Paris Hilton, Drake, and NBA icons ‘create a veneer of legitimacy’ for sweepstakes casinos

On the 20th of December, Louisiana’s Senate had Paris Hilton and Ryan Seacrest, some of the most popular celebrities, on display in a presentation file during a debate on illegal gambling. The senate presented two ads from some sweepstake casinos. In one of the advertisements, Hilton posed holding a chip for Wow Vegas. In another ad, Seacrest was also promoting a sweepstake, Chumba Casino.

Casinos like Chumba and Wow Vegas are just two of the hundreds of sweepstakes in the United States. Many gambling companies view sweepstakes as a less-regulated form of regular online betting sites. This is especially true since sweepstakes do not follow the rules of standard betting sites. Gambling operators get to skip the regulations in consumer protection and anti-money laundering laws and the 24% federal gambling tax requirement.

Not long ago, Virtual Gaming Worlds (VGW), an Australian casino, reported $4 billion in revenue annually. VGW has been sued because several users claim it uses celebrities to create a false sense of legitimacy around the product offerings. More celebrities partner with sweepstakes now than ever. On the list of such celebs are Drake,DJ Khaled, Michael Phelps, and Karl-Anthony Towns.

One of the main issues lawmakers poked at in the celebrity-endorsing sweepstakes case is that most celebs don’t let their viewers know how sweepstakes are different from other types of gambling and, most importantly, the risks involved.

Official Statements:

Speaking on behalf of the Social and Promotional Gaming Association (SPGA), one of their spokespersons maintained that SPGA members do not compete with other online casinos and sportsbooks. The spokesperson further clarified that, according to SPGA data, most of the players using social sweepstakes play for free. Most sweep players never actually make any purchases. And for the few that do, they buy in-game currency known as sweep coins.

These sweep coins are what users use to bet on sweepstake casinos. However, the option for users to buy sweep coins also means they can lose the amount invested in the game. In a particular Washington Post report, a sweepstakes player mentioned losing over a hundred thousand dollars in one year. Two other players, Lamar Prater and Rebecca Pratt, professed to lose more than a thousand dollars to VGW. Now, they’re suing the casino for being an illegal gambling enterprise.

For sweepstakes lovers, social sweeps are just a form of online entertainment. However, others, like gaming attorney Daniel Wallach, point out that sweeps are a cover for illegal gambling. In a recent memo, the American Gaming Association (AGA) stated how consumers are deprived of protection due to the lack of regulation on social sweepstakes. The association highlights how US states neglect significant tax and revenue opportunities by overlooking sweepstakes. The AGA urged legislators to look into sweepstakes operators and pass new laws that benefit consumers and the states.

Final Say

Celebrities must carefully choose how they partner with sweepstakes for marketing purposes. Some gambling promotions may become a problem. For instance, Toronto Raptors forward Jontay Porter was permanently banned from the NBA over accusations of conspiring with gamblers. Even though Ponter’s scandal was not related to the sweepstakes casino, it perfectly shows the danger allegations of gambling or facilitating illegal gambling can cause.

Sources:

1. Social and Promotional Gaming Association (SPGA): Organization advocating for transparent, innovative, and responsible social and promotional gaming.
2. American Gaming Association (AGA): Premier national trade group for the U.S. casino industry, fostering legal and regulated gaming.
3. “How Paris Hilton, Drake, and NBA stars ‘create veneer of legitimacy’ for disputed sweepstakes casinos” https://www.dailymail.co.uk/sport/othersports/article-14187775/Paris-Hilton-Drake-NBA-Seacrest-sweepstakes-casinos.html/.dailymai.co.uk. December 13, 2024.