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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 illegal gaming.
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No, they weren't personally in presence, however the world-famous celebs were notably consisted of in a slide discussion on social and sweepstakes gambling establishments - the controversial sites using both totally free casino-style video games and profitable rewards, such as cash, gift 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.
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The sites are just two cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of numerous video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments act as conventional gambling establishments, just without the oversight, customer defenses and tax laws. So not just can they prevent the high 24-percent federal gaming levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces accusations of illegal gambling in a New york city claim that claims VGW utilizes star endorsers to ‘produce a veneer of legitimacy’ around its item. (See VGW's statement listed below)

'I'm not sure” if you don't trust us, you can rely on Paris Hilton” is a winning message for business operating 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 consist of a variety of stars 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 distinctions between traditional gaming and sweepstakes play.

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

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

Drake has an offer with social sweeps gambling establishment, Stake, that he regularly promotes on social media

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Instead, ads generally focus around the social element of the casinos, while omitting the capacity for actual gambling losses.

Others tempt clients with of rewards. One such operator, Stake, ran a social media ad displaying Drake's automobiles, planes and mansions before rotating to video of the rap artist playing online casino-style video games.

'Daddy, why do we have a lot cash?’ read the very first caption on the screen.

Another caption explained: ‘Because I never gave up.‘

The discrepancy between sports betting websites and social or sweepstakes gambling establishments is a bit complex, but 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), discussed 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 consumers never ever purchase,’ the SPGA spokesperson informed DailyMail.com. ‘The minority of consumers who make purchases do so in amounts far smaller sized than the normal deposit or wager size at real-money online gambling sites.‘

Social gambling establishments use consumers a chance to play casino-style games with buddies. Players have the choice to purchase worthless currency frequently referred to as ‘gold coins,’ which can not be exchanged genuine cash, however can be used to open numerous features within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, allowing consumers to acquire 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 complainants in Florida, Georgia, New Jersey and New York City. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to buy more coins in pursuit of cash and other things of worth.

The Philadelphia 76ers’ Paul George is seen promoting a Global Poker occasion

Social sweeps gambling establishment Stake ran an ad displaying Drake's cars and trucks, planes and mansions

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

Traditional online gambling establishments 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 don't require generally require identification. However, sites like Chumba will request IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit clients to submit mail-in ask for free sweeps coins, offered the gamers follow painfully specific instructions. What's more, players are frequently rewarded with sweeps coins just for signing up, consequently providing a reason to attempt their hands at any variety of casino video games for a chance to win - or lose - real money.

So why are sweepstakes sites allowed to run in 48 states, while online casinos are banned in all however 7?

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

'Social sweepstakes video games are merely a form of online home entertainment,’ an SPGA representative informed DailyMail.com by email. ‘No purchase is required to dip into social casinos with sweepstakes rewards. Consumers never need to pay for a chance to win rewards. That absence of a purchase requirement - or” factor to consider” - is an important distinction between social sweeps and traditional online gaming websites like casinos.‘

Think about the manner in which McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that provide them the opportunity to win profitable rewards, such as a $1 million prize.

And without a purchase requirement, or ‘factor to consider’, the game itself doesn't fulfill the definition of sports betting in the US.

'Sweepstakes are a long-standing approach for promoting all type of daily services in the United States, whatever from hamburgers to publication memberships to coffee and home enhancement stores,’ the SPGA representative told 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 sports betting market insiders, that argument doesn't cut it.

For beginners, gaming lawyer Daniel Wallach points out, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined beginning and end, thus recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real products like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're typically not connected to casino-style video games of opportunity,’ Wallach told DailyMail.com. ‘They're just cash free gifts.

'The sweepstakes [casinos] possess none of the qualities typically connected with McDonald's-style sweepstakes promotions,’ Wallach continued. ‘Besides running in all time, the sweepstakes gambling establishments provide” casino-like” payments, generally 80 percent or more of revenues, whereas the common payment percentage for a short-term advertising sweepstakes is an insignificant share of the revenue made by the business [normally less than one percent]‘

Wallach fasts to liken the online social sweeps gambling establishments to the web coffee shops that sprang up in Florida, providing customers the chance to play casino-style games for genuine rewards. Much of those brick-and-mortar facilities have because been shuttered over claims of illegal sports betting.

DJ Khaled is among numerous star spokespeople for VGW's Global Poker brand

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

'These differences are not approximate,’ Wallach stated of social sweeps gambling establishments. ‘They have repeatedly been cited by courts and state chief law officer as key consider figuring out that a sweepstakes promotion was in reality a guise for unlawful gambling.‘

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

‘Consumers are being deprived of securities and states are passing up substantial tax and earnings chances as this gambling replaces that conducted through regulated channels,’ checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without admitting any wrongdoing, according to the Washington Post. Meanwhile VGW concurred 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 actually signed a handle the VGW Group, which owns Global Poker

In the latest claim, which is mostly comparable to its predecessors, New york city 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 ‘unlawful gambling enterprise. ‘
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Apple and Google have also been named as accuseds in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's request for remark.

'We usually don't comment on matters before the courts,’ a VGW spokesperson told DailyMail.com by means of email. ‘However, we keep in mind that this claim has only simply been filed with the court and VGW has actually not been officially served.

'We have full self-confidence in our compliance with all laws and guidelines where we operate, and remain confident about the future,’ the representative continued. ‘We continue to provide our free-to-play games across most of North America, as we have for more than a decade, creating not just great video games, user experiences and home entertainment, however also guaranteeing this is done securely, properly and at the highest level of requirements.

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

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

'It's paradoxical that professional athletes are hawking prohibited sports betting ‘sweeps’ sites while at the exact same time the leagues wish to predict a strong stance versus prohibited gambling - particularly when trying to tamp down the occasional sports betting scandal,’ Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being taken legal action against for hosting presumably prohibited gambling websites

Regardless, Glaser sees sweepstakes casinos as a significant 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 included.

Neither an NBA spokesman nor the players’ agents responded to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com e-mails.

Asked if their celeb endorsers have a responsibility to explain to customers the differences and resemblances between iGaming and sweepstakes casinos, VGW firmly 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 values 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 sites, sees things differently.

'Celebrities who provide their names to dubious prohibited gaming sites are, at a minimum, putting their track records at danger along with courting civil and class actions by consumers who declare damage,’ Glaser said. ‘There is also some risk that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for helping with prohibited gaming.‘

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