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

The sites are just 2 cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of lots of gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes gambling establishments act as traditional casinos, just without the oversight, customer defenses and tax laws. So not only can they prevent the high 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the company deals with accusations of unlawful gambling in a New York suit that declares VGW uses star endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm not sure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar prohibited operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, 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, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences 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 play at Chumba Casino, where numerous - however not all - games are complimentary

Drake has a handle social sweeps casino, Stake, that he regularly touts on social networks

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Instead, advertisements generally focus around the social aspect of the casinos, while leaving out the potential for real gambling losses.

Others tempt consumers with promises of rewards. One such operator, Stake, ran a social networks ad displaying Drake's vehicles, aircrafts and mansions before pivoting to video of the rap artist playing online casino-style video games.

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

Another caption described: 'Because I never ever quit.'

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

A representative for an industry 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 data, most of the gamers on social-sweepstakes casinos are playing for totally free.

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

Social gambling establishments use consumers a chance to play casino-style video games with buddies. Players have the option to buy worthless currency typically described as 'gold coins,' which can not be exchanged for genuine money, but can be utilized to unlock different functions within the games.

But within the world of social casinos exists sweepstakes gaming, permitting clients to obtain other currency known as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York City. One player informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to purchase more coins in pursuit of cash and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad displaying Drake's vehicles, aircrafts and estates

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 sustain the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit consumers to send mail-in ask for free sweeps coins, provided the players follow painfully specific directions. What's more, players are frequently rewarded with sweeps coins merely for registering, therefore providing 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 enabled to run in 48 states, while online gambling establishments are banned in all but 7?

According to the stakeholders, their product is the totally free casino-style video gaming, and the real-stakes competition is simply a way of promoting their support.

'Social sweepstakes video games are simply a type of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never ever have to pay for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an essential distinction between social sweeps and conventional online gaming websites like casinos.'

Think of the way that McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that provide them the chance to win rewarding rewards, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing method for promoting all kinds of daily services in the United States, everything from hamburgers to magazine memberships to coffee and home improvement stores,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting industry experts, that argument does not cut it.

For beginners, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined beginning and end, thereby suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote genuine products like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're usually not connected to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [casinos] have none of the qualities typically connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments provide" casino-like" payouts, usually 80 percent or more of earnings, whereas the typical payment portion for a short-term promotional sweepstakes is a minor share of the revenue earned by the business [typically less than one percent]'

Wallach is fast to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, using customers the chance to play casino-style video games for real prizes. A number of those brick-and-mortar facilities have actually considering that been shuttered over allegations of unlawful sports betting.

DJ Khaled is among a number of star spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps gambling establishments should deal with similar examination.

'These distinctions are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually consistently been pointed out by courts and state chief law officer as essential consider identifying that a sweepstakes promo was in fact a guise for unlawful gaming.'

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

'Consumers are being denied of defenses and states are passing up substantial tax and profits chances as this gambling changes that carried out through managed channels,' read 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 gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal costs and continued lawsuits.

Michael Phelps has actually 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 citizens Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gaming business. '

Apple and Google have actually also been named as accuseds in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's request for comment.

'We generally do not comment on matters before the courts,' a VGW representative told DailyMail.com through email. 'However, we note that this claim has actually only just been filed with the court and VGW has actually not been officially served.

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

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly common throughout the online social video games industry (and the US more broadly), and our standard practice is that we plan to intensely safeguard any claim which might be brought versus us.'

The problems in between traditional online gaming and sweepstakes gambling establishments could prove troublesome for some star 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 conventional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the same time the leagues want to predict a strong stance against prohibited gambling - particularly when attempting to tamp down the periodic gambling scandal,' Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over accusations 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 casinos as a major concern for leagues such as the NBA.

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

Neither an NBA representative nor the players' representatives responded to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to react to DailyMail.com emails.

Asked if their celebrity endorsers have a responsibility to discuss to consumers the distinctions and resemblances in between iGaming and sweepstakes casinos, VGW firmly insisted there is 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 representative stated. 'Some of our values are" our gamers precede" 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 lend their names to dubious illegal sports betting websites are, at a minimum, putting their track records at risk as well as courting civil and class actions by customers who allege damage,' Glaser stated. 'There is also some risk that state regulators and state attorneys basic rope celeb endorsers into enforcement efforts for facilitating illegal sports betting.'

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