The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on prohibited gambling.

No, they weren't personally in presence, however the world-famous celebs were notably included in a slide discussion on social and sweepstakes casinos - the controversial websites using both totally free casino-style video games and financially rewarding prizes, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for totally 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 industry that now finds itself besieged by claims. In the eyes of many video gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes gambling establishments serve as traditional casinos, only without the oversight, consumer protections and tax laws. So not just can they prevent the steep 24-percent federal gaming levy, but sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits in 2015 alone. Now the business faces allegations of prohibited gambling in a New York claim that declares VGW utilizes celeb endorsers to 'develop a veneer of authenticity' around its item. (See VGW's statement listed below)

'I'm not sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar unlawful operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a range of celebs 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 offer any differences in between traditional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments found online

Ryan Seacrest urges fans to play at Chumba Casino, where numerous - but not all - video games are totally free

Drake has a handle social sweeps casino, Stake, that he frequently promotes on social media

Read More

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

Instead, ads typically focus around the social aspect of the gambling establishments, while leaving out the capacity for real gaming losses.

Others lure clients with promises of prizes. One such operator, Stake, ran a social media ad displaying Drake's vehicles, airplanes and mansions before pivoting to footage of the rap artist playing online casino-style video games.
bit.ly
'Daddy, why do we have so much money?' read the first caption on the screen.

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

The discrepancy in between sports betting sites and social or sweepstakes gambling establishments is a bit complex, however operators of the latter insist they're not involved with the former.

A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA information, the majority of the gamers on social-sweepstakes casinos are playing for complimentary.

'Most social sweeps clients never ever purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller than the typical deposit or bet size at real-money online gambling websites.'

Social gambling establishments offer consumers a possibility to play casino-style games with pals. Players have the choice to purchase valueless currency frequently described as 'gold coins,' which can not be exchanged for real cash, but can be used to unlock numerous features within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling consumers to obtain other currency understood as 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the capacity for financial losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York City. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to buy more coins in pursuit of money and other things of worth.

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

Social sweeps casino Stake ran an ad displaying Drake's vehicles, 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 however 7 states, which has helped to sustain the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable clients to send mail-in ask for free sweeps coins, provided the players follow painfully particular instructions. What's more, players are frequently rewarded with sweeps coins simply for registering, consequently offering them a factor to try their hands at any variety of gambling establishment video games for a chance to win - or lose - genuine money.

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

According to the stakeholders, their item is the free casino-style gaming, and the real-stakes competitors is just a means of promoting their bread and butter.
bet9ja.com
'Social sweepstakes games are simply a type of online home entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never ever need to spend for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is a vital distinction in between social sweeps and conventional online sports betting sites like casinos.'

Think about the manner in which McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and french fries that offer them the opportunity to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the video game itself does not satisfy the definition of gambling in the US.

'Sweepstakes are a long-standing method for promoting all type of everyday organizations in the United States, whatever from hamburgers to publication subscriptions to coffee and home enhancement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are routinely used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry experts, that argument doesn't cut it.

For beginners, video gaming attorney Daniel Wallach mentions, McDonald's Monopoly 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 french 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 informed DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [casinos] possess none of the characteristics frequently connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos offer" casino-like" payouts, normally 80 percent or more of earnings, whereas the normal payment portion for a temporary promotional sweepstakes is an unimportant share of the profits earned by the business [generally less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the web cafes that sprang up in Florida, providing consumers the chance to play casino-style video games for genuine prizes. A number of those brick-and-mortar facilities have considering that been shuttered over accusations of prohibited gambling.

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

Now, Wallach argues, social sweeps gambling establishments need to face comparable analysis.

'These differences are not arbitrary,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been pointed out by courts and state chief law officer as crucial consider identifying that a sweepstakes promo remained in reality a guise for unlawful sports betting.'

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact new legislation on the problem.

'Consumers are being denied of protections and states are giving up significant tax and revenue chances as this gambling replaces that carried out through controlled channels,' checked out a well-circulated AGA memo.
bet9ja.com
And then there are the complainants who have taken legal action against social casinos in more than a dozen states.
bet9ja.com
Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any wrongdoing, 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 expenses and continued lawsuits.

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

In the current suit, which is mostly 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 'illegal gaming enterprise. '

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

'We normally don't discuss matters before the courts,' a VGW spokesperson told .com via email. 'However, we note that this claim has only just been submitted with the court and VGW has actually not been formally served.

'We have complete confidence in our compliance with all laws and policies where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play games throughout the majority of North America, as we have for more than a decade, developing not only terrific video games, user experiences and entertainment, but likewise guaranteeing this is done securely, properly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are relatively common across the online social video games industry (and the US more broadly), and our basic practice is that we plan to intensely safeguard any claim which may be brought versus us.'

The concerns between standard online sports betting and sweepstakes gambling establishments might prove problematic 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 standard video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting wagering 'sweeps' websites while at the exact same time the leagues want to project a strong position versus unlawful gaming - specifically when trying to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being taken legal action against for hosting presumably prohibited gambling websites
bet9ja.com
Regardless, Glaser sees sweepstakes casinos as a significant issue for leagues such as the NBA.

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

Neither an NBA representative nor the players' representatives reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to react to DailyMail.com emails.

Asked if their celebrity endorsers have an obligation to discuss to clients the differences and resemblances between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely 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 worths are" our players precede" and" we do what's right", and we put our values at the core of everything we do.'
bet9ja.com
Glaser, an outspoken challenger of sweepstakes sites, sees things differently.
bet9ja.com
'Celebrities who provide their names to dubious prohibited gambling sites are, at a minimum, putting their reputations at danger along with courting civil and class actions by customers who allege damage,' Glaser said. 'There is likewise some threat that state regulators and state chief law officers rope star endorsers into enforcement efforts for helping with prohibited gambling.'

New YorkNBADrakeParis Hilton