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

No, they weren't personally in attendance, however the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites offering both complimentary casino-style video games and financially 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 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 claims. In the eyes of many gaming corporations, not to discuss claim plaintiffs and state regulators, sweepstakes gambling establishments function as traditional gambling establishments, only without the oversight, customer protections and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, but sweepstakes operators aren't based on regulative hurdles 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 company faces allegations of unlawful sports betting in a New york city suit that declares VGW uses celebrity endorsers to 'develop a veneer of authenticity' around its item. (See VGW's declaration listed below)

'I'm not sure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar unlawful 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 include a variety of stars from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between standard gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to play at Chumba Casino, where numerous - however not all - video games are complimentary

Drake has an offer with social sweeps gambling establishment, Stake, that he routinely touts on social media

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Instead, advertisements typically focus around the social aspect of the casinos, while leaving out the capacity for real gaming losses.

Others lure clients with guarantees of prizes. One such operator, Stake, ran a social media ad displaying Drake's cars and trucks, planes and mansions before pivoting to video footage of the rap artist playing online casino-style games.

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

Another caption explained: 'Because I never quit.'

The disparity in between sports betting websites and social or sweepstakes casinos is a bit complicated, but 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), explained its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, the majority of the gamers on social-sweepstakes gambling establishments are playing for totally free.

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

Social gambling establishments offer consumers an opportunity to play casino-style games with good friends. Players have the alternative to buy worthless currency frequently referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be used to open different functions within the video games.

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

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

The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion

Social sweeps gambling establishment Stake ran an ad showing off Drake's vehicles, planes 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 seven states, which has assisted to fuel the popularity of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, allow customers to send mail-in ask for free sweeps coins, provided the players follow painfully particular instructions. What's more, gamers are typically rewarded with sweeps coins just for signing up, consequently providing a reason to try their hands at any number of casino games for an opportunity to win - or lose - genuine money.

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

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

'Social sweepstakes games are simply a type of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to play at social gambling establishments with sweepstakes rewards. Consumers never ever have to spend for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is an essential difference between social sweeps and conventional online gambling sites like casinos.'

Think of the method that McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and french fries that offer them the opportunity to win lucrative rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the game itself does not fulfill the meaning of gambling in the US.

'Sweepstakes are an enduring method for promoting all kinds of daily organizations in the United States, whatever from burgers to publication memberships to coffee and home improvement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are routinely used 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 market insiders, that argument doesn't cut it.

For starters, video gaming lawyer Daniel Wallach explains, McDonald's Monopoly game does not run forever. Rather, it has a well-defined start and end, thus recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real items like french fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [gambling establishments] possess none of the qualities commonly connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments offer" casino-like" payouts, normally 80 percent or more of revenues, whereas the common payment percentage for a short-term promotional sweepstakes is a trivial 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 cafes that emerged in Florida, offering customers the possibility to play casino-style video games for real rewards. A number of those brick-and-mortar establishments have considering that been shuttered over accusations of unlawful sports betting.

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

Now, Wallach argues, social sweeps casinos should face comparable examination.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been mentioned by courts and state attorney generals as crucial factors in determining that a sweepstakes promotion remained in truth a guise for illegal gambling.'

Among the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, in many cases, enact new legislation on the concern.

'Consumers are being denied of protections and states are passing up considerable tax and income chances as this sports betting replaces that performed through regulated channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have sued social gambling establishments in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four separate cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, 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 latest suit, which is mainly similar to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'illegal sports betting enterprise. '

Apple and Google have also been called as defendants in suits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for comment.
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'We normally do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com through email. 'However, we keep in mind that this claim has only just been filed with the court and VGW has actually not been formally served.

'We have full confidence in our compliance with all laws and regulations where we run, and remain positive about the future,' the representative continued. 'We continue to provide our free-to-play games across most of North America, as we have for more than a decade, creating not only great video games, user experiences and home entertainment, but likewise ensuring this is done safely, responsibly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are reasonably common throughout the online social video games industry (and the US more broadly), and our standard practice is that we intend to vigorously defend any claim which may be brought against us.'

The problems in between conventional online gambling and sweepstakes gambling establishments could show troublesome for some celebrity 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 titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking unlawful sports betting 'sweeps' websites while at the very same time the leagues desire to project a strong position against illegal sports betting - specifically when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes casinos.

Along with VGW, Apple and Google are being demanded hosting supposedly prohibited sports betting sites

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

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

Neither an NBA spokesperson nor the gamers' agents responded to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to respond to DailyMail.com e-mails.

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

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

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.
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'Celebrities who provide their names to dubious illegal gambling websites are, at a minimum, putting their credibilities at risk along with courting civil and class actions by customers who declare harm,' Glaser said. 'There is likewise some danger that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for helping with prohibited gambling.'

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