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

No, they weren't personally in attendance, but the world-famous stars were notably included in a slide presentation on social and sweepstakes casinos - the questionable sites offering both complimentary casino-style video games and profitable rewards, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just two cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of numerous video gaming corporations, not to point out claim complainants and state regulators, sweepstakes casinos act as conventional casinos, just without the oversight, customer securities and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company faces allegations of prohibited gambling in a New york city suit that claims VGW uses star endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration listed below)

'I'm not exactly sure" if you don't trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers consist of a variety of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences between standard gambling and sweepstakes play.

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

Ryan Seacrest urges fans to dip into Chumba Casino, where numerous - however not all - video games are free

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

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Instead, ads generally focus around the social element of the casinos, while omitting the capacity for real gaming losses.

Others tempt consumers with pledges of prizes. One such operator, Stake, ran a social networks ad displaying Drake's cars and trucks, aircrafts and mansions before rotating to video of the rapper playing online casino-style video games.

'Daddy, why do we have a lot cash?' check out the very first caption on the screen.

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

The inconsistency between gambling websites and social or sweepstakes gambling establishments is a bit intricate, however operators of the latter insist they're not included with the former.

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

'Most social sweeps consumers never purchase,' the SPGA representative told DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the normal deposit or wager size at real-money online gambling websites.'

Social casinos offer consumers an opportunity to play casino-style video games with good friends. Players have the choice to purchase worthless currency typically described as 'gold coins,' which can not be exchanged for real cash, however can be utilized to unlock various features within the video games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to get other currency understood as 'sweeps coins' that can be exchanged for cash or other prizes.

And therein lies the potential for monetary losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer 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.

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

Social sweeps gambling establishment Stake ran an ad flaunting Drake's automobiles, aircrafts and mansions

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

Traditional online casinos are banned in all but seven states, which has actually assisted to sustain the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, permit customers to submit mail-in ask for totally free sweeps coins, supplied the players follow painfully specific directions. What's more, gamers are frequently rewarded with sweeps coins merely for signing up, thereby providing a reason to try their hands at any variety of casino games for an opportunity to win - or lose - real money.

So why are sweepstakes websites permitted to run in 48 states, while online casinos are banned in all but 7?

According to the stakeholders, their product is the complimentary casino-style video gaming, and the real-stakes competition is just a method of promoting their bread and butter.

'Social sweepstakes video games are just a form of online home entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never have to pay for a chance to win prizes. That lack of a purchase requirement - or" factor to consider" - is an essential distinction in between social sweeps and standard online sports betting websites like casinos.'

Think about the manner in which McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and french fries that offer them the chance to win rewarding prizes, such as a $1 million jackpot.

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

'Sweepstakes are an enduring method for promoting all type of daily companies in the United States, whatever from hamburgers to magazine subscriptions to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of gambling market insiders, that argument does not cut it.

For starters, video gaming attorney Daniel Wallach explains, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined beginning and end, therefore suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're normally not connected to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're just money free gifts.

'The sweepstakes [gambling establishments] have none of the qualities frequently related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos provide" casino-like" payouts, normally 80 percent or more of revenues, whereas the common payout portion for a momentary promotional sweepstakes is a minor share of the profits made by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, using customers the opportunity to play casino-style games for real rewards. Many of those brick-and-mortar establishments have actually because been shuttered over accusations of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos ought to face comparable scrutiny.

'These differences are not arbitrary,' Wallach stated of social sweeps casinos. 'They have consistently been cited by courts and state attorney generals as essential consider identifying that a sweepstakes promotion was in truth a guise for unlawful gambling.'

Among the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in some cases, enact brand-new legislation on the concern.

'Consumers are being denied of defenses and states are forgoing significant tax and earnings chances as this gambling changes that performed through regulated channels,' read a well-circulated AGA memo.

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

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

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

In the newest claim, which is mostly comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gambling business. '

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

'We generally do not talk about matters before the courts,' a VGW representative informed DailyMail.com by means of email. 'However, we keep in mind that this claim has actually only just been submitted with the court and VGW has actually not been officially served.

'We have complete self-confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the representative continued. 'We continue to offer our free-to-play games throughout the majority of North America, as we have for more than a years, developing not only terrific video games, user experiences and entertainment, but likewise ensuring this is done securely, properly and at the highest level of standards.

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are reasonably typical across the online social games market (and the US more broadly), and our basic practice is that we plan to strongly protect any claim which might be brought against us.'

The issues in between conventional online sports betting and sweepstakes gambling establishments could prove problematic 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 gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking prohibited sports betting 'sweeps' sites while at the very same time the leagues want to predict a strong stance versus unlawful gaming - especially when attempting to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime ban 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.

Together with VGW, Apple and Google are being demanded hosting presumably illegal sports betting websites

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

'I 'd expect that a league crackdown on professional athletes backing sweepstakes websites is a matter of when, not if,' Glaser included.

Neither an NBA spokesman nor the gamers' agents reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com emails.

Asked if their celebrity endorsers have a duty to describe to clients the distinctions and similarities between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the representative said. 'Some of our values are" our players precede" and" we do what's right", and we put our worths at the core of whatever we do.'

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

'Celebrities who provide their names to shady illegal gaming sites are, at a minimum, putting their reputations at danger along with courting civil and class actions by customers who allege damage,' Glaser stated. 'There is also some risk 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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