future,' the representative continued. 'We continue to provide our free-to-play video games across most of The United States and Canada, as we have for more than a years, creating not only terrific games, user experiences and entertainment, but also ensuring this is done securely, properly and at the highest level of requirements.

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

The problems in between standard online gaming and sweepstakes casinos might prove problematic for some celebrity 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 conventional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the very same time the leagues desire to forecast a strong position versus illegal gaming - particularly when attempting to tamp down the occasional gambling scandal,' Glaser informed DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being demanded hosting presumably illegal sports betting sites

Regardless, Glaser sees sweepstakes casinos as a significant concern for leagues such as the NBA.

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

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 respond to DailyMail.com emails.

Asked if their celeb endorsers have an obligation to discuss to clients the differences and resemblances between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the spokesperson stated. 'Some of our worths 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 challenger of sweepstakes websites, sees things differently.

'Celebrities who provide their names to shady unlawful gambling websites are, at a minimum, putting their track records at danger as well as courting civil and class actions by consumers who allege harm,' Glaser stated. 'There is likewise some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for assisting in illegal gambling.'

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