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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 prohibited gambling.

No, they weren’t personally in participation, however the world-famous celebs were conspicuously included in a slide presentation on social and sweepstakes casinos - the questionable websites offering both complimentary casino-style video games and financially rewarding prizes, such as cash, gift cards or cryptocurrency. In one advertisement, 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.

The websites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of many video gaming corporations, not to mention claim complainants and state regulators, sweepstakes gambling establishments act as traditional casinos, just without the oversight, consumer securities and tax laws. So not just 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 protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces allegations of prohibited gambling in a New york city lawsuit that declares VGW uses celebrity endorsers to ‘produce a veneer of authenticity’ around its item. (See VGW’s declaration listed below)

‘I’m uncertain” if you don’t trust us, you can rely on Paris Hilton” is a winning message for companies running multibillion-dollar prohibited operations out of locations like Malta, Isle of Man, or US mail drops,’ Friday’s presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.
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Sweepstakes endorsers consist of a range of celebs from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between standard sports betting and sweepstakes play.

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

Ryan Seacrest prompts fans to dip into Chumba Casino, where lots of - but 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 generally center around the social element of the gambling establishments, while omitting the potential for actual gambling losses.

Others tempt clients with promises of prizes. One such operator, Stake, ran a social media advertisement flaunting Drake’s vehicles, aircrafts and mansions before pivoting to video of the rapper playing online casino-style games.

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

Another caption discussed: ‘Because I never gave up.’

The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they’re not included with the former.

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

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

Social gambling establishments use consumers a chance to play casino-style games with buddies. Players have the alternative to buy valueless currency typically referred to as ‘gold coins,’ which can not be exchanged for real money, however can be utilized to open different functions within the games.
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But within the world of social casinos exists sweepstakes gaming, enabling customers to acquire other currency understood as ‘sweeps coins’ that can be exchanged for cash or other prizes.

And therein lies the capacity for financial losses, like the ones claimed 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 cash and other things of value.

The Philadelphia 76ers’ Paul George is seen promoting a Worldwide Poker event
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Social sweeps gambling establishment Stake ran an ad revealing off Drake’s automobiles, planes 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 prohibited in all however 7 states, which has assisted to sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which don’t require usually need recognition. However, sites like Chumba will ask for IDs from players trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow clients to send mail-in demands for free sweeps coins, offered the gamers follow painfully particular guidelines. What’s more, gamers are typically rewarded with sweeps coins merely for signing up, thus providing a reason to try their hands at any number of casino video games for an opportunity to win - or lose - genuine money.

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

According to the stakeholders, their item is the totally free casino-style video gaming, and the real-stakes competitors is simply a method of promoting their support.

‘Social sweepstakes games are just a type of online entertainment,’ an SPGA spokesperson informed DailyMail.com by email. ‘No purchase is needed to play at social casinos with sweepstakes rewards. Consumers never ever need to spend for an opportunity to win prizes. That absence of a purchase requirement - or” factor to consider” - is a crucial difference between social sweeps and standard online gambling sites like gambling establishments.’

Consider the manner in which McDonald’s utilizes its annual Monopoly video game to promote its food: Customers aren’t paying to gamble, but rather they’re purchasing hamburgers and french fries that offer them the chance to win lucrative rewards, such as a $1 million .
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And without a purchase requirement, or ‘consideration’, the game itself doesn’t fulfill the meaning of gambling in the US.

‘Sweepstakes are an enduring approach for promoting all type of everyday organizations in the United States, everything from hamburgers to publication subscriptions to coffee and home enhancement shops,’ the SPGA spokesperson told DailyMail.com. ‘Sweepstakes promos are frequently utilized by a who’s who of home 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 distinct start and end, thereby recommending the sweepstakes is not the fast-food giant’s primary product. Instead, the sweepstakes is being used to promote genuine items like french fries, shakes, and the Filet-O-Fish.

‘They don’t last permanently and they’re usually not tied to casino-style games of possibility,’ Wallach informed DailyMail.com. ‘They’re simply cash free gifts.

‘The sweepstakes [gambling establishments] have none of the characteristics typically related to McDonald’s-design sweepstakes promotions,’ Wallach continued. ‘Besides running in eternity, the sweepstakes gambling establishments provide” casino-like” payments, normally 80 percent or more of profits, whereas the common payment percentage for a temporary promotional sweepstakes is an insignificant share of the profits made by the company [usually less than one percent]’

Wallach fasts to compare the online social sweeps casinos to the internet cafes that emerged in Florida, using consumers the chance to play casino-style games for real rewards. Much of those brick-and-mortar facilities have actually considering that been shuttered over claims of prohibited sports betting.

DJ Khaled is amongst several celeb spokespeople for VGW’s Global Poker brand name

Now, Wallach argues, social sweeps casinos must face similar analysis.

‘These differences are not approximate,’ Wallach stated of social sweeps casinos. ‘They have consistently been pointed out by courts and state lawyer generals as crucial aspects in figuring out that a sweepstakes promo remained in truth a guise for unlawful gambling.’

One of the casino industry’s leading trade organizations, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, in some cases, enact new legislation on the concern.

‘Consumers are being denied of securities and states are forgoing considerable tax and revenue chances as this gambling replaces that performed through regulated channels,’ checked out a well-circulated AGA memo.

And then there are the complainants who have sued social gambling establishments in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal costs and continued litigation.

Michael Phelps has signed an offer with the VGW Group, which owns Global Poker

In the current lawsuit, which is mainly similar to its predecessors, New York state homeowners 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 gaming enterprise. ‘

Apple and Google have likewise been called as offenders in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com’s demand for remark.

‘We usually don’t discuss matters before the courts,’ a VGW spokesperson told DailyMail.com through email. ‘However, we note that this claim has only just been filed with the court and VGW has actually not been formally served.

‘We have full self-confidence in our compliance with all laws and guidelines where we operate, and remain confident 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, producing not only fantastic video games, user experiences and home entertainment, but likewise ensuring this is done securely, responsibly and at the highest level of standards.

‘More broadly, we ’d reiterate that class actions and other lawsuits and arbitrations are relatively common throughout the online social games market (and the US more broadly), and our standard practice is that we intend to strongly protect any claim which may be brought versus us.’

The issues between standard online gambling and sweepstakes gambling establishments could prove bothersome 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 paradoxical that professional athletes are hawking prohibited sports betting wagering ‘sweeps’ sites while at the exact same time the leagues wish to forecast a strong stance versus illegal sports betting - particularly when trying to tamp down the periodic gaming scandal,’ Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter received a life time restriction from the NBA over claims he conspired with bettors. However, to be clear, Porter’s scandal is unrelated to anything involving social or sweepstakes casinos.

Together with VGW, Apple and Google are being taken legal action against for hosting allegedly unlawful sports betting websites

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

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

Neither an NBA spokesperson nor the gamers’ representatives reacted to DailyMail.com’s ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com e-mails.

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

‘We have full self-confidence in our influencer and ambassadorial partnerships, and our business 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 whatever we do.’

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

‘Celebrities who lend their names to shady unlawful sports betting sites are, at a minimum, putting their credibilities at threat as well as courting civil and class actions by consumers who declare harm,’ Glaser stated. ‘There is likewise some risk that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for helping with prohibited gaming.’

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