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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 unlawful gambling.

No, they weren't personally in participation, but the world-famous celebrities were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites offering both complimentary casino-style video games and rewarding prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of numerous gaming corporations, not to discuss lawsuit plaintiffs and state regulators, sweepstakes casinos serve as standard gambling establishments, only without the oversight, consumer defenses and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company deals with accusations of prohibited sports betting in a New york city suit that declares VGW utilizes celebrity endorsers to 'develop a veneer of authenticity' around its product. (See VGW's statement listed below)

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

Sweepstakes endorsers consist of a variety of celebs from sports betting 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 between standard gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes gambling establishments found online

Ryan Seacrest urges fans to dip into Chumba Casino, where many - however not all - games are free

Drake has a handle social sweeps gambling establishment, Stake, that he regularly promotes on social networks

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Instead, advertisements usually focus around the social element of the gambling establishments, while omitting the capacity for real gaming losses.

Others tempt clients with promises of rewards. One such operator, Stake, ran a social networks advertisement displaying Drake's automobiles, planes and estates before rotating to video footage of the rapper playing online casino-style video games.
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'Daddy, why do we have a lot cash?' check out the first caption on the screen.

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

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

A representative for an industry 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, the majority of the players on social-sweepstakes gambling establishments are sports betting complimentary.

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

Social gambling establishments provide clients an opportunity to play casino-style video games with pals. Players have the alternative to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged for genuine cash, but can be used to open different features within the video games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling customers to acquire other currency referred to as 'sweeps coins' that can be exchanged for cash 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 player informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous year after continuing to buy more coins in pursuit of money and other things of value.

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

Social sweeps casino Stake ran an ad revealing off Drake's cars and trucks, aircrafts and mansions
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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 but 7 states, which has actually helped to fuel the popularity of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, allow clients to submit mail-in ask for totally free sweeps coins, provided the players follow painfully specific guidelines. What's more, gamers are typically rewarded with sweeps coins merely for signing up, therefore providing a factor to attempt their hands at any number of casino games for a possibility to win - or lose - real cash.

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

According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competition is merely a method of promoting their bread and butter.
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'Social sweepstakes games are simply a form of online entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is needed to play at social casinos with sweepstakes rewards. Consumers never need to pay for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is an essential distinction between social sweeps and traditional online gaming sites like casinos.'

Think about the manner in which McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and fries that use them the chance to win rewarding prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the game itself doesn't satisfy the meaning of gambling in the US.

'Sweepstakes are a long-standing method for promoting all kinds of daily companies in the United States, everything from burgers to publication subscriptions to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of gambling market insiders, that argument doesn't cut it.

For beginners, gaming lawyer Daniel Wallach explains, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a well-defined beginning and end, consequently recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote genuine products like french fries, shakes, and the Filet-O-Fish.
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'They do not last permanently and they're typically not connected to casino-style games of chance,' Wallach informed DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments provide" casino-like" payouts, usually 80 percent or more of incomes, whereas the common payment percentage for a short-lived promotional sweepstakes is a minor share of the income earned by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet cafes that emerged in Florida, using customers the chance to play casino-style video games for real prizes. Many of those brick-and-mortar establishments have actually given that been shuttered over accusations of unlawful gaming.

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

Now, Wallach argues, social sweeps casinos must deal with similar analysis.

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been cited by courts and state chief law officer as key consider determining that a sweepstakes promo was in truth a guise for illegal sports betting.'

One of the gambling establishment market's leading trade companies, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, in many cases, enact new legislation on the concern.

'Consumers are being deprived of securities and states are forgoing significant tax and income chances as this sports betting replaces that carried out through managed channels,' checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal expenses and continued litigation.

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

In the current suit, which is mostly similar to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited sports betting business. '

Apple and Google have actually likewise been named as accuseds in suits for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's demand for remark.

'We generally do not talk about matters before the courts,' a VGW representative informed DailyMail.com through e-mail. 'However, we keep in mind that this claim has actually only just been submitted with the court and VGW has not been officially served.
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'We have full confidence in our compliance with all laws and where we run, and stay positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play games throughout many of The United States and Canada, as we have for more than a decade, creating not just great video games, user experiences and entertainment, however also ensuring this is done securely, properly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly common throughout the online social video games industry (and the US more broadly), and our basic practice is that we mean to strongly protect any claim which may be brought versus us.'

The concerns in between standard online gaming and sweepstakes casinos could show problematic for some celeb 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 ironic that expert athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the very same time the leagues want to project a strong stance versus prohibited gambling - especially when trying to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter received 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.

In addition to VGW, Apple and Google are being taken legal action against for hosting presumably unlawful sports betting sites

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

'I 'd anticipate that a league crackdown on professional athletes endorsing sweepstakes sites is a matter of when, not if,' Glaser included.

Neither an NBA spokesman 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 react to DailyMail.com emails.
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Asked if their celebrity endorsers have a responsibility to describe to consumers the distinctions and similarities between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that requires to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the representative said. '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 opponent of sweepstakes sites, sees things differently.

'Celebrities who lend their names to shady illegal gambling websites are, at a minimum, putting their credibilities at danger along with courting civil and class actions by customers who declare harm,' Glaser stated. 'There is likewise some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for helping with prohibited gambling.'

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