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

No, they weren't personally in attendance, however the world-famous celebrities were notably consisted of in a slide discussion on social and sweepstakes casinos - the questionable websites using both free casino-style video games and rewarding prizes, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just 2 cogs in the multibillion-dollar industry that now finds itself besieged by suits. In the eyes of many video gaming corporations, not to discuss claim plaintiffs and state regulators, sweepstakes casinos function as conventional gambling establishments, only without the oversight, customer protections and tax laws. So not just can they prevent the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulatory obstacles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces allegations of prohibited gaming in a New york city claim that claims VGW uses star endorsers to 'produce a veneer of authenticity' around its product. (See VGW's statement below)

'I'm unsure" if you do not trust us, you can trust 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 presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.
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Sweepstakes endorsers consist of a series of celebs from sports betting 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 distinctions between traditional gambling and sweepstakes play.
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Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes casinos found online

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

Drake has a handle social sweeps gambling establishment, Stake, that he regularly promotes on social media

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Instead, ads typically center around the social aspect of the gambling establishments, while leaving out the capacity for actual sports betting losses.

Others tempt customers with guarantees of prizes. One such operator, Stake, ran a social media ad showing off Drake's vehicles, planes and mansions before rotating to footage of the rap artist playing online casino-style games.

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

Another caption discussed: 'Because I never offered up.'

The discrepancy between gambling sites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not included with the former.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, the majority of the gamers on social-sweepstakes casinos are playing for free.

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

Social casinos provide consumers a chance to play casino-style video games with friends. Players have the alternative to buy worthless currency typically described as 'gold coins,' which can not be exchanged for real money, however can be utilized to unlock various features within the video games.

But within the world of social casinos exists sweepstakes gaming, enabling customers to acquire other currency understood 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 plaintiffs 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 Global Poker event

Social sweeps casino Stake ran an advertisement displaying Drake's cars and trucks, airplanes and estates

Karl-Anthony Towns of the New York City Knicks is another NBA star plugging VGW's Global Poker
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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 need typically need identification. However, sites like Chumba will ask for IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to send mail-in ask for free sweeps coins, supplied the players follow painfully particular instructions. What's more, players are frequently rewarded with sweeps coins just for signing up, therefore offering them a factor to try their hands at any variety of gambling establishment games for a possibility to win - or lose - genuine cash.

So why are sweepstakes sites allowed to operate in 48 states, while online gambling establishments are prohibited in all however 7?

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

'Social sweepstakes games are just a kind of online home entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never ever have to spend for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is an important distinction in between social sweeps and conventional online gambling sites like gambling establishments.'

Think of the manner in which 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 provide them the opportunity to win profitable prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself does not satisfy the definition of sports betting in the US.

'Sweepstakes are an enduring technique for promoting all type of daily services in the United States, everything from hamburgers to publication subscriptions to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting industry insiders, that argument doesn't cut it.

For starters, gaming attorney Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct beginning and end, consequently suggesting the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being used to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're typically not tied to casino-style games of opportunity,' Wallach informed DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [casinos] have none of the characteristics frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos use" casino-like" payments, typically 80 percent or more of revenues, whereas the common payment percentage for a short-lived marketing sweepstakes is an unimportant share of the profits earned by the company [normally less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the web cafes that emerged in Florida, providing clients the possibility to play casino-style video games for real rewards. Many of those brick-and-mortar establishments have considering that been shuttered over claims of illegal gambling.

DJ Khaled is amongst several celebrity spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps casinos ought to deal with comparable analysis.

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been pointed out by courts and state lawyer generals as key consider identifying that a sweepstakes promo was in fact a guise for illegal gaming.'

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

'Consumers are being denied of securities and states are forgoing significant tax and income chances as this sports betting changes that carried out through regulated channels,' checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal costs and continued lawsuits.

Michael Phelps has signed an offer with the VGW Group, which owns Global Poker

In the newest lawsuit, which is largely comparable to its predecessors, New York state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gambling enterprise. '

Apple and Google have also been called as defendants in claims for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's ask for comment.

'We usually do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com through e-mail. 'However, we note that this claim has actually only simply been filed with the court and VGW has actually not been formally served.

'We have complete self-confidence in our compliance with all laws and policies where we run, and stay confident about the future,' the representative continued. 'We continue to use our free-to-play games across the majority of North America, as we have for more than a years, producing not just great video games, user experiences and home entertainment, but likewise guaranteeing this is done securely, properly and at the greatest level of requirements.

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

The issues between traditional online gambling and sweepstakes casinos might show troublesome 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 traditional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking unlawful sports betting wagering 'sweeps' websites while at the very same time the leagues wish to predict a strong position against illegal gaming - especially when trying to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a lifetime restriction from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being taken legal action against for hosting allegedly prohibited sports betting websites

Regardless, Glaser sees sweepstakes casinos as a major issue for leagues such as the NBA.

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

Neither an NBA spokesperson nor the gamers' agents reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to react to DailyMail.com emails.

Asked if their star endorsers have a responsibility to explain to clients the differences and resemblances in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the spokesperson stated. 'A few of our values are" our players precede" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken challenger of sites, sees things in a different way.
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'Celebrities who lend their names to shady prohibited gaming sites are, at a minimum, putting their reputations at risk along with courting civil and class actions by consumers who declare harm,' Glaser said. 'There is also some risk that state regulators and state lawyers basic rope celeb endorsers into enforcement efforts for facilitating illegal sports betting.'

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