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, but the world-famous celebs were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the controversial websites offering both totally free casino-style video games and rewarding rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of many gaming corporations, not to point out claim plaintiffs and state regulators, sweepstakes gambling establishments function as traditional gambling establishments, just without the oversight, customer defenses and tax laws. So not only can they prevent the steep 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business faces allegations of prohibited gambling in a New York suit that claims VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's statement below)

'I'm not exactly sure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies running multibillion-dollar prohibited 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 range of celebrities from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between conventional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes casinos found online

Ryan Seacrest advises fans to dip into Chumba Casino, where lots of - but not all - video games are totally free

Drake has an offer with social sweeps casino, Stake, that he routinely promotes on social networks

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Instead, ads normally focus around the social element of the gambling establishments, while leaving out the capacity for actual gambling losses.

Others lure clients with promises of rewards. One such operator, Stake, ran a social media ad revealing off Drake's automobiles, planes and mansions before pivoting to footage of the rap artist playing online casino-style video games.

'Daddy, why do we have a lot money?' read the very first caption on the screen.

Another caption described: 'Because I never provided up.'

The inconsistency between gaming sites and social or sweepstakes gambling establishments is a bit intricate, however 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), discussed its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the players on social-sweepstakes gambling establishments are playing for complimentary.

'Most social sweeps clients never ever buy,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller sized than the normal deposit or bet size at real-money online sports betting websites.'

Social casinos provide customers a possibility to play casino-style games with good friends. Players have the alternative to buy worthless currency typically referred to as 'gold coins,' which can not be exchanged genuine cash, but can be used to unlock different features within the games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing consumers to get other currency known as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the potential for monetary losses, like the ones claimed by complainants 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 past year after continuing to purchase more coins in pursuit of money and other things of value.

The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker occasion

Social sweeps gambling establishment Stake ran an advertisement flaunting Drake's cars and trucks, airplanes and mansions

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

Traditional online casinos are prohibited in all but seven states, which has helped to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in ask for complimentary sweeps coins, supplied the players follow painfully particular instructions. What's more, gamers are frequently rewarded with sweeps coins just for signing up, therefore providing them a factor to attempt their hands at any number of casino games for an opportunity to win - or lose - genuine cash.

So why are sweepstakes websites enabled to operate in 48 states, while online gambling establishments are banned in all however 7?

According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competitors is simply a method of promoting their bread and butter.

'Social sweepstakes video games are just a form of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never have to spend for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is an important difference between social sweeps and traditional online sports betting websites like gambling establishments.'

Consider the way that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and french fries that use them the chance to win profitable prizes, such as a $1 million prize.

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

'Sweepstakes are a long-standing approach for promoting all sort of daily businesses in the United States, whatever from burgers to publication memberships to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely utilized 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 beginners, gaming attorney Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined start and end, thereby suggesting the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote real products like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're typically not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [casinos] possess none of the characteristics commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payments, normally 80 percent or more of earnings, whereas the normal payout percentage for a momentary promotional sweepstakes is a trivial share of the profits earned by the business [generally less than one percent]'

Wallach is fast to liken the online social sweeps gambling establishments to the web coffee shops that sprang up in Florida, offering consumers the opportunity to play casino-style games for genuine prizes. A lot of those brick-and-mortar facilities have actually because been shuttered over allegations of illegal gaming.

DJ Khaled is among numerous celeb spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps gambling establishments need to face similar examination.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually consistently been pointed out by courts and state attorney general of the United States as key elements in determining that a sweepstakes promotion was in truth a guise for prohibited sports betting.'

Among the gambling establishment market's leading trade organizations, the American Gaming Association, is now pushing legislators to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being deprived of protections and states are giving up substantial tax and profits chances as this gambling changes that performed through controlled channels,' checked out a well-circulated AGA memo.

And then there are the plaintiffs who have taken legal action against social casinos in more than a lots states.

Sweepstakes casino operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to avoid legal costs and continued lawsuits.

Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the most current lawsuit, which is largely comparable to its predecessors, New york city state residents 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 'unlawful sports betting business. '

Apple and Google have actually likewise been named as accuseds in claims for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for remark.

'We usually do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com via 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 self-confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,' the representative continued. 'We continue to provide our free-to-play video games across most of The United States and Canada, as we have for more than a years, producing not just fantastic video games, user experiences and entertainment, however likewise guaranteeing this is done safely, responsibly and at the greatest level of requirements.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are reasonably common throughout the online social video games market (and the US more broadly), and our basic practice is that we mean to strongly safeguard any claim which might be brought against us.'

The issues between conventional online gaming and sweepstakes casinos might show bothersome for some celebrity endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand while the NBA is partnered with traditional 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 wish to predict a strong position versus illegal gambling - especially when attempting to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was just eight 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 unrelated to anything including social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being demanded hosting presumably illegal gambling websites

Regardless, Glaser sees sweepstakes gambling establishments as a significant issue for leagues such as the NBA.

'I 'd anticipate that a league crackdown on professional athletes backing sweepstakes websites refers when, not if,' Glaser added.

Neither an NBA spokesman nor the players' representatives reacted to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com emails.

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

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson said. 'A few of our worths are" our players come initially" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things in a different way.

'Celebrities who provide their names to shady illegal gambling sites are, at a minimum, putting their track records at threat along with courting civil and class actions by customers who allege damage,' Glaser said. 'There is also some danger that state regulators and state lawyers basic rope star endorsers into enforcement efforts for helping with prohibited gaming.'

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