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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 illegal gambling.

No, they weren't personally in participation, but the world-famous celebs were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the controversial sites providing both complimentary casino-style video games and profitable rewards, 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 sites are just two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of numerous video gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes casinos function as conventional casinos, just without the oversight, customer protections and tax laws. So not just can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulatory obstacles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces allegations of illegal gaming in a New york city suit that claims VGW uses celeb endorsers to 'produce a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm not exactly sure" if you do not trust us, you can trust 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 presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebs from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions between conventional gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments found online
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Ryan Seacrest advises fans to dip into Chumba Casino, where many - but not all - games are free

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

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Instead, advertisements usually focus around the social element of the gambling establishments, while leaving out the capacity for actual gaming losses.

Others tempt clients with pledges of prizes. One such operator, Stake, ran a social media advertisement displaying Drake's cars and trucks, planes and estates before rotating to video footage of the rapper playing online casino-style video games.

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

Another caption described: 'Because I never quit.'

The inconsistency in between gaming sites and social or sweepstakes casinos is a bit complex, however operators of the latter insist they're not involved with the previous.

A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), described 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 playing for totally free.

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

Social casinos provide clients an opportunity to play casino-style video games with buddies. Players have the choice to buy valueless currency frequently referred to as 'gold coins,' which can not be exchanged genuine money, however can be utilized to unlock numerous functions within the games.

But within the world of social casinos exists sweepstakes video gaming, permitting customers to acquire other currency referred to as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for monetary losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York City. One player informed 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 an International Poker event

Social sweeps casino Stake ran an ad revealing off Drake's cars and trucks, airplanes and mansions

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

Traditional online casinos are prohibited in all but 7 states, which has assisted to sustain the appeal of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, enable customers to send mail-in ask for complimentary sweeps coins, supplied the gamers follow painfully particular guidelines. What's more, gamers are typically rewarded with sweeps coins merely for signing up, thus providing them a factor to try their hands at any number of casino games for a possibility to win - or lose - genuine money.

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

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

'Social sweepstakes games are simply a form of online home entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never need to pay for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an important distinction in between social sweeps and standard online gaming websites like gambling establishments.'

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

And without a purchase requirement, or 'factor to consider', the video game itself does not meet the definition of gaming in the US.

'Sweepstakes are an enduring method for promoting all sort of everyday organizations in the United States, whatever from burgers to publication memberships to coffee and home improvement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely 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 doesn't cut it.

For starters, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly video game doesn't run forever. Rather, it has a well-defined beginning and end, thus recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine products like fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [gambling establishments] have none of the attributes commonly associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payouts, generally 80 percent or more of profits, whereas the normal payout percentage for a momentary promotional sweepstakes is an unimportant share of the earnings made by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the web coffee shops that sprang up in Florida, using consumers the opportunity to play casino-style video games for real rewards. Many of those brick-and-mortar facilities have because been shuttered over claims of .

DJ Khaled is amongst a number of celebrity spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps casinos should deal with similar analysis.

'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been pointed out by courts and state chief law officer as crucial consider figuring out that a sweepstakes promo remained in fact 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, sometimes, enact new legislation on the issue.

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

And after that there are the complainants who have actually taken legal action against social gambling establishments in more than a lots states.

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

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

In the most recent suit, which is mainly comparable to its predecessors, New York state locals 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 enterprise. '

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

'We usually don't talk about matters before the courts,' a VGW representative told DailyMail.com through email. 'However, we keep in mind that this claim has actually only simply been filed with the court and VGW has actually not been formally served.

'We have complete self-confidence in our compliance with all laws and policies where we operate, and remain confident about the future,' the representative continued. 'We continue to offer our free-to-play games throughout the majority of North America, as we have for more than a years, creating not only excellent video games, user experiences and entertainment, however likewise guaranteeing this is done securely, properly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly typical across the online social games industry (and the US more broadly), and our standard practice is that we plan to vigorously defend any claim which might be brought against us.'

The issues in between traditional online gaming and sweepstakes casinos might prove bothersome for some star 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 conventional gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting 'sweeps' sites while at the same time the leagues want to project a strong position versus unlawful gaming - particularly 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 received a life time ban from the NBA over claims he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes gambling establishments.

Together with VGW, Apple and Google are being demanded hosting supposedly unlawful sports betting sites

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

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

Neither an NBA spokesperson nor the gamers' representatives reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also disregarded to react to DailyMail.com emails.

Asked if their star endorsers have a duty to describe to consumers the differences and resemblances in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the representative stated. 'A few of our values 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.
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'Celebrities who provide their names to dubious prohibited gaming websites are, at a minimum, putting their credibilities at danger in addition to courting civil and class actions by customers who allege harm,' Glaser stated. 'There is likewise some threat that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating prohibited gambling.'

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