The smiling faces of Paris Hilton and Ryan Seacrest made surprise looks before the Louisiana Senate for Friday's hearing on prohibited sports betting.

No, they weren't personally in presence, however the world-famous celebs were conspicuously included in a slide discussion on social and sweepstakes casinos - the controversial websites using both totally free casino-style games and lucrative rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody 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 simply two cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of lots of gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes gambling establishments act as traditional gambling establishments, only without the oversight, consumer securities and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't based on regulative hurdles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the business faces accusations of prohibited gaming in a New York claim that claims VGW utilizes celeb endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's statement listed below)

'I'm unsure" if you do not trust us, you can rely on Paris Hilton" is a winning message for companies running multibillion-dollar unlawful operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.
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Sweepstakes endorsers consist of a variety of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions in between standard gambling and sweepstakes play.

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

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

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

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Instead, advertisements usually center around the social element of the gambling establishments, while omitting the potential for actual sports betting losses.

Others lure customers with pledges of prizes. One such operator, Stake, ran a social networks advertisement displaying Drake's cars, airplanes and mansions before pivoting to video footage of the rapper playing online casino-style video games.

'Daddy, why do we have so much cash?' check out the very first caption on the screen.
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Another caption described: 'Because I never offered up.'

The disparity in between gambling websites and social or sweepstakes gambling establishments is a bit intricate, but operators of the latter insist they're not included with the former.

A spokesperson for a market 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, most of the players on social-sweepstakes casinos are sports betting totally free.

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

Social gambling establishments offer consumers a chance to play casino-style video games with buddies. Players have the choice to purchase worthless currency typically referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be utilized to open different features within the video games.

But within the world of social casinos exists sweepstakes gaming, permitting clients to get other currency understood as 'sweeps coins' that can be exchanged for cash or other prizes.

And therein lies the capacity for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. 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 cash and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad displaying Drake's cars and trucks, aircrafts and estates

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 seven states, which has actually assisted to sustain the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not require generally need recognition. However, sites like Chumba will ask for IDs from gamers attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable customers to send mail-in demands for free sweeps coins, supplied the players follow painfully particular directions. What's more, gamers are often rewarded with sweeps coins merely for signing up, thus providing a reason to try their hands at any number of gambling establishment games for a chance to win - or lose - real money.

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

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

'Social sweepstakes games are merely a kind of online home 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" factor to consider" - is a vital difference between social sweeps and traditional online sports betting sites like gambling establishments.'

Consider the manner in which McDonald's uses its yearly 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 financially rewarding prizes, such as a $1 million jackpot.

And without a requirement, or 'factor to consider', the game itself doesn't satisfy the definition of gambling in the US.

'Sweepstakes are an enduring approach for promoting all type of everyday businesses in the United States, everything from hamburgers to magazine memberships to coffee and home improvement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of gambling industry insiders, that argument does not cut it.

For starters, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game does not run forever. Rather, it has a distinct start and end, therefore recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're normally not connected to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [gambling establishments] have none of the attributes frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payouts, normally 80 percent or more of earnings, whereas the normal payment percentage for a short-lived promotional sweepstakes is a trivial share of the revenue earned by the business [usually less than one percent]'

Wallach is fast to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, offering customers the opportunity to play casino-style games for genuine rewards. A number of those brick-and-mortar facilities have actually since been shuttered over accusations of prohibited 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 similar examination.
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'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been mentioned by courts and state attorney general of the United States as essential consider identifying that a sweepstakes promo remained in reality a guise for illegal gambling.'

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

'Consumers are being denied of defenses and states are giving up significant tax and profits opportunities as this gambling replaces that performed through managed channels,' checked out a well-circulated AGA memo.

And then there are the plaintiffs who have actually sued social gambling establishments 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 consented to pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal expenses and continued lawsuits.

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

In the most recent lawsuit, which is largely similar to its predecessors, New York state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gambling business. '

Apple and Google have actually likewise been called as accuseds in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's ask for comment.
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'We typically do not discuss matters before the courts,' a VGW representative told DailyMail.com via e-mail. 'However, we note that this claim has only simply been filed with the court and VGW has actually not been officially served.

'We have complete confidence in our compliance with all laws and guidelines where we operate, and remain positive about the future,' the representative continued. 'We continue to use our free-to-play video games across many of The United States and Canada, as we have for more than a decade, producing not just excellent video games, user experiences and home entertainment, but likewise guaranteeing this is done safely, properly and at the greatest level of standards.

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

The issues in between traditional online gambling and sweepstakes gambling establishments could show problematic for some star endorsers.
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Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand name while the NBA is partnered with standard video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the same time the leagues desire to predict a strong stance versus prohibited sports betting - specifically when attempting to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

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

Together with VGW, Apple and Google are being taken legal action against for hosting presumably unlawful gambling sites

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

'I 'd expect that a league crackdown on professional athletes backing sweepstakes websites refers when, not if,' Glaser included.

Neither an NBA spokesman nor the gamers' agents reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com e-mails.

Asked if their celebrity endorsers have a duty to discuss to customers the distinctions and similarities in between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.

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

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.

'Celebrities who lend their names to shady illegal gaming sites are, at a minimum, putting their reputations at risk in addition to courting civil and class actions by customers who declare harm,' Glaser said. 'There is likewise some threat that state regulators and state lawyers general rope celebrity endorsers into enforcement efforts for facilitating unlawful gambling.'

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