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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 participation, but the world-famous celebrities were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the controversial sites offering both complimentary casino-style video games and financially rewarding rewards, such as money, gift cards or cryptocurrency. In one ad, 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.
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The websites are simply 2 cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of lots of gaming corporations, not to point out lawsuit complainants and state regulators, sweepstakes casinos function as traditional casinos, only without the oversight, consumer defenses and tax laws. So not just can they avoid the high 24-percent federal gambling levy, but sweepstakes operators aren’t based on regulative obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits in 2015 alone. Now the business deals with allegations of illegal sports betting in a New york city claim that declares VGW uses star endorsers to ‘develop a veneer of legitimacy’ around its product. (See VGW’s statement listed 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 prohibited 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 variety of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions in between conventional gaming and sweepstakes play.

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

Ryan Seacrest advises fans to play at Chumba Casino, where lots of - however not all - video games are complimentary

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

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

Others tempt consumers with guarantees of rewards. One such operator, Stake, ran a social networks advertisement flaunting Drake’s vehicles, planes and estates before rotating to video of the rap artist playing online casino-style video games.

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

Another caption discussed: ‘Because I never ever quit.’

The inconsistency in between gambling sites and social or sweepstakes gambling establishments is a bit complicated, but operators of the latter insist they’re not involved with the previous.

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

‘Most social sweeps customers never ever buy,’ the SPGA spokesperson informed DailyMail.com. ‘The minority of consumers who make purchases do so in amounts far smaller sized than the typical deposit or wager size at real-money online gambling sites.’

Social casinos offer consumers a possibility to play casino-style games with buddies. Players have the option to purchase valueless currency frequently referred to as ‘gold coins,’ which can not be exchanged for real cash, but can be utilized to unlock various functions within the video games.

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

And therein lies the potential for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. 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 money and other things of value.

The Philadelphia 76ers’ Paul George is seen promoting an International Poker event

Social sweeps casino Stake ran an advertisement flaunting Drake’s automobiles, planes and mansions

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

Traditional online gambling establishments are banned in all however seven states, which has assisted to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in ask for totally free sweeps coins, provided the players follow painfully particular guidelines. What’s more, players are often rewarded with sweeps coins just for registering, thereby giving them a reason to attempt their hands at any number of gambling establishment games for an opportunity to win - or lose - real cash.

So why are sweepstakes websites allowed to run in 48 states, while online casinos are prohibited in all however 7?

According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competition is just a way of promoting their bread and butter.

‘Social sweepstakes video games are merely a type of online home entertainment,’ an SPGA spokesperson told DailyMail.com by e-mail. ‘No purchase is needed to play at social gambling establishments with sweepstakes prizes. Consumers never have to pay for a chance to win rewards. That absence of a purchase requirement - or” consideration” - is a crucial difference between social sweeps and standard online gaming sites like gambling establishments.’

Think of the way that McDonald’s utilizes its annual Monopoly video game to promote its food: Customers aren’t paying to bet, but rather they’re purchasing hamburgers and fries that provide them the chance to win profitable rewards, such as a $1 million prize.

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

‘Sweepstakes are a long-standing technique for promoting all kinds of daily businesses in the United States, everything from hamburgers to magazine subscriptions to coffee and home improvement stores,’ the SPGA spokesperson informed DailyMail.com. ‘Sweepstakes promotions are frequently utilized by a who’s who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.’

But to lots of sports betting market experts, that argument doesn’t cut it.

For beginners, video gaming attorney Daniel Wallach mentions, McDonald’s Monopoly video game doesn’t run forever. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant’s main item. Instead, the sweepstakes is being used to promote real items like french fries, shakes, and the Filet-O-Fish.

‘They don’t last permanently and they’re normally not tied to casino-style games of possibility,’ Wallach told DailyMail.com. ‘They’re simply money free gifts.

‘The sweepstakes [casinos] possess none of the characteristics typically connected with McDonald’s-design sweepstakes promos,’ Wallach continued. ‘Besides running in perpetuity, the sweepstakes gambling establishments use” casino-like” payouts, typically 80 percent or more of incomes, whereas the common payout portion for a short-term advertising sweepstakes is a trivial share of the income made by the company [generally less than one percent]’

Wallach fasts to compare the online social sweeps casinos to the internet cafes that sprang up in Florida, providing customers the chance to play casino-style video games for genuine prizes. Much of those brick-and-mortar establishments have since been shuttered over allegations of illegal sports betting.

DJ Khaled is among several celeb spokespeople for VGW’s Global Poker brand

Now, Wallach argues, social sweeps casinos ought to face similar examination.
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‘These distinctions are not approximate,’ Wallach stated of social sweeps gambling establishments. ‘They have actually consistently been pointed out by courts and state chief law officer as key elements in determining that a sweepstakes promo remained in reality a guise for unlawful gambling.’

One of the gambling establishment market’s leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in some cases, enact new legislation on the concern.

‘Consumers are being deprived of protections and states are passing up significant tax and earnings opportunities as this sports betting replaces that conducted through controlled channels,’ checked out a well-circulated AGA memo.

And then there are the plaintiffs who have taken legal action against social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 different cases in Kentucky without admitting any wrongdoing, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal expenses and continued litigation.
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Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the current lawsuit, which is mostly comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an ‘unlawful gambling enterprise. ‘

Apple and Google have likewise been called as defendants 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 comment on matters before the courts,’ a VGW spokesperson told DailyMail.com by means of e-mail. ‘However, we note that this claim has actually only just been submitted with the court and VGW has actually not been formally served.

‘We have complete self-confidence in our with all laws and policies where we run, and remain positive about the future,’ the representative continued. ‘We continue to use our free-to-play games throughout many of North America, as we have for more than a years, developing not only excellent video games, user experiences and entertainment, however likewise ensuring this is done securely, properly and at the greatest level of requirements.

‘More broadly, we ’d restate that class actions and other litigations and arbitrations are fairly typical throughout the online social video games industry (and the US more broadly), and our basic practice is that we plan to strongly protect any claim which might be brought against us.’

The issues between conventional online gaming and sweepstakes gambling establishments could prove bothersome for some celeb endorsers.

Towns, a star center with the Knicks, and the 76ers’ George both endorse VGW’s Global Poker brand name while the NBA is partnered with standard video gaming titans like FanDuel and DraftKings.

‘It’s ironic that expert athletes are hawking unlawful sports betting wagering ‘sweeps’ websites while at the very same time the leagues want to project a strong stance versus prohibited gaming - particularly when attempting to tamp down the periodic gaming scandal,’ Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a life time ban 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.

Along with VGW, Apple and Google are being taken legal action against for hosting apparently unlawful gambling sites

Regardless, Glaser sees sweepstakes casinos as a major issue for leagues such as the NBA.

‘I ’d expect that a league crackdown on professional athletes endorsing sweepstakes sites is a matter of when, not if,’ Glaser included.

Neither an NBA spokesperson nor the gamers’ representatives responded to DailyMail.com’s demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to react to DailyMail.com emails.

Asked if their celebrity endorsers have an obligation to discuss to consumers the distinctions and similarities between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

‘We have full confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,’ the representative stated. ‘A few of our worths 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 opponent of sweepstakes websites, sees things differently.

‘Celebrities who lend their names to dubious illegal gambling sites are, at a minimum, putting their credibilities at risk in addition to courting civil and class actions by consumers who declare damage,’ Glaser stated. ‘There is likewise some danger that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for assisting in prohibited gambling.’

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