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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 attendance, however the world-famous celebs were notably included in a slide presentation on social and sweepstakes casinos - the controversial sites using both free casino-style video games and financially rewarding prizes, 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 just two cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of numerous gaming corporations, not to mention lawsuit complainants and state regulators, sweepstakes casinos act as conventional casinos, just without the oversight, consumer securities and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, but sweepstakes operators aren't subject to 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 business faces accusations of unlawful gambling in a New york city lawsuit that declares VGW utilizes celebrity endorsers to 'develop a veneer of authenticity' around its item. (See VGW's declaration listed below)

'I'm unsure" if you do not trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar illegal operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a variety of celebrities from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between traditional gambling and sweepstakes play.
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Paris Hilton is seen plugging Wow Vegas, among many sweepstakes gambling establishments discovered online

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

Drake has a handle social sweeps gambling establishment, Stake, that he frequently touts on social media

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Instead, ads typically focus around the social element of the gambling establishments, while omitting the potential for losses.

Others lure customers with pledges of rewards. One such operator, Stake, ran a social media advertisement displaying Drake's cars and trucks, airplanes and mansions before pivoting to footage of the rapper playing online casino-style games.

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

Another caption explained: 'Because I never quit.'

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

A representative 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 information, most of the gamers on social-sweepstakes casinos are playing for complimentary.

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

Social gambling establishments provide clients an opportunity to play casino-style video games with good friends. Players have the option to buy worthless currency often referred to as 'gold coins,' which can not be exchanged genuine money, however can be used to open different functions within the games.

But within the world of social casinos exists sweepstakes video gaming, enabling consumers to get other currency referred to as 'sweeps coins' that can be exchanged for money or other prizes.
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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 told the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to buy more coins in pursuit of money and other things of worth.

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

Social sweeps casino Stake ran an ad displaying Drake's cars and trucks, planes and estates

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

Traditional online casinos are banned in all but seven states, which has assisted to fuel the appeal of sweepstakes gambling establishments.
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Anyone over the age of 18 can access the sweepstakes sites, which do not require typically need recognition. However, sites like Chumba will request IDs from players attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable consumers to send mail-in ask for free sweeps coins, offered the players follow painfully specific instructions. What's more, players are frequently rewarded with sweeps coins simply for registering, consequently providing a factor to attempt their hands at any number of casino games for a possibility to win - or lose - genuine money.

So why are sweepstakes websites enabled to run in 48 states, while online casinos are banned in all but 7?

According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competitors is just a means of promoting their bread and butter.

'Social sweepstakes games are simply a form of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never ever have to pay for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is a vital distinction in between social sweeps and conventional online gaming websites like casinos.'

Consider the method that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and french fries that provide them the opportunity to win financially rewarding rewards, such as a $1 million jackpot.
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And without a purchase requirement, or 'factor to consider', the video game itself doesn't satisfy the meaning of gambling in the US.

'Sweepstakes are an enduring method for promoting all kinds of daily businesses in the United States, whatever from burgers to publication memberships to coffee and home improvement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling market experts, that argument doesn't cut it.

For starters, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined start and end, thereby suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real products like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're generally not tied to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes typically associated with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, usually 80 percent or more of earnings, whereas the normal payment portion for a temporary promotional sweepstakes is an unimportant share of the earnings made by the business [typically less than one percent]'

Wallach is fast to compare the online social sweeps casinos to the internet cafes that sprang up in Florida, using clients the opportunity to play casino-style games for genuine rewards. Much of those brick-and-mortar facilities have actually considering that been shuttered over accusations of unlawful sports betting.

DJ Khaled is amongst numerous celeb spokespeople for VGW's Global Poker brand name

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

'These distinctions are not approximate,' Wallach stated of social sweeps casinos. 'They have actually consistently been cited by courts and state chief law officer as essential consider identifying that a sweepstakes promo was in truth a guise for unlawful gaming.'
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Among the gambling establishment market's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact new legislation on the issue.

'Consumers are being deprived of securities and states are giving up considerable tax and revenue chances as this gambling replaces that carried out through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs who have taken legal action against social gambling establishments in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal costs and continued litigation.
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Michael Phelps has actually signed a handle the VGW Group, which owns Global Poker

In the newest lawsuit, which is mainly comparable 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 'unlawful gaming enterprise. '

Apple and Google have actually likewise been named as offenders in claims for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for comment.

'We normally do not discuss matters before the courts,' a VGW representative told DailyMail.com by means of e-mail. 'However, we note that this claim has actually only simply been submitted with the court and VGW has not been formally served.

'We have complete self-confidence in our compliance with all laws and guidelines where we run, and stay confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play games throughout the majority of The United States and Canada, as we have for more than a decade, creating not only great games, user experiences and entertainment, but likewise guaranteeing this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly typical across the online social games industry (and the US more broadly), and our standard practice is that we intend to strongly safeguard any claim which might be brought versus us.'

The concerns in between traditional online gambling and sweepstakes casinos could prove troublesome for some celebrity endorsers.

Towns, a star center with the Knicks, and the 76ers' George both back VGW's Global Poker brand while the NBA is partnered with standard gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking unlawful sports betting 'sweeps' websites while at the exact same time the leagues wish to project a strong stance versus unlawful gaming - specifically when trying to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over accusations he conspired with bettors. 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 demanded hosting supposedly prohibited gambling websites

Regardless, Glaser sees sweepstakes gambling establishments as a significant issue for leagues such as the NBA.

'I 'd anticipate that a league crackdown on athletes backing sweepstakes sites refers when, not if,' Glaser included.

Neither an NBA representative nor the gamers' agents responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com e-mails.

Asked if their celebrity endorsers have an obligation to explain to clients the distinctions and resemblances between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that requires to be done.
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'We have full self-confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the representative stated. 'A few of our values are" our players precede" 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 in a different way.

'Celebrities who provide their names to dubious illegal gaming websites are, at a minimum, putting their reputations at risk along with courting civil and class actions by consumers who allege damage,' Glaser stated. 'There is likewise some risk that state regulators and state chief law officers rope celeb endorsers into enforcement efforts for facilitating prohibited sports betting.'

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