The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on illegal gaming.
No, they weren't personally in presence, however the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites providing both free casino-style video games and profitable prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
The sites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of many video gaming corporations, not to point out suit complainants and state regulators, sweepstakes gambling establishments serve as traditional casinos, only without the oversight, consumer protections and tax laws. So not just can they avoid the steep 24-percent federal gaming levy, but sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming protections.
One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings in 2015 alone. Now the business deals with of illegal gaming in a New york city claim that declares VGW utilizes celeb endorsers to 'develop a veneer of authenticity' around its product. (See VGW's statement below)
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'I'm unsure" if you do not 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 video gaming corporation Light & Wonder, informed DailyMail.com.
Sweepstakes endorsers consist of a series 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 provide any distinctions in between standard sports betting and sweepstakes play.
Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes gambling establishments found online
Ryan Seacrest urges fans to dip into Chumba Casino, where lots of - but not all - games are free
Drake has a handle social sweeps gambling establishment, Stake, that he frequently touts on social networks
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Instead, ads generally focus around the social element of the casinos, while leaving out the potential for real gaming losses.
Others tempt customers with promises of prizes. One such operator, Stake, ran a social networks advertisement revealing off Drake's cars and trucks, airplanes and estates before rotating to video footage of the rap artist playing online casino-style games.
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'Daddy, why do we have a lot money?' read the very first caption on the screen.
Another caption explained: 'Because I never provided up.'
The discrepancy between gaming websites and social or sweepstakes casinos is a bit complex, but operators of the latter insist they're not included with the previous.
A representative for an industry 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 data, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.
'Most social sweeps clients never make a purchase,' the SPGA spokesperson informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller than the common deposit or wager size at real-money online sports betting websites.'
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Social casinos provide consumers an opportunity to play casino-style video games with pals. Players have the choice to purchase valueless currency often referred to as 'gold coins,' which can not be exchanged for genuine money, but can be used to unlock various functions within the games.
But within the world of social gambling establishments exists sweepstakes gaming, allowing consumers to acquire other currency called 'sweeps coins' that can be exchanged for money or other rewards.
And therein lies the potential for monetary losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York. One player informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous year after continuing to buy more coins in pursuit of cash and other things of value.
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The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion
Social sweeps gambling establishment Stake ran an advertisement displaying 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 casinos are prohibited in all but 7 states, which has actually assisted to fuel the popularity of sweepstakes gambling establishments.
Anyone over the age of 18 can access the sweepstakes websites, which don't require normally require recognition. However, sites like Chumba will request IDs from players trying to withdraw any funds.
Many sites, like the crypto-compatible Stake, allow clients to submit mail-in ask for totally free sweeps coins, supplied the gamers follow painfully particular directions. What's more, players are frequently rewarded with sweeps coins merely for signing up, thereby providing a reason to try their hands at any number of gambling establishment video games for an opportunity to win - or lose - genuine cash.
So why are sweepstakes sites enabled to run in 48 states, while online gambling establishments are banned in all but 7?
According to the stakeholders, their item is the complimentary casino-style gaming, and the real-stakes competitors is simply a method of promoting their support.
'Social sweepstakes video games are merely a type of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments 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 difference between social sweeps and standard online sports betting websites like casinos.'
Think of the way that McDonald's utilizes its annual Monopoly 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 profitable prizes, such as a $1 million jackpot.
And without a purchase requirement, or 'consideration', the video game itself does not fulfill the meaning of gambling in the US.
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'Sweepstakes are a long-standing method for promoting all sort of daily organizations in the United States, whatever from burgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'
But to lots of gambling industry experts, that argument doesn't cut it.
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For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct beginning and end, thus recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being used to promote real products like fries, shakes, and the Filet-O-Fish.
'They do not last forever and they're usually not connected to casino-style games of possibility,' Wallach informed DailyMail.com. 'They're just money free gifts.
'The sweepstakes [casinos] possess none of the characteristics frequently associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payments, typically 80 percent or more of revenues, whereas the typical payout percentage for a momentary marketing sweepstakes is an insignificant share of the revenue earned by the company [usually less than one percent]'
Wallach fasts to liken the online social sweeps casinos to the internet coffee shops that emerged in Florida, providing consumers the possibility to play casino-style video games for genuine rewards. A number of those brick-and-mortar establishments have considering that been shuttered over allegations of unlawful gambling.
DJ Khaled is among numerous star spokespeople for VGW's Global Poker brand
Now, Wallach argues, social sweeps gambling establishments need to face similar analysis.
'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have consistently been cited by courts and state attorney generals as crucial consider determining that a sweepstakes promo was in truth a guise for unlawful sports betting.'
Among the casino industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in many cases, enact new legislation on the issue.
'Consumers are being denied of defenses and states are giving up substantial tax and earnings opportunities as this gambling replaces that performed through controlled channels,' read a well-circulated AGA memo.
And after that there are the plaintiffs who have taken legal action against social casinos in more than a dozen states.
Sweepstakes casino operators paid a combined $14.2 million in 4 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 suit, 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 most recent suit, which is largely comparable to its predecessors, New York state residents 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 actually likewise been named as offenders in suits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for comment.
'We generally do not talk about matters before the courts,' a VGW representative informed DailyMail.com through email. 'However, we keep in mind that this claim has only simply been submitted with the court and VGW has not been officially served.
'We have full confidence in our compliance with all laws and policies where we operate, and stay confident about the future,' the representative continued. 'We continue to use our free-to-play games throughout many of The United States and Canada, as we have for more than a decade, creating not only fantastic video games, user experiences and entertainment, however also ensuring this is done securely, responsibly and at the greatest 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 industry (and the US more broadly), and our basic practice is that we intend to vigorously defend any claim which may be brought against us.'
The issues in between conventional online gambling and sweepstakes gambling establishments might show problematic for some celebrity 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 traditional video gaming titans like FanDuel and DraftKings.
'It's paradoxical that expert athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the exact same time the leagues desire to predict a strong position against illegal gambling - especially when trying to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.
It was just eight months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over claims he conspired with bettors. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes gambling establishments.
Together with VGW, Apple and Google are being taken legal action against for hosting apparently prohibited gambling sites
Regardless, Glaser sees sweepstakes casinos as a major problem 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 included.
Neither an NBA spokesman nor the players' representatives reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to respond to DailyMail.com e-mails.
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Asked if their celeb endorsers have an obligation to describe to consumers the differences and resemblances 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 collaborations, and our service practices more broadly,' the spokesperson said. 'Some of our worths are" our gamers come first" 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 shady illegal gambling websites are, at a minimum, putting their reputations at threat in addition to courting civil and class actions by customers who declare harm,' Glaser stated. 'There is also some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for helping with prohibited gaming.'
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Sweepstakes Casino Controversy - And Celebrities' All-important Role
Anglea Lockie edited this page 2024-12-22 00:50:39 +00:00