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

No, they weren't personally in participation, but the world-famous stars were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites providing both complimentary casino-style video games and rewarding prizes, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for 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 2 cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of many gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes gambling establishments act as traditional casinos, only without the oversight, consumer protections and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, but sweepstakes operators aren't subject to regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company deals with allegations of prohibited sports betting in a New York suit that declares VGW uses star endorsers to 'produce a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm not sure" if you do not trust us, you can trust Paris Hilton" is a winning message for companies operating operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions in between traditional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes gambling establishments found online

Ryan Seacrest prompts fans to play at Chumba Casino, where numerous - however not all - games are free

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

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Instead, ads typically focus around the social element of the casinos, while leaving out the capacity for real gaming losses.

Others lure clients with promises of rewards. One such operator, Stake, ran a social media ad displaying Drake's automobiles, aircrafts and mansions before pivoting to footage of the rapper playing online casino-style video games.

'Daddy, why do we have a lot money?' read the first caption on the screen.

Another caption discussed: 'Because I never provided up.'

The discrepancy in between gambling sites and social or sweepstakes casinos is a bit intricate, however operators of the latter insist they're not included with the previous.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes gambling establishments are sports betting totally free.

'Most social sweeps customers never purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of customers 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 use customers an opportunity to play casino-style video games with good friends. Players have the alternative to purchase valueless currency often referred to as 'gold coins,' which can not be exchanged genuine money, however can be used to unlock different features within the 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 prizes.

And therein lies the potential for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. One player informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to buy more coins in pursuit of money and other things of value.

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

Social sweeps casino Stake ran an advertisement showing off Drake's automobiles, airplanes and estates

Karl-Anthony Towns of the New York 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 gambling establishments.

Anyone over the age of 18 can access the sweepstakes websites, which do not need normally need identification. However, websites like Chumba will request for IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit clients to send mail-in ask for complimentary sweeps coins, offered the gamers follow painfully particular guidelines. What's more, players are typically rewarded with sweeps coins just for registering, consequently providing them a reason to attempt their hands at any number of casino games for a possibility to win - or lose - real cash.

So why are sweepstakes websites enabled to operate in 48 states, while online casinos are banned in all however 7?

According to the stakeholders, their product is the totally free casino-style gaming, and the real-stakes competition is just a method of promoting their support.

'Social sweepstakes video games are just a kind of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never need to spend for an opportunity to win rewards. That absence of a purchase requirement - or" consideration" - is an important difference in between social sweeps and traditional online gambling sites like casinos.'

Consider the way that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that offer them the opportunity to win rewarding prizes, such as a $1 million prize.

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

'Sweepstakes are a long-standing technique for promoting all sort of everyday businesses in the United States, everything from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are regularly utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market experts, that argument does not cut it.

For starters, video gaming lawyer Daniel Wallach explains, McDonald's Monopoly game does not run forever. Rather, it has a well-defined beginning and end, thus recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real products 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 informed DailyMail.com. 'They're just money free gifts.

'The sweepstakes [gambling establishments] possess none of the qualities typically connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos offer" casino-like" payments, typically 80 percent or more of revenues, whereas the common payout portion for a temporary advertising sweepstakes is a minor share of the income earned by the business [usually less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, offering consumers the possibility to play casino-style video games for real rewards. A lot of those brick-and-mortar establishments have because been shuttered over accusations of unlawful gaming.

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

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

'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have consistently been pointed out by courts and state attorney general of the United States as key factors in figuring out that a sweepstakes promo was in truth a guise for unlawful sports betting.'

One of the casino industry's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in some cases, enact new legislation on the issue.

'Consumers are being deprived of defenses and states are passing up 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 plaintiffs who have taken legal action against social casinos in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, saying the settlement was made to prevent legal costs and continued litigation.

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

In the newest claim, which is mostly similar to its predecessors, New York state locals Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gambling business. '

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

'We typically do not talk about matters before the courts,' a VGW representative told DailyMail.com through e-mail. 'However, we keep in mind that this claim has only just been filed with the court and VGW has 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 spokesperson continued. 'We continue to provide our free-to-play video games throughout the majority of North America, as we have for more than a years, developing not just great video games, user experiences and entertainment, however likewise guaranteeing this is done safely, properly and at the highest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are relatively typical across the online social games market (and the US more broadly), and our basic practice is that we plan to intensely safeguard any claim which may be brought against us.'

The issues between standard online gambling and sweepstakes casinos could prove bothersome for some celebrity 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 traditional gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the very same time the leagues desire to forecast a strong position versus unlawful sports betting - specifically when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

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

Along with VGW, Apple and Google are being demanded hosting presumably illegal sports betting sites

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

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

Neither an NBA spokesman nor the gamers' agents responded to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to react to DailyMail.com emails.
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Asked if their celebrity endorsers have a responsibility to describe to consumers the differences and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the representative said. 'A few of our worths are" our players precede" and" we do what's right", and we put our values at the core of everything we do.'

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

'Celebrities who lend their names to dubious illegal gaming websites are, at a minimum, putting their credibilities at risk in addition to courting civil and class actions by consumers 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 facilitating unlawful gambling.'

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