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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 unlawful gaming.
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No, they weren't personally in presence, however the world-famous celebs were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the questionable sites providing both complimentary casino-style games and profitable rewards, such as money, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just 2 cogs in the multibillion-dollar industry that now finds itself besieged by lawsuits. In the eyes of many video gaming corporations, not to mention lawsuit plaintiffs and state regulators, sweepstakes casinos serve as standard gambling establishments, only without the oversight, consumer protections and tax laws. So not just can they prevent the steep 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual (VGW), reported $4 billion in earnings last year alone. Now the company deals with allegations of prohibited gambling in a New york city suit that declares VGW uses celebrity endorsers to 'create a veneer of authenticity' around its product. (See VGW's statement listed below)

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

Sweepstakes endorsers consist of a series of celebs from gambling lovers 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 conventional gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among many sweepstakes gambling establishments discovered online

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

Drake has a handle social sweeps gambling establishment, Stake, that he routinely touts on social media

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Instead, ads normally center around the social aspect of the gambling establishments, while omitting the potential for real gambling losses.

Others tempt consumers with promises of rewards. One such operator, Stake, ran a social networks ad displaying Drake's cars and trucks, airplanes and estates before rotating to footage of the rapper playing online casino-style games.

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

Another caption described: 'Because I never ever quit.'

The inconsistency between gaming websites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not involved with the former.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the gamers on social-sweepstakes gambling establishments are playing for complimentary.

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

Social gambling establishments provide clients an opportunity to play casino-style video games with buddies. Players have the alternative to purchase valueless currency typically described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to unlock different functions within the video games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to get other currency called 'sweeps coins' that can be exchanged for money 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. One gamer 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 worth.

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

Social sweeps gambling establishment Stake ran an ad displaying Drake's vehicles, airplanes 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 banned in all but seven states, which has helped to sustain the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for free sweeps coins, supplied the gamers follow painfully specific guidelines. What's more, gamers are often rewarded with sweeps coins just for registering, therefore providing them a factor to try their hands at any variety of gambling establishment video games for a possibility to win - or lose - real money.

So why are sweepstakes sites permitted to operate in 48 states, while online casinos are banned 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 bread and butter.

'Social sweepstakes games are simply a form of online home entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never ever need to pay for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is a vital distinction in between social sweeps and traditional online sports betting sites like gambling establishments.'

Consider the way that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that offer them the chance to win lucrative prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the game itself does not satisfy the meaning of gambling in the US.

'Sweepstakes are a long-standing method for promoting all sort of daily organizations in the United States, everything from hamburgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

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

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

'The sweepstakes [casinos] have none of the qualities commonly related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos offer" casino-like" payments, usually 80 percent or more of incomes, whereas the typical payout percentage for a short-term promotional sweepstakes is an insignificant share of the revenue made by the business [normally less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the internet cafes that emerged in Florida, using customers the chance to play casino-style games for genuine rewards. A lot of those brick-and-mortar facilities have considering that been shuttered over claims of illegal gambling.

DJ Khaled is among several star spokespeople for VGW's Global Poker brand name

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

'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have actually repeatedly been cited by courts and state attorney general of the United States as crucial elements in determining that a sweepstakes promo remained in fact a guise for unlawful sports betting.'

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

'Consumers are being denied of securities and states are forgoing substantial tax and earnings chances as this sports betting replaces that performed through regulated channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have actually taken legal action against 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 wrongdoing, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal costs and continued lawsuits.

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

In the most recent lawsuit, which is mostly comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited sports betting business. '

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

'We typically do not comment on matters before the courts,' a VGW representative informed DailyMail.com through email. 'However, we note that this claim has only simply been submitted with the court and VGW has not been formally served.

'We have complete self-confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the representative continued. 'We continue to provide our free-to-play games across the majority of The United States and Canada, as we have for more than a years, creating not just fantastic games, user experiences and entertainment, however also guaranteeing this is done securely, responsibly and at the highest level of requirements.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly common throughout the online social games industry (and the US more broadly), and our basic practice is that we mean to vigorously safeguard any claim which may be brought versus us.'

The problems between traditional online gambling and sweepstakes casinos could show troublesome for some celeb endorsers.

Towns, a star center with the Knicks, and the 76ers' George both back VGW's Global Poker brand while the NBA is partnered with traditional gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking prohibited sports betting 'sweeps' sites while at the same time the leagues wish to project a strong stance versus unlawful gaming - particularly when attempting to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter got a lifetime restriction from the NBA over allegations he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes casinos.

Along with VGW, Apple and Google are being demanded hosting presumably unlawful gambling websites

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

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

Neither an NBA spokesperson nor the gamers' agents reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com emails.

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

'We have full confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative stated. 'Some of our values are" our gamers come initially" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.
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'Celebrities who provide their names to shady unlawful gaming websites are, at a minimum, putting their credibilities at danger along with courting civil and class actions by consumers who allege damage,' Glaser stated. 'There is also some threat that state regulators and state attorneys basic rope star endorsers into enforcement efforts for assisting in unlawful sports betting.'

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