The smiling faces of Paris Hilton and Ryan Seacrest made surprise looks before the Louisiana Senate for Friday's hearing on unlawful gambling.
No, they weren't personally in attendance, but the world-famous celebs were notably consisted of in a slide discussion on social and sweepstakes casinos - the questionable websites providing both complimentary casino-style video games and rewarding prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for 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 gaming corporations, not to discuss suit complainants and state regulators, sweepstakes casinos act as conventional casinos, just without the oversight, consumer defenses and tax laws. So not only can they prevent the steep 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulative hurdles like anti-money laundering and responsible-gaming protections.
One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces accusations of prohibited sports betting in a New York suit that claims VGW uses star endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's statement listed below)
'I'm unsure" if you don't trust us, you can rely on Paris Hilton" is a winning message for companies running multibillion-dollar illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.
Sweepstakes endorsers include a variety 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 use any distinctions in between traditional sports betting and sweepstakes play.
Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes casinos discovered online
Ryan Seacrest urges fans to play at Chumba Casino, where lots of - however not all - video games are free
Drake has an offer with social sweeps casino, Stake, that he frequently touts on social media
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Instead, ads generally focus around the social element of the casinos, while omitting the potential for actual gambling losses.
Others tempt customers with promises of prizes. One such operator, Stake, ran a social media advertisement revealing off Drake's automobiles, airplanes and mansions before rotating to video 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 explained: 'Because I never ever quit.'
The disparity in between gaming websites and social or sweepstakes casinos is a bit complex, however 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), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, the majority of the players on social-sweepstakes casinos are sports betting free.
'Most social sweeps clients never make a purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of consumers who make purchases do so in amounts far smaller sized than the normal deposit or wager size at real-money online gambling websites.'
Social gambling establishments provide customers a possibility to play casino-style games with good friends. Players have the option to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to unlock different functions within the games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing 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 complainants in Florida, Georgia, New Jersey and New York City. One player told the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to buy more coins in pursuit of money and other things of worth.
The Philadelphia 76ers' Paul George is seen promoting an International Poker event
Social sweeps casino Stake ran an ad revealing off Drake's cars, aircrafts and mansions
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 websites, which do not require usually need recognition. However, websites like Chumba will request IDs from players trying to withdraw any funds.
Many sites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for totally free sweeps coins, supplied the players follow painfully particular instructions. What's more, players are typically rewarded with sweeps coins just for signing up, thereby giving them a factor to try their hands at any variety of casino games for a chance to win - or lose - genuine money.
So why are sweepstakes sites permitted to run in 48 states, while online casinos are prohibited in all but 7?

According to the stakeholders, their product is the complimentary casino-style gaming, and the real-stakes competitors is simply a way of promoting their bread and butter.
'Social sweepstakes video games are just a type of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never ever have to spend for an opportunity to win prizes. That lack of a purchase requirement - or" consideration" - is a crucial distinction between social sweeps and traditional online sports betting websites like gambling establishments.'
Consider the manner in which McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and french fries that use them the opportunity to win profitable prizes, such as a $1 million jackpot.
And without a purchase requirement, or 'consideration', the game itself doesn't meet the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all kinds of daily businesses in the United States, everything from hamburgers to magazine subscriptions to coffee and home enhancement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are regularly used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry experts, 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 distinct start and end, thus recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote real products like fries, shakes, and the Filet-O-Fish.
'They do not last forever and they're generally not connected to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the attributes frequently connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos use" casino-like" payouts, generally 80 percent or more of profits, whereas the common payout percentage for a temporary marketing sweepstakes is an unimportant share of the profits made by the company [generally less than one percent]'
Wallach fasts to liken the online social sweeps gambling establishments to the web cafes that emerged in Florida, using customers the opportunity to play casino-style video games for real prizes. A lot of those brick-and-mortar establishments have actually because been shuttered over claims of unlawful gaming.
DJ Khaled is among several star spokespeople for VGW's Global Poker brand name
Now, Wallach argues, social sweeps casinos need to face comparable 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 crucial factors in identifying that a sweepstakes promotion was in fact a guise for illegal gambling.'
Among the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact brand-new legislation on the problem.
'Consumers are being denied of defenses and states are passing up substantial tax and income opportunities as this gambling changes that conducted through controlled channels,' read a well-circulated AGA memo.
And then there are the complainants who have actually taken legal action against social casinos in more than a lots states.
Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal costs and continued litigation.
Michael Phelps has signed a handle the VGW Group, which owns Global Poker
In the current suit, which is largely comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gambling business. '
Apple and Google have actually likewise been named as accuseds in suits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's ask for comment.
'We generally do not discuss matters before the courts,' a VGW representative informed DailyMail.com via e-mail. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has not been officially served.
'We have full self-confidence in our compliance with all laws and guidelines where we operate, and stay confident 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 decade, developing not just great video games, user experiences and home entertainment, but also guaranteeing this is done safely, responsibly and at the highest level of requirements.
'More broadly, we 'd restate that class actions and other litigations and arbitrations are fairly typical across the online social video games market (and the US more broadly), and our standard practice is that we plan to intensely defend any claim which may be brought versus us.'
The issues between traditional online sports betting and sweepstakes casinos might prove problematic for some celeb 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 unlawful sports betting wagering 'sweeps' sites while at the very same time the leagues want to forecast a strong position against unlawful gambling - specifically when attempting to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.
It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a life time ban from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes gambling establishments.
Along with VGW, Apple and Google are being demanded hosting supposedly prohibited gambling sites
Regardless, Glaser sees sweepstakes casinos as a major issue for leagues such as the NBA.
'I 'd anticipate that a league crackdown on athletes backing sweepstakes websites is a matter of when, not if,' Glaser included.
Neither an NBA spokesperson nor the players' agents responded to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to react to DailyMail.com emails.
Asked if their celebrity endorsers have a duty to explain to customers the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the spokesperson stated. 'A few of our values are" our gamers come initially" and" we do what's right", and we put our values at the core of whatever we do.'
Glaser, an outspoken opponent of sweepstakes sites, sees things in a different way.
'Celebrities who provide their names to shady prohibited sports betting sites are, at a minimum, putting their reputations at threat along with courting civil and class actions by customers who declare harm,' Glaser said. 'There is likewise some danger that state regulators and state attorneys basic rope celebrity endorsers into enforcement efforts for assisting in unlawful sports betting.'
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