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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 gambling.
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No, they weren’t personally in presence, however the world-famous stars were notably included in a slide presentation on social and sweepstakes casinos - the controversial websites using both complimentary casino-style games and rewarding rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can ‘bet totally free,’ 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 industry that now discovers itself besieged by suits. In the eyes of lots of video gaming corporations, not to mention lawsuit complainants and state regulators, sweepstakes gambling establishments act as standard casinos, only without the oversight, customer protections and tax laws. So not only can they avoid the steep 24-percent federal gaming levy, but sweepstakes operators aren’t based on regulatory difficulties 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 faces allegations of illegal gaming in a New york city lawsuit that declares VGW uses star endorsers to ‘create a veneer of authenticity’ around its product. (See VGW’s declaration below)

‘I’m not sure” if you don’t trust us, you can trust Paris Hilton” is a winning message for companies operating multibillion-dollar prohibited operations out of places like Malta, Isle of Man, or US mail drops,’ Friday’s speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebrities from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any differences between standard gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes casinos discovered online

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

Drake has a deal with social sweeps gambling establishment, Stake, that he routinely promotes on social media

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Instead, ads usually center around the social aspect of the gambling establishments, while leaving out the capacity for real sports betting losses.

Others tempt consumers with guarantees of rewards. One such operator, Stake, ran a social media advertisement displaying Drake’s vehicles, planes and mansions before pivoting to footage of the rap artist playing online casino-style video games.

‘Daddy, why do we have a lot cash?’ check out the very first caption on the screen.

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

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

A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the players on social-sweepstakes gambling establishments are playing for complimentary.

‘Most social sweeps customers never make a purchase,’ the SPGA spokesperson told DailyMail.com. ‘The minority of customers who make purchases do so in quantities far smaller sized than the common deposit or bet size at real-money online sports betting websites.’

Social gambling establishments use consumers a possibility to play casino-style video games with buddies. Players have the alternative to purchase valueless currency typically referred to as ‘gold coins,’ which can not be exchanged genuine money, but can be utilized to open various functions within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting customers to acquire other currency called ‘sweeps coins’ that can be exchanged for money or other rewards.

And therein lies the capacity for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer 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 worth.

The Philadelphia 76ers’ Paul George is seen promoting an International Poker occasion
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Social sweeps casino Stake ran an advertisement revealing off Drake’s cars and trucks, 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 but seven states, which has assisted to fuel the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which do not need typically require identification. However, websites like Chumba will request IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit consumers to send mail-in ask for complimentary sweeps coins, offered the gamers follow painfully particular guidelines. What’s more, players are frequently rewarded with sweeps coins just for signing up, thus providing a factor to try their hands at any number of casino games for an opportunity to win - or lose - real money.

So why are sweepstakes websites permitted to operate in 48 states, while online casinos are banned in all but 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 simply a form of online entertainment,’ an SPGA representative told DailyMail.com by email. ‘No purchase is required to play at social casinos with sweepstakes prizes. Consumers never ever need to spend for a chance to win rewards. That lack of a purchase requirement - or” consideration” - is an important difference between social sweeps and conventional online gambling websites like casinos.’

Consider the method that McDonald’s utilizes its yearly 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 possibility to win financially rewarding prizes, such as a $1 million prize.

And without a purchase requirement, or ‘factor to consider’, the video game itself doesn’t fulfill the meaning of sports betting in the US.

‘Sweepstakes are an enduring approach for promoting all sort of everyday organizations in the United States, everything from hamburgers to magazine subscriptions to coffee and home enhancement stores,’ the SPGA representative told DailyMail.com. ‘Sweepstakes promos are routinely used 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 insiders, that argument doesn’t cut it.

For beginners, video gaming attorney Daniel Wallach explains, McDonald’s Monopoly game does not run forever. Rather, it has a well-defined start and end, consequently recommending the sweepstakes is not the fast-food giant’s main product. Instead, the sweepstakes is being utilized to promote genuine items like french fries, shakes, and the Filet-O-Fish.

‘They don’t last forever and they’re generally not connected to casino-style video games of possibility,’ Wallach told DailyMail.com. ‘They’re simply cash free gifts.

‘The sweepstakes [casinos] have none of the attributes typically related to McDonald’s-style sweepstakes promotions,’ Wallach continued. ‘Besides running in eternity, the sweepstakes gambling establishments provide” casino-like” payments, generally 80 percent or more of profits, whereas the typical payment portion for a short-term advertising sweepstakes is an insignificant share of the earnings earned by the business [usually less than one percent]’

Wallach is fast to compare the online social sweeps gambling establishments to the internet cafes that emerged in Florida, offering customers the possibility to play casino-style games for genuine prizes. A lot of those brick-and-mortar facilities have considering that been shuttered over allegations of illegal gambling.

DJ Khaled is among a number of celebrity spokespeople for VGW’s Global Poker brand
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Now, Wallach argues, social sweeps gambling establishments need to deal with similar scrutiny.

‘These distinctions are not arbitrary,’ Wallach stated of social sweeps casinos. ‘They have actually repeatedly been cited by courts and state lawyer generals as crucial consider determining that a sweepstakes promo was in truth a guise for illegal gaming.’

Among the gambling establishment market’s leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in many cases, enact brand-new legislation on the issue.

‘Consumers are being denied of defenses and states are giving up significant tax and revenue chances as this sports betting changes that performed through regulated channels,’ read a well-circulated AGA memo.

And then there are the plaintiffs who have taken legal action against social casinos in more than a lots states.

Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, stating the settlement was made to prevent legal expenses and continued lawsuits.

Michael Phelps has actually signed a deal with the VGW Group, which owns Global Poker
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In the most recent lawsuit, which is mainly comparable to its predecessors, New york city state citizens Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an ‘prohibited sports betting business. ‘

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

‘We typically don’t comment on matters before the courts,’ a VGW representative told DailyMail.com by means of email. ‘However, we keep in mind that this claim has only just been filed with the court and VGW has not been formally served.

‘We have full self-confidence in our compliance with all laws and regulations where we run, and stay confident about the future,’ the representative continued. ‘We continue to use our free-to-play video games across the majority of North America, as we have for more than a years, developing not only terrific games, user experiences and entertainment, however also guaranteeing this is done safely, properly and at the highest level of standards.

‘More broadly, we ’d restate that class actions and other litigations 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 strongly safeguard any claim which may be brought versus us.’

The concerns in between standard online gambling and sweepstakes gambling establishments might prove bothersome 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 paradoxical that professional athletes are hawking illegal sports betting wagering ‘sweeps’ sites while at the same time the leagues want to predict a strong position versus illegal gambling - particularly when trying to tamp down the periodic gambling scandal,’ Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter got a life time restriction from the NBA over allegations he conspired with bettors. However, to be clear, Porter’s scandal is unrelated to anything including social or sweepstakes gambling establishments.

In addition to VGW, Apple and Google are being sued for hosting presumably websites

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

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

Neither an NBA spokesman nor the gamers’ representatives responded to DailyMail.com’s requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com emails.
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Asked if their celeb endorsers have a responsibility to discuss to customers the distinctions and resemblances between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.

‘We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,’ the spokesperson stated. ‘A few of our worths are” our gamers precede” and” we do what’s right”, and we put our worths at the core of everything we do.’

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

‘Celebrities who provide their names to shady unlawful gaming sites are, at a minimum, putting their track records at risk as well as courting civil and class actions by customers who allege harm,’ Glaser said. ‘There is also some threat that state regulators and state attorneys general rope star endorsers into enforcement efforts for assisting in unlawful gambling.’

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