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 stars were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable sites providing both totally free casino-style games and financially rewarding prizes, such as money, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are just 2 cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of lots of gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes gambling establishments serve as traditional casinos, only without the oversight, customer securities and tax laws. So not only 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 in 2015 alone. Now the company deals with allegations of unlawful gaming in a New York suit that declares VGW utilizes star endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's statement below)

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

Sweepstakes endorsers include a variety of stars from sports betting 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 differences between standard gambling and sweepstakes play.

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

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

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

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

Others lure consumers with promises of rewards. One such operator, Stake, ran a social networks advertisement displaying Drake's cars and trucks, aircrafts and estates before rotating to video 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 described: 'Because I never offered up.'

The discrepancy between gaming sites and social or sweepstakes casinos is a bit complex, but 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), described its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the gamers on social-sweepstakes casinos are playing for complimentary.

'Most social sweeps customers never purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller sized than the common deposit or bet size at real-money online sports betting sites.'

Social casinos offer consumers an opportunity to play casino-style games with good friends. Players have the alternative to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged for genuine cash, however can be utilized to open numerous functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing consumers to get other currency called 'sweeps coins' that can be exchanged for cash or other prizes.

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One player 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 gambling establishment Stake ran an advertisement displaying Drake's vehicles, airplanes 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 banned in all however seven states, which has actually assisted to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable consumers to send mail-in ask for complimentary sweeps coins, provided the players follow painfully particular directions. What's more, players are often rewarded with sweeps coins merely for signing up, thus giving them a factor to try their hands at any number of gambling establishment games for a possibility to win - or lose - genuine cash.

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

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

'Social sweepstakes video games are just a type of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never need to spend for a chance to win prizes. That lack of a purchase requirement - or" factor to consider" - is a crucial distinction between social sweeps and traditional online gambling websites like gambling establishments.'

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

And without a purchase requirement, or 'consideration', the game itself does not fulfill the meaning of sports betting in the US.

'Sweepstakes are an enduring method for promoting all type of everyday companies in the United States, whatever from burgers to magazine memberships to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are regularly 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 experts, that argument does not cut it.

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

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

'The sweepstakes [gambling establishments] have none of the qualities typically related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payouts, typically 80 percent or more of profits, whereas the typical payment portion for a short-term marketing sweepstakes is a trivial share of the earnings made by the business [normally less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the internet coffee shops that sprang up in Florida, offering customers the opportunity to play casino-style games for real rewards. Much of those brick-and-mortar facilities have actually considering that been shuttered over claims of unlawful gambling.

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

Now, Wallach argues, social sweeps gambling establishments need to face similar examination.

'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have actually consistently been pointed out by courts and state chief law officer as essential aspects in figuring out that a sweepstakes promo was in reality a guise for prohibited sports betting.'

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

'Consumers are being deprived of securities and states are giving up significant tax and earnings chances as this sports betting replaces that conducted through controlled channels,' checked out a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four 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 expenses and continued litigation.

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

In the most recent claim, which is largely similar to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gaming business. '

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

'We usually do not comment on matters before the courts,' a VGW representative informed DailyMail.com through e-mail. '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 confidence in our compliance with all laws and policies where we operate, and remain positive 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 years, creating not only great games, user experiences and home entertainment, but likewise guaranteeing this is done securely, responsibly and at the highest level of requirements.

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

The concerns between traditional online gaming and sweepstakes gambling establishments might prove bothersome 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 conventional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' sites while at the exact same time the leagues wish to forecast a strong stance against illegal sports betting - specifically when trying to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

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

In addition to VGW, Apple and Google are being taken legal action against for hosting presumably prohibited gambling sites

Regardless, Glaser sees sweepstakes casinos as a major issue for leagues such as the NBA.

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

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 ignored to respond to DailyMail.com emails.

Asked if their star endorsers have a duty to describe to clients the differences and resemblances in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our company practices more broadly,' the spokesperson said. 'Some of our values are" our gamers come initially" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who lend their names to dubious prohibited gaming websites are, at a minimum, putting their credibilities at risk along with courting civil and class actions by customers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for helping with prohibited gaming.'

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