GitLab

The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on illegal sports betting.
bet9ja.com
No, they weren't personally in attendance, however the world-famous celebs were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the controversial sites using both complimentary casino-style video games and profitable rewards, such as money, present cards or cryptocurrency. In one advertisement, 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.
bet9ja.com
The sites are simply two 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 gambling establishments function as conventional casinos, just without the oversight, customer protections and tax laws. So not only can they avoid the high 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company faces accusations of prohibited gambling in a New york city lawsuit that declares VGW utilizes star endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's statement below)

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

Sweepstakes endorsers consist of a range of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences between traditional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes gambling establishments found online

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

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

Read More

Donald Trump 'set to name NBA group owner as US ambassador to Italy'

Instead, ads typically focus around the social element of the gambling establishments, while omitting the capacity for real sports betting losses.

Others lure clients with guarantees of prizes. One such operator, Stake, ran a social media advertisement displaying Drake's cars, airplanes and estates before pivoting to footage of the rapper playing online casino-style games.

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

Another caption explained: 'Because I never ever offered up.'

The disparity between gaming websites and social or sweepstakes gambling establishments is a bit complicated, however operators of the latter insist they're not involved with the previous.

A spokesperson for an industry 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, many of the gamers on social-sweepstakes gambling establishments are playing for totally free.

'Most social sweeps consumers never buy,' the SPGA representative told DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller than the typical deposit or bet size at real-money online sports betting sites.'

Social gambling establishments provide consumers an opportunity to play casino-style video games with friends. Players have the option to buy worthless currency frequently referred to as 'gold coins,' which can not be exchanged for genuine money, but can be utilized to unlock numerous functions within the games.

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

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer told the Washington Post he lost more than $100,000 on sweepstakes casinos 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 Worldwide Poker occasion

Social sweeps gambling establishment Stake ran an ad flaunting Drake's vehicles, planes and mansions

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

Traditional online casinos are banned in all however 7 states, which has assisted to fuel the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not need normally require identification. However, sites like Chumba will ask for IDs from players attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in ask for complimentary sweeps coins, supplied the players follow painfully particular guidelines. What's more, players are often rewarded with sweeps coins just for registering, therefore offering them a reason to try their hands at any number of casino games for an opportunity to win - or lose - real cash.

So why are sweepstakes sites enabled to run in 48 states, while online casinos are banned in all however 7?

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

'Social sweepstakes games are simply a form of online home entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes rewards. Consumers never need to pay for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is a vital distinction between social sweeps and conventional online sports betting sites like gambling establishments.'

Think of the manner in which McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that use them the chance to win lucrative rewards, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the game itself doesn't meet the meaning of gaming in the US.

'Sweepstakes are an enduring technique for promoting all kinds of everyday organizations in the United States, whatever from burgers to magazine memberships to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined beginning and end, thus suggesting the sweepstakes is not the fast-food giant's primary 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 normally not connected to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] possess none of the characteristics typically connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments provide" casino-like" payments, usually 80 percent or more of revenues, whereas the typical payment portion for a momentary advertising sweepstakes is an unimportant share of the revenue made by the company [normally less than one percent]'

Wallach is quick to liken the online social sweeps casinos to the web cafes that emerged in Florida, providing customers the chance to play casino-style games for real rewards. A number of those brick-and-mortar facilities have actually since been shuttered over accusations of illegal gaming.

DJ Khaled is among a number of celebrity spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps gambling establishments should face comparable scrutiny.

'These differences are not arbitrary,' Wallach stated of social sweeps casinos. 'They have actually consistently been mentioned by courts and state chief law officer as key elements in figuring out that a sweepstakes promotion remained in fact a guise for unlawful gambling.'

Among the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in many cases, enact brand-new legislation on the concern.

'Consumers are being denied of protections and states are giving up considerable tax and profits opportunities as this gaming changes that conducted through managed channels,' read 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 gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, saying the settlement was made to avoid legal costs and continued lawsuits.

Michael Phelps has signed an offer with the VGW Group, which owns Global Poker

In the most recent lawsuit, which is largely comparable to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal sports betting enterprise. '

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

'We usually don't talk about matters before the courts,' a VGW representative informed DailyMail.com via email. 'However, we note that this claim has only simply been filed with the court and VGW has not been formally served.

'We have full confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout many of North America, as we have for more than a decade, developing not only games, user experiences and entertainment, but also guaranteeing this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are relatively common across 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 against us.'

The issues between standard 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 name while the NBA is partnered with traditional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the very same time the leagues want to forecast a strong stance against prohibited gambling - especially when trying to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a life time restriction from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes gambling establishments.

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

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

'I 'd anticipate that a league crackdown on athletes endorsing sweepstakes sites refers when, not if,' Glaser included.

Neither an NBA spokesperson nor the players' representatives responded to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to react to DailyMail.com e-mails.

Asked if their celeb endorsers have a responsibility to discuss to customers the distinctions and similarities between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the spokesperson stated. 'Some of our values are" our gamers come first" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes sites, sees things in a different way.
bit.ly
'Celebrities who provide their names to shady illegal gambling websites are, at a minimum, putting their credibilities at threat along with courting civil and class actions by customers who allege harm,' Glaser said. 'There is likewise some danger that state regulators and state attorneys general rope celeb endorsers into enforcement efforts for helping with unlawful gambling.'

New YorkNBADrakeParis Hilton