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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 gaming.

No, they weren't personally in presence, but the world-famous celebrities were notably included in a slide discussion on social and sweepstakes gambling establishments - the controversial sites using both free casino-style video games and profitable rewards, such as cash, present 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 numerous video gaming corporations, not to point out claim plaintiffs and state regulators, sweepstakes casinos act as conventional casinos, only without the oversight, consumer protections and tax laws. So not just can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't based on regulatory hurdles 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 gambling in a New York suit that declares VGW uses celebrity endorsers to 'develop a veneer of authenticity' around its item. (See VGW's statement below)

'I'm not exactly sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for companies operating multibillion-dollar prohibited operations out of places 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 range of celebs from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions in between conventional gambling and sweepstakes play.
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Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes casinos discovered online

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

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

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Instead, ads generally focus around the social element of the casinos, while omitting the potential for real sports betting losses.

Others lure customers with pledges of prizes. One such operator, Stake, ran a social media advertisement revealing off Drake's vehicles, airplanes and estates before pivoting to video footage of the rap artist playing online casino-style video games.

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

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

The disparity in between gambling websites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not involved 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 gambling establishments and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes casinos are sports betting totally 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 sized than the common deposit or bet size at real-money online sports betting websites.'

Social gambling establishments provide consumers a possibility to play casino-style video games with friends. Players have the choice to buy worthless currency often referred to as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to unlock various features within the games.

But within the world of social casinos exists sweepstakes video gaming, allowing customers to get other currency called 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the potential for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer told 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 value.

The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion

Social sweeps casino Stake ran an advertisement revealing off Drake's vehicles, planes and estates

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 appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which don't require typically require recognition. However, sites like Chumba will request IDs from gamers attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable clients to submit mail-in ask for free sweeps coins, provided the players follow painfully particular instructions. What's more, players are typically rewarded with sweeps coins merely for registering, therefore providing a factor to attempt their hands at any number of casino games for a possibility to win - or lose - real money.

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

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

'Social sweepstakes games are simply a form of online home entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never ever have to pay for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is a vital difference between social sweeps and standard online sports betting sites like casinos.'

Think about the way that McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that provide them the chance to win profitable prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing approach for promoting all type of everyday companies in the United States, everything from hamburgers to publication memberships to coffee and home enhancement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are routinely used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of gambling market experts, that argument doesn't cut it.
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For starters, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined beginning and end, thereby recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being used to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're normally not tied to casino-style games of chance,' Wallach informed DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] have none of the characteristics typically connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos offer" casino-like" payments, normally 80 percent or more of revenues, whereas the typical payment percentage for a short-term advertising sweepstakes is a minor share of the income made 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, using clients the chance to play casino-style games for genuine prizes. Many of those brick-and-mortar facilities have actually given that been shuttered over accusations of unlawful gaming.

DJ Khaled is amongst several celebrity spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps casinos should deal with comparable examination.

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have repeatedly been cited by courts and state attorney generals as essential consider figuring out that a sweepstakes promo was in truth a guise for prohibited sports betting.'

Among the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact brand-new legislation on the issue.

'Consumers are being deprived of protections and states are forgoing considerable tax and revenue opportunities as this gambling replaces that carried out through controlled channels,' read a well-circulated AGA memo.

And then there are the plaintiffs who have taken legal action against social casinos in more than a dozen states.
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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 accepted pay $11.75 million in one class-action lawsuit, saying the settlement was made to avoid legal expenses and continued lawsuits.

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

In the most recent claim, which is largely 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 described in the filing as an 'prohibited sports betting business. '

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

'We typically do not discuss matters before the courts,' a VGW spokesperson informed DailyMail.com by means of e-mail. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has not been formally served.

'We have complete confidence in our compliance with all laws and regulations where we run, and stay confident about the future,' the spokesperson continued. 'We continue to use our free-to-play video games across the majority of The United States and Canada, as we have for more than a years, producing not only excellent video games, user experiences and home entertainment, but also guaranteeing this is done securely, properly and at the greatest level of requirements.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are reasonably typical throughout the online social video games market (and the US more broadly), and our standard practice is that we intend to vigorously protect any claim which may be brought versus us.'

The problems in between standard online gaming and sweepstakes gambling establishments could prove bothersome for some celebrity 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 expert athletes are hawking unlawful sports betting wagering 'sweeps' websites while at the same time the leagues wish to predict a strong position against prohibited gaming - specifically when attempting to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a life time ban from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.

In addition to VGW, Apple and Google are being taken legal action against for hosting presumably 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 endorsing sweepstakes websites is a matter of when, not if,' Glaser added.

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

Asked if their celebrity endorsers have a duty to explain to customers the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the representative stated. 'Some of our worths are" our players come first" and" we do what's right", and we put our values at the core of everything we do.'

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

'Celebrities who provide their names to dubious prohibited gambling sites are, at a minimum, putting their track records at risk as well as courting civil and class actions by consumers who declare harm,' Glaser stated. 'There is also some risk that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for facilitating prohibited gambling.'

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