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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 unlawful sports betting.
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No, they weren't personally in attendance, however the world-famous celebrities were conspicuously included in a slide presentation on social and sweepstakes gambling establishments - the controversial sites offering both complimentary casino-style games and lucrative prizes, such as money, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
The websites are simply two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of many gaming corporations, not to mention suit complainants and state regulators, sweepstakes gambling establishments serve as traditional casinos, just without the oversight, customer defenses and tax laws. So not only can they avoid the high 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulative difficulties like and responsible-gaming defenses.
One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company deals with accusations of prohibited gambling in a New York suit that claims VGW utilizes star endorsers to 'develop a veneer of legitimacy' 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 running multibillion-dollar unlawful operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.
Sweepstakes endorsers include a series of celebrities from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between traditional gaming and sweepstakes play.
Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes casinos discovered online
Ryan Seacrest urges fans to dip into Chumba Casino, where numerous - but not all - video games are totally free
Drake has a deal with social sweeps casino, Stake, that he routinely touts on social networks
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Instead, advertisements usually center around the social aspect of the casinos, while omitting the potential for real sports betting losses.
Others tempt consumers with pledges of prizes. One such operator, Stake, ran a social media ad revealing off Drake's cars, planes and estates before pivoting to footage of the rapper playing online casino-style games.
'Daddy, why do we have so much cash?' read the first caption on the screen.
Another caption explained: 'Because I never offered up.'
The discrepancy between gambling sites and social or sweepstakes casinos is a bit complex, however operators of the latter insist they're not included with the former.
A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), explained 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 casinos are playing for free.
'Most social sweeps consumers never ever make a purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of customers who make purchases do so in quantities far smaller than the normal deposit or wager size at real-money online sports betting sites.'
Social casinos use clients a possibility to play casino-style video games with good friends. Players have the choice to buy valueless currency often described as 'gold coins,' which can not be exchanged for genuine cash, however can be used to open numerous functions within the video games.
But within the world of social gambling establishments exists sweepstakes gaming, allowing customers to get other currency called 'sweeps coins' that can be exchanged for money or other prizes.
And therein lies the potential for financial losses, like the ones claimed 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 cash and other things of worth.
The Philadelphia 76ers' Paul George is seen promoting a Global Poker occasion
Social sweeps casino Stake ran an ad showing off Drake's cars, airplanes 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 banned in all however seven states, which has assisted to fuel the appeal of sweepstakes gambling establishments.
Anyone over the age of 18 can access the sweepstakes websites, which do not need typically 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 customers to submit mail-in ask for totally free sweeps coins, offered the players follow painfully specific instructions. What's more, gamers are typically rewarded with sweeps coins merely for signing up, therefore providing a reason to try their hands at any number of casino games for a possibility to win - or lose - genuine money.
So why are sweepstakes websites allowed to run in 48 states, while online gambling establishments are prohibited in all but 7?
According to the stakeholders, their item is the totally free casino-style gaming, and the real-stakes competition is just a way of promoting their bread and butter.
'Social sweepstakes video games are just a type of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed to play at social gambling establishments with sweepstakes prizes. Consumers never ever have to spend for a chance to win rewards. That absence of a purchase requirement - or" factor to consider" - is a crucial distinction in between social sweeps and standard online gambling sites like casinos.'
Think about the manner in which McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and fries that offer them the opportunity to win financially rewarding prizes, such as a $1 million jackpot.
And without a purchase requirement, or 'consideration', the game itself doesn't fulfill the definition of gambling in the US.
'Sweepstakes are an enduring approach for promoting all kinds of daily organizations in the United States, whatever from hamburgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are regularly used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'
But to many sports betting market insiders, that argument doesn't cut it.
For starters, video gaming attorney Daniel Wallach explains, McDonald's Monopoly video game does not run forever. Rather, it has a distinct start and end, therefore 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 do not last permanently and they're normally not connected to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're just cash giveaways.
'The sweepstakes [gambling establishments] possess none of the qualities commonly connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payments, generally 80 percent or more of profits, whereas the normal payout portion for a short-lived marketing sweepstakes is an unimportant share of the income made by the company [typically less than one percent]'
Wallach is fast to compare the online social sweeps casinos to the web coffee shops that emerged in Florida, providing customers the opportunity to play casino-style games for real prizes. Much of those brick-and-mortar facilities have actually given that been shuttered over allegations of illegal gambling.
DJ Khaled is amongst a number of star spokespeople for VGW's Global Poker brand name
Now, Wallach argues, social sweeps gambling establishments must deal with comparable examination.
'These distinctions are not arbitrary,' Wallach stated of social sweeps casinos. 'They have consistently been cited by courts and state attorney general of the United States as key consider identifying that a sweepstakes promotion remained in fact a guise for prohibited gambling.'
Among the gambling establishment market's leading trade organizations, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, in some cases, enact new legislation on the problem.
'Consumers are being deprived of defenses and states are passing up considerable tax and profits chances as this gaming replaces that conducted through managed channels,' checked out a well-circulated AGA memo.
And then there are the plaintiffs who have sued social gambling establishments in more than a lots states.
Sweepstakes gambling establishment operators paid a combined $14.2 million in four separate cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal costs and continued lawsuits.
Michael Phelps has signed a handle the VGW Group, which owns Global Poker
In the most recent lawsuit, which is mostly comparable 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 described in the filing as an 'illegal sports betting business. '
Apple and Google have actually likewise been called as defendants in claims for hosting the sweepstakes websites. But unlike VGW, neither tech company responded to DailyMail.com's demand for remark.
'We normally do not talk about matters before the courts,' a VGW representative told DailyMail.com by means of email. 'However, we note that this claim has only just been filed with the court and VGW has not been officially served.
'We have full confidence in our compliance with all laws and regulations where we operate, and remain positive about the future,' the representative 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 just terrific video games, user experiences and entertainment, however also ensuring this is done securely, responsibly and at the highest level of requirements.
'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are fairly common throughout the online social video games market (and the US more broadly), and our standard practice is that we plan to intensely safeguard any claim which may be brought against us.'
The issues in between standard online gaming and sweepstakes gambling establishments might show problematic 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 'sweeps' sites while at the exact same time the leagues wish to predict a strong position against unlawful gambling - especially when trying to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.
It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime restriction from the NBA over accusations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.
In addition to VGW, Apple and Google are being demanded hosting apparently prohibited gambling websites
Regardless, Glaser sees sweepstakes gambling establishments as a significant problem 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 spokesman nor the gamers' agents responded to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com e-mails.
Asked if their celebrity endorsers have a duty to explain to consumers the differences and similarities in between iGaming and sweepstakes casinos, VGW insisted there is nothing more that needs to be done.
'We have full confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative said. '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 everything we do.'
Glaser, an outspoken challenger of sweepstakes sites, sees things differently.
'Celebrities who provide their names to dubious illegal gambling sites are, at a minimum, putting their credibilities at threat as well as courting civil and class actions by customers who allege damage,' Glaser said. 'There is also some danger that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for helping with unlawful gaming.'
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Sweepstakes Casino Controversy - And Celebrities' All-important Role
jeseniaking736 edited this page 2025-01-02 11:23:50 +01:00