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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 unlawful gambling.

No, they weren't personally in presence, but the world-famous celebs were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the questionable websites providing both totally free casino-style games and 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.
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The sites are just two cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of lots of gaming corporations, not to discuss claim complainants and state regulators, sweepstakes casinos serve as conventional casinos, just without the oversight, customer securities and tax laws. So not just can they avoid the high 24-percent federal gaming levy, however sweepstakes operators aren't based on regulatory 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 company faces accusations of unlawful sports betting in a New york city claim that declares VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's statement below)

'I'm not sure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar unlawful 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 consist of a series of celebrities 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 use any differences in between conventional gaming and sweepstakes play.

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

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

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

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Instead, ads usually focus around the social element of the gambling establishments, while leaving out the capacity for real sports betting losses.
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Others tempt clients with promises of rewards. One such operator, Stake, ran a social networks ad showing off Drake's cars, airplanes and mansions before rotating to footage of the rapper playing online casino-style video games.

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

Another caption described: 'Because I never quit.'

The discrepancy between sports betting websites and social or sweepstakes casinos is a bit intricate, however operators of the latter insist they're not included with the previous.

A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, the majority of the players on social-sweepstakes casinos are sports betting totally free.

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

Social casinos provide consumers a possibility to play casino-style games with good friends. Players have the alternative to buy valueless currency often described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to unlock different features within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling clients to get other currency understood as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the potential for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One player informed 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 value.

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

Social sweeps gambling establishment Stake ran an ad revealing off Drake's cars, planes and estates

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

Traditional online casinos are prohibited in all but 7 states, which has actually assisted to fuel the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not need normally need recognition. However, websites like Chumba will request IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in ask for complimentary sweeps coins, supplied the players follow painfully particular directions. What's more, players are frequently rewarded with sweeps coins simply for registering, thus providing a reason to try their hands at any variety of gambling establishment video games for an opportunity to win - or lose - genuine cash.

So why are sweepstakes websites permitted to run in 48 states, while online gambling establishments are prohibited in all however 7?

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

'Social sweepstakes video games are simply a type of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never need to pay for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is a vital difference between social sweeps and traditional online sports betting sites like casinos.'

Think of the way that McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and french fries that provide them the possibility to win lucrative rewards, such as a $1 million jackpot.
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And without a purchase requirement, or 'factor to consider', the video game itself does not meet the meaning of gaming in the US.

'Sweepstakes are an enduring approach for promoting all sort of daily businesses in the United States, whatever from burgers to magazine subscriptions to coffee and home enhancement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are routinely utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market experts, that argument does not cut it.

For beginners, gaming attorney Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct beginning and end, therefore suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real items like fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [casinos] have none of the attributes commonly connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments offer" casino-like" payments, normally 80 percent or more of earnings, whereas the normal payment percentage for a short-lived promotional sweepstakes is a trivial share of the income earned by the company [typically less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the web coffee shops that emerged in Florida, using consumers the opportunity to play casino-style video games for real prizes. A lot of those brick-and-mortar establishments have because been shuttered over allegations of unlawful gambling.

DJ Khaled is among a number of celeb spokespeople for VGW's Global Poker brand name

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

'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been pointed out by courts and state attorney generals as crucial elements in identifying that a sweepstakes promo remained in reality a guise for illegal gambling.'

Among the casino industry's leading trade companies, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, in some cases, enact brand-new legislation on the issue.

'Consumers are being deprived of securities and states are passing up considerable tax and earnings opportunities as this gambling replaces that performed through managed channels,' read a well-circulated AGA memo.

And then there are the plaintiffs who have sued social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued lawsuits.

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

In the most recent suit, which is mainly comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful sports betting enterprise. '

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

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

'We have full in our compliance with all laws and policies where we operate, and stay 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 years, developing not just terrific video games, user experiences and entertainment, however also guaranteeing this is done safely, responsibly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are relatively common across the online social video games market (and the US more broadly), and our basic practice is that we intend to intensely protect any claim which may be brought versus us.'

The issues in between traditional online gambling and sweepstakes gambling establishments might 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 conventional gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking prohibited sports betting 'sweeps' websites while at the same time the leagues want to project a strong stance versus unlawful sports betting - specifically when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter got a lifetime restriction from the NBA over allegations 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 sued for hosting supposedly illegal sports betting 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 endorsing sweepstakes websites 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 also disregarded to react to DailyMail.com e-mails.

Asked if their celebrity endorsers have an obligation to discuss to clients the distinctions and similarities between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative stated. 'Some of our worths are" our gamers precede" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things in a different way.
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'Celebrities who lend their names to dubious unlawful sports betting websites are, at a minimum, putting their credibilities at danger as well as courting civil and class actions by customers who allege damage,' Glaser stated. 'There is likewise some threat that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for helping with illegal sports betting.'

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