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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 illegal sports betting.
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No, they weren't personally in presence, however the world-famous celebrities were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable websites providing both complimentary casino-style video games and financially rewarding rewards, such as cash, gift 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 lawsuits. In the eyes of many gaming corporations, not to discuss lawsuit plaintiffs and state regulators, sweepstakes casinos function as traditional casinos, just without the oversight, consumer defenses and tax laws. So not just can they avoid the steep 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative hurdles 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 business faces allegations of illegal gaming in a New york city claim that declares VGW utilizes star endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's declaration below)

'I'm unsure" if you don't trust us, you can trust 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 speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a variety of stars from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions between standard gambling and sweepstakes play.

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

Ryan Seacrest urges fans to play at Chumba Casino, where numerous - however not all - games are complimentary

Drake has a deal with social sweeps gambling establishment, Stake, that he routinely promotes on social networks

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Instead, ads typically focus around the social aspect of the gambling establishments, while leaving out the capacity for real gambling losses.

Others lure consumers with promises of rewards. One such operator, Stake, ran a social networks ad revealing off Drake's vehicles, planes and estates before rotating to video of the rap artist playing online casino-style video games.

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

Another caption explained: 'Because I never ever offered up.'

The disparity in between gambling sites and social or sweepstakes casinos is a bit complicated, but 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), explained its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes casinos are sports betting free.

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

Social casinos use customers a chance to play casino-style video games with good friends. Players have the choice to buy worthless currency often described as 'gold coins,' which can not be exchanged genuine cash, however can be used to open various features within the games.

But within the world of social gambling establishments exists sweepstakes gaming, enabling clients to acquire other currency called 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the capacity for monetary losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York. 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 value.

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

Social sweeps casino 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 banned in all however 7 states, which has assisted to sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not need generally need identification. However, websites like Chumba will ask for IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable consumers to send mail-in ask for totally free sweeps coins, offered the players follow painfully specific directions. What's more, gamers are typically rewarded with sweeps coins merely for signing up, thereby offering them a factor to try their hands at any number of gambling establishment games for a to win - or lose - real money.

So why are sweepstakes sites permitted to operate in 48 states, while online gambling establishments are banned in all but 7?

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

'Social sweepstakes video games are merely a kind of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is needed 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 crucial difference between social sweeps and conventional online gaming websites like gambling establishments.'

Think about the manner in which McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and french fries that offer them the opportunity to win lucrative rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the video game itself does not meet the definition of sports betting in the US.
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'Sweepstakes are an enduring technique for promoting all kinds of daily businesses in the United States, everything from hamburgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting market insiders, that argument does not cut it.
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For beginners, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game does not run forever. 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 fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're generally not tied to casino-style video games of opportunity,' Wallach informed DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] possess none of the qualities frequently associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments offer" casino-like" payouts, typically 80 percent or more of profits, whereas the common payment percentage for a momentary advertising sweepstakes is an unimportant share of the earnings made by the company [typically less than one percent]'

Wallach is fast to liken the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, providing clients the opportunity to play casino-style video games for genuine rewards. Many of those brick-and-mortar establishments have actually given that been shuttered over claims of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos ought to deal with comparable analysis.
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'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have actually consistently been pointed out by courts and state lawyer generals as essential consider determining that a sweepstakes promotion was in fact a guise for illegal gaming.'

One of the casino market's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in many cases, enact brand-new legislation on the concern.

'Consumers are being deprived of protections and states are passing up substantial tax and revenue chances as this sports betting replaces that conducted through regulated channels,' read a well-circulated AGA memo.

And after that there are the plaintiffs who have sued social gambling establishments in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 different cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action suit, saying the settlement was made to avoid legal costs and continued litigation.

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

In the current suit, which is mainly similar to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal sports betting enterprise. '

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

'We normally don't comment on matters before the courts,' a VGW spokesperson told DailyMail.com by means of e-mail. 'However, we note that this claim has actually only just been submitted with the court and VGW has actually not been officially served.

'We have full confidence in our compliance with all laws and policies where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games across the majority of The United States and Canada, as we have for more than a decade, developing not only terrific video games, user experiences and home entertainment, but likewise ensuring this is done safely, responsibly and at the highest level of requirements.

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

The issues in between standard online sports betting and sweepstakes casinos might show bothersome for some celebrity endorsers.
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Towns, a star center with the Knicks, and the 76ers' George both back VGW's Global Poker brand name while the NBA is partnered with standard video gaming titans like FanDuel and DraftKings.
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'It's paradoxical that expert athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues wish to forecast a strong position versus prohibited gaming - specifically when trying to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

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

Along with VGW, Apple and Google are being demanded hosting supposedly illegal gambling 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 backing sweepstakes sites refers when, not if,' Glaser included.

Neither an NBA representative nor the players' representatives reacted to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise overlooked to respond to DailyMail.com e-mails.

Asked if their star endorsers have a responsibility to explain to clients the differences and similarities between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that needs to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative stated. 'Some of our worths are" our players precede" 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 dubious illegal sports betting sites are, at a minimum, putting their credibilities at threat in addition to courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in prohibited sports betting.'

New YorkNBADrakeParis Hilton
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