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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 sports betting.

No, they weren't personally in presence, however the world-famous stars were conspicuously included in a slide presentation on social and sweepstakes gambling establishments - the controversial websites using both complimentary casino-style video games and lucrative rewards, such as money, gift 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 two cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of lots of gaming corporations, not to point out lawsuit complainants and state regulators, sweepstakes gambling establishments serve as traditional casinos, just without the oversight, customer protections 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.
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One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the company deals with allegations of illegal gambling in a New york city suit that claims VGW uses star endorsers to 'create a veneer of legitimacy' around its item. (See VGW's statement below)

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

Sweepstakes endorsers include a series of celebrities from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between traditional sports betting and sweepstakes play.

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

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

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

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Instead, ads usually focus around the social aspect of the gambling establishments, while omitting the potential for real gambling losses.
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Others tempt consumers with promises of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's automobiles, airplanes and mansions before pivoting to footage of the rap artist playing online casino-style games.

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

Another caption discussed: 'Because I never quit.'

The discrepancy between sports betting websites and social or sweepstakes casinos is a bit complicated, 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), discussed its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes casinos are sports betting totally free.

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

Social gambling establishments use clients a possibility to play casino-style video games with friends. Players have the alternative to purchase valueless currency often described as 'gold coins,' which can not be exchanged genuine money, but can be used to unlock numerous features within the video games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling consumers to acquire other currency referred to as '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 City. One gamer 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 cash and other things of value.

The Philadelphia 76ers' Paul George is seen promoting a Global Poker event

Social sweeps casino Stake ran an advertisement revealing off Drake's cars, aircrafts and mansions

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

Traditional online gambling establishments are banned 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 generally need recognition. However, websites like Chumba will request for IDs from gamers attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable clients to send mail-in requests for totally free sweeps coins, provided the players follow painfully particular instructions. What's more, gamers are frequently rewarded with sweeps coins merely for registering, therefore providing a factor to attempt their hands at any number of casino video games for a chance to win - or lose - real cash.

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

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

'Social sweepstakes video games are merely a type 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 prizes. That lack of a purchase requirement - or" consideration" - is an essential distinction in between social sweeps and standard online gaming websites like casinos.'

Consider the method that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and fries that offer them the possibility to win rewarding prizes, such as a $1 million jackpot.
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And without a purchase requirement, or 'factor to consider', the video game itself doesn't meet the definition of gaming in the US.

'Sweepstakes are a long-standing technique for promoting all sort of daily services in the United States, whatever from burgers to publication subscriptions to coffee and home improvement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are routinely utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling market experts, that argument doesn't cut it.

For beginners, gaming attorney Daniel Wallach mentions, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined beginning and end, therefore suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're generally not connected to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes frequently related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payments, typically 80 percent or more of profits, whereas the typical payout percentage for a momentary promotional sweepstakes is a trivial share of the income made by the business [generally less than one percent]'

Wallach is quick to compare the online social sweeps gambling establishments to the web cafes that emerged in Florida, offering consumers the opportunity to play casino-style games for real rewards. A number of those brick-and-mortar facilities have because been shuttered over accusations of prohibited gambling.
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DJ Khaled is among numerous celeb spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps gambling establishments ought to face comparable scrutiny.

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been pointed out by courts and state lawyer generals as crucial elements in figuring out that a sweepstakes promo was in reality a guise for illegal sports betting.'

One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being deprived of securities and states are forgoing considerable tax and profits chances as this gaming replaces that conducted through regulated channels,' checked out a well-circulated AGA memo.

And then 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 four separate cases in Kentucky without admitting any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, saying the settlement was made to avoid legal expenses and continued litigation.

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

In the current lawsuit, which is mostly 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 'illegal gambling enterprise. '

Apple and Google have also been named as offenders in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's request for comment.

'We typically do not discuss matters before the courts,' a VGW representative informed DailyMail.com via e-mail. 'However, we note that this claim has actually 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 regulations where we operate, and stay positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout many of The United States and Canada, as we have for more than a years, developing not just excellent video games, user experiences and entertainment, but also guaranteeing this is done securely, responsibly and at the highest level of requirements.

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly common across the online social video games industry (and the US more broadly), and our standard practice is that we mean to intensely protect any claim which might be brought against us.'

The concerns between conventional online gaming and sweepstakes casinos might prove bothersome for some celebrity endorsers.

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 traditional gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking unlawful sports betting 'sweeps' websites while at the very same time the leagues wish to predict a strong position against prohibited gambling - especially when attempting to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being sued for hosting apparently prohibited sports betting websites

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

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

Neither an NBA spokesman nor the gamers' representatives reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com e-mails.

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

'We have complete confidence in our influencer and ambassadorial partnerships, and our company 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 worths at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.

'Celebrities who provide their names to shady illegal gaming websites are, at a minimum, putting their reputations at threat as well as courting civil and class actions by customers who declare harm,' Glaser said. 'There is also some risk that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for helping with prohibited gambling.'

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