The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on unlawful sports betting.
bit.ly
No, they weren't personally in participation, but the world-famous celebrities were notably included in a slide presentation on social and sweepstakes casinos - the controversial websites offering both free casino-style games and financially rewarding rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos function as traditional gambling establishments, just without the oversight, customer securities and tax laws. So not only can they prevent the steep 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulative obstacles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the business faces allegations of illegal gaming in a New York claim that declares VGW uses star endorsers to 'create a veneer of authenticity' around its product. (See VGW's statement below)

'I'm not exactly sure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar illegal operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a range of stars from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between conventional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes casinos discovered online

Ryan Seacrest urges fans to play at Chumba Casino, where lots of - however not all - video games are free

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

Read More

Donald Trump 'set to name NBA group owner as US ambassador to Italy'

Instead, ads normally focus around the social aspect of the gambling establishments, while omitting the potential for actual sports betting losses.

Others lure customers with guarantees of prizes. One such operator, Stake, ran a social networks advertisement revealing off Drake's cars and trucks, airplanes and mansions before rotating to video footage of the rap artist playing online casino-style video games.

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

Another caption explained: 'Because I never quit.'

The discrepancy in between gaming 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 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 information, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.

'Most social sweeps clients never purchase,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller sized than the normal deposit or bet size at real-money online sports betting websites.'

Social gambling establishments provide consumers an opportunity to play casino-style games with pals. Players have the choice to buy valueless currency frequently described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to unlock numerous functions within the video games.

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

And therein lies the potential for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer told the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to purchase more coins in pursuit of cash and other things of worth.
bet9ja.com
The Philadelphia 76ers' Paul George is seen promoting a Global Poker event

Social sweeps gambling establishment Stake ran an advertisement displaying 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 seven states, which has actually helped to fuel the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which don't need usually require recognition. However, websites like Chumba will request for IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to send mail-in demands for free sweeps coins, provided the players follow painfully particular instructions. What's more, gamers are frequently rewarded with sweeps coins merely for signing up, thereby providing them a factor to try their hands at any number of gambling establishment video games for a possibility to win - or lose - real money.
bet9ja.com
So why are sweepstakes sites allowed to run in 48 states, while online casinos are prohibited in all but 7?

According to the stakeholders, their product is the totally free casino-style gaming, and the real-stakes competitors is just a way of promoting their bread and butter.

'Social sweepstakes video games are merely a form of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is needed to play at social gambling establishments with sweepstakes rewards. Consumers never need to spend for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is a vital distinction in between social sweeps and traditional online gaming sites like casinos.'

Think of the method that McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and fries that provide them the chance to win lucrative rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself does not fulfill the meaning of gaming in the US.

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

But to many sports betting industry experts, that argument doesn't cut it.

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

'They don't last permanently and they're typically not tied to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [casinos] possess none of the qualities frequently connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payments, normally 80 percent or more of revenues, whereas the normal payment percentage for a short-lived marketing sweepstakes is a minor share of the income earned by the business [normally less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the internet cafes that sprang up in Florida, offering clients the possibility to play casino-style games for genuine rewards. A number of those brick-and-mortar facilities have actually considering that been shuttered over accusations of illegal gaming.

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

Now, Wallach argues, social sweeps gambling establishments must deal with comparable scrutiny.

'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state attorney generals as key elements in figuring out that a sweepstakes promotion was in reality a guise for prohibited sports betting.'

Among the casino market's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, sometimes, enact new legislation on the issue.

'Consumers are being denied of securities and states are giving up considerable tax and revenue opportunities as this gambling changes that carried out through controlled channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have actually sued social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal costs and continued litigation.

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

In the most recent lawsuit, which is mostly similar to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gambling business. '

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

'We usually don't discuss matters before the courts,' a VGW spokesperson informed DailyMail.com through email. '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 complete confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the representative continued. 'We continue to offer our free-to-play games throughout most of The United States and Canada, as we have for more than a years, producing not only excellent games, user experiences and home entertainment, however likewise guaranteeing this is done safely, responsibly and at the greatest level of standards.

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

The problems between standard online gambling and sweepstakes gambling establishments might show troublesome 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 standard gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking illegal sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to project a strong position against illegal gaming - specifically when trying to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

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

Together with VGW, Apple and Google are being sued for hosting apparently illegal sports betting websites

Regardless, Glaser sees sweepstakes gambling establishments as a major problem for leagues such as the NBA.
bit.ly
'I 'd anticipate that a league crackdown on athletes backing sweepstakes sites is a matter of when, not if,' Glaser included.

Neither an NBA spokesman nor the players' agents reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com emails.

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

'We have full self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative said. 'A few of our worths are" our gamers come initially" and" we do what's right", and we put our values at the core of everything we do.'

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

'Celebrities who lend their names to shady unlawful gaming websites are, at a minimum, putting their reputations at risk as well as courting civil and class actions by consumers who declare harm,' Glaser said. 'There is likewise some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating illegal gambling.'

New YorkNBADrakeParis Hilton