The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday’s hearing on illegal gaming.

No, they weren’t personally in participation, however the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites using both free casino-style video games and rewarding rewards, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can ‘bet totally free,’ while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are just 2 cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of many video gaming corporations, not to mention suit complainants and state regulators, sweepstakes gambling serve as standard gambling establishments, just without the oversight, consumer securities and tax laws. So not only can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren’t subject to regulative obstacles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the business faces allegations of prohibited sports betting in a New york city lawsuit that claims VGW uses celebrity endorsers to ‘produce a veneer of legitimacy’ 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 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, told DailyMail.com.
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Sweepstakes endorsers consist of a variety of stars from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between standard gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes casinos found online
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Ryan Seacrest prompts fans to play at Chumba Casino, where numerous - but not all - games are free
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Drake has an offer with social sweeps gambling establishment, Stake, that he regularly touts on social networks

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Instead, advertisements generally focus around the social aspect of the gambling establishments, while omitting the potential for actual gambling losses.

Others lure clients with guarantees of prizes. One such operator, Stake, ran a social networks ad revealing off Drake’s automobiles, airplanes and estates before pivoting to video of the rapper playing online casino-style games.

‘Daddy, why do we have a lot 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 intricate, however operators of the latter insist they’re not involved with the former.
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A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the players on social-sweepstakes gambling establishments are playing for complimentary.

‘Most social sweeps customers never 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 bet size at real-money online sports betting websites.’
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Social gambling establishments offer clients an opportunity to play casino-style games with buddies. Players have the choice to purchase valueless currency often referred to as ‘gold coins,’ which can not be exchanged genuine money, but can be utilized to unlock various functions within the video games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to obtain other currency understood as ‘sweeps coins’ that can be exchanged for cash or other rewards.

And therein lies the potential for monetary losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York. One player told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous year after continuing to purchase more coins in pursuit of cash and other things of worth.
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The Philadelphia 76ers’ Paul George is seen promoting a Global Poker occasion

Social sweeps gambling establishment Stake ran an ad flaunting Drake’s cars, airplanes 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 however 7 states, which has actually helped to sustain the appeal of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, permit clients to submit mail-in ask for free sweeps coins, offered the gamers follow painfully specific guidelines. What’s more, gamers are often rewarded with sweeps coins merely for signing up, thus providing a reason to attempt their hands at any variety of gambling establishment video games for an opportunity to win - or lose - real cash.

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

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

‘Social sweepstakes video games are just a type of online home entertainment,’ an SPGA representative informed DailyMail.com by e-mail. ‘No purchase is required to play at social casinos with sweepstakes rewards. Consumers never ever have to spend for an opportunity to win rewards. That absence of a purchase requirement - or” factor to consider” - is a crucial difference between social sweeps and standard online gaming sites like casinos.’

Consider the way that McDonald’s utilizes its yearly Monopoly game to promote its food: Customers aren’t paying to bet, but rather they’re buying hamburgers and fries that offer them the opportunity to win lucrative rewards, such as a $1 million prize.

And without a purchase requirement, or ‘consideration’, the game itself doesn’t satisfy the definition of gaming in the US.

‘Sweepstakes are a long-standing approach for promoting all kinds of daily companies in the United States, whatever from hamburgers to publication memberships to coffee and home improvement shops,’ the SPGA spokesperson told DailyMail.com. ‘Sweepstakes promos are regularly utilized by a who’s who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.’
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But to numerous gambling industry insiders, that argument doesn’t cut it.

For beginners, video gaming lawyer Daniel Wallach points out, McDonald’s Monopoly video game does not run forever. Rather, it has a well-defined beginning and end, consequently recommending the sweepstakes is not the fast-food giant’s main item. Instead, the sweepstakes is being utilized to promote real items like fries, shakes, and the Filet-O-Fish.

‘They don’t last permanently and they’re typically not tied to casino-style video games of chance,’ Wallach told DailyMail.com. ‘They’re just cash free gifts.

‘The sweepstakes [casinos] have none of the attributes frequently associated with McDonald’s-design sweepstakes promos,’ Wallach continued. ‘Besides running in perpetuity, the sweepstakes casinos offer” casino-like” payouts, generally 80 percent or more of profits, whereas the normal payment percentage for a momentary marketing sweepstakes is a minor share of the income made by the business [usually less than one percent]’

Wallach fasts to compare the online social sweeps gambling establishments to the web cafes that sprang up in Florida, providing customers the chance to play casino-style video games for real rewards. A lot of those brick-and-mortar facilities have because been shuttered over accusations of illegal sports betting.

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

Now, Wallach argues, social sweeps gambling establishments should face similar analysis.

‘These distinctions are not arbitrary,’ Wallach said of social sweeps casinos. ‘They have actually consistently been pointed out by courts and state chief law officer as essential aspects in identifying that a sweepstakes promo remained in reality a guise for illegal gambling.’

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

‘Consumers are being deprived of securities and states are giving up substantial tax and income opportunities as this gambling replaces that performed through regulated channels,’ read a well-circulated AGA memo.

And after that there are the complainants who have sued social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal expenses and continued lawsuits.

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

In the most recent claim, which is largely 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 described in the filing as an ‘unlawful gaming business. ‘

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

‘We generally don’t comment on matters before the courts,’ a VGW representative told DailyMail.com by means of email. ‘However, we note that this claim has only simply been submitted with the court and VGW has not been formally served.

‘We have full confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,’ the representative continued. ‘We continue to use our free-to-play games across the majority of The United States and Canada, as we have for more than a years, producing not just fantastic games, user experiences and entertainment, but also ensuring this is done securely, properly and at the greatest level of requirements.

‘More broadly, we ’d repeat that class actions and other lawsuits and arbitrations are reasonably typical across the online social games market (and the US more broadly), and our standard practice is that we intend to strongly safeguard any claim which may be brought against us.’

The concerns in between traditional online sports betting and sweepstakes gambling establishments could prove troublesome 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 prohibited sports betting wagering ‘sweeps’ websites while at the very same time the leagues wish to predict a strong position against illegal gambling - especially when trying to tamp down the periodic gaming scandal,’ Glaser told DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a lifetime ban from the NBA over accusations he conspired with gamblers. However, to be clear, Porter’s scandal is unassociated to anything including social or sweepstakes casinos.

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

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

‘I ’d anticipate that a league crackdown on athletes backing sweepstakes sites is a matter of when, not if,’ Glaser included.

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

Asked if their celebrity endorsers have a responsibility to describe to consumers 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 complete self-confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,’ the representative stated. ‘Some of our values are” our players come initially” 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 differently.

‘Celebrities who provide their names to dubious unlawful gambling sites are, at a minimum, putting their reputations at danger in addition to courting civil and class actions by customers who declare harm,’ Glaser said. ‘There is likewise some danger that state regulators and state chief law officers rope star endorsers into enforcement efforts for facilitating illegal gaming.’

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