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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 prohibited gaming.

No, they weren't personally in attendance, however the world-famous celebrities were notably included in a slide presentation on social and sweepstakes casinos - the questionable websites using both totally free casino-style 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 free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just two cogs in the multibillion-dollar market that now discovers itself besieged by suits. In the eyes of lots of video gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes casinos serve as standard casinos, just without the oversight, consumer defenses and tax laws. So not only can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the company faces accusations of illegal gambling in a New york city lawsuit that declares VGW uses celeb endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm unsure" if you don't trust us, you can trust Paris Hilton" is a winning message for business running multibillion-dollar prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a series of celebrities 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 in between traditional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to dip into Chumba Casino, where numerous - however not all - video games are free

Drake has an offer with social sweeps gambling establishment, Stake, that he frequently promotes on social networks

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Instead, advertisements usually center around the social element of the casinos, while omitting the capacity for real gaming losses.

Others lure clients with promises of prizes. One such operator, Stake, ran a social networks ad revealing off Drake's cars and trucks, airplanes and mansions before rotating to video of the rap artist playing online casino-style games.

'Daddy, why do we have so much cash?' check out the first caption on the screen.

Another caption described: 'Because I never quit.'

The disparity between gambling sites and social or sweepstakes casinos is a bit complex, but operators of the latter insist they're not included with the former.

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.

'Most social sweeps consumers never ever purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller than the normal deposit or wager size at real-money online sports betting websites.'

Social casinos use customers a possibility to play casino-style games with buddies. Players have the option to purchase valueless frequently referred to as 'gold coins,' which can not be exchanged for real cash, but can be utilized to open numerous features within the games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to acquire other currency called 'sweeps coins' that can be exchanged for cash or other rewards.

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 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 money 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 cars and trucks, airplanes and estates

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

Traditional online casinos are banned in all however 7 states, which has helped to sustain the popularity of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, enable clients to send mail-in ask for totally free sweeps coins, provided the players follow painfully specific guidelines. What's more, players are typically rewarded with sweeps coins just for signing up, thus providing them a reason to attempt their hands at any variety of casino video games for a chance to win - or lose - real cash.

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

According to the stakeholders, their product is the free casino-style gaming, and the real-stakes competitors is merely a way of promoting their bread and butter.
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'Social sweepstakes games are merely a form of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never have to spend for an opportunity to win rewards. That absence of a purchase requirement - or" consideration" - is an essential difference between social sweeps and standard online gambling sites like gambling establishments.'

Think about the method that McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that use them the opportunity to win profitable rewards, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing method for promoting all sort of everyday businesses in the United States, everything from burgers to publication subscriptions to coffee and home improvement shops,' the SPGA representative 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 lots of gambling industry insiders, that argument doesn't cut it.

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

'They do not last permanently and they're generally not connected to casino-style games of opportunity,' Wallach informed DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [casinos] have none of the qualities commonly connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, normally 80 percent or more of revenues, whereas the normal payout percentage for a temporary advertising sweepstakes is a minor share of the revenue made by the business [normally less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the web coffee shops that sprang up in Florida, providing consumers the chance to play casino-style video games for real prizes. A number of those brick-and-mortar facilities have given that been shuttered over accusations of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos ought to face similar scrutiny.

'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have consistently been pointed out by courts and state chief law officer as key factors in identifying that a sweepstakes promotion was in truth a guise for unlawful gambling.'

Among the casino market's leading trade companies, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, sometimes, enact brand-new legislation on the issue.

'Consumers are being denied of protections and states are passing up significant tax and income chances as this sports betting changes that carried out through regulated channels,' checked out a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action lawsuit, stating 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 suit, which is largely similar to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful sports betting enterprise. '

Apple and Google have also been named as defendants in suits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for remark.

'We generally do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com by means of e-mail. 'However, we keep in mind that this claim has actually only simply been submitted with the court and VGW has not been formally served.

'We have full self-confidence in our compliance with all laws and guidelines where we run, and stay positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout most of The United States and Canada, as we have for more than a years, developing not only great video games, user experiences and home entertainment, but likewise ensuring this is done safely, properly and at the highest level of requirements.
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'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly typical throughout the online social games market (and the US more broadly), and our standard practice is that we plan to vigorously safeguard any claim which may be brought against us.'

The concerns between conventional online gambling and sweepstakes gambling establishments could prove 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 conventional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the very same time the leagues wish to project a strong position versus illegal gaming - specifically when attempting to tamp down the occasional gambling scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a life time restriction from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes gambling establishments.
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In addition to VGW, Apple and Google are being sued for hosting presumably 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 backing sweepstakes sites is a matter of when, not if,' Glaser added.

Neither an NBA spokesman nor the gamers' agents responded to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to react to DailyMail.com emails.

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

'We have full confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the spokesperson stated. 'Some 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.'
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Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.

'Celebrities who lend their names to dubious unlawful gambling sites are, at a minimum, putting their reputations at threat as well as courting civil and class actions by consumers who declare damage,' Glaser said. 'There is also some risk that state regulators and state chief law officers rope star endorsers into enforcement efforts for facilitating prohibited sports betting.'

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