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

No, they weren't personally in presence, however the world-famous stars were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable sites providing both free casino-style video games and lucrative rewards, such as money, gift 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 simply two cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of many video gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes casinos function as traditional casinos, only without the oversight, consumer defenses and tax laws. So not only can they prevent the high 24-percent federal sports betting levy, but sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming securities.

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

'I'm uncertain" if you don't trust us, you can rely on Paris Hilton" is a winning message for companies operating multibillion-dollar unlawful operations out of locations 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 include a variety of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between standard sports betting and sweepstakes play.

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

Ryan Seacrest urges fans to play at Chumba Casino, where lots of - however not all - video games are totally free

Drake has a handle social sweeps gambling establishment, Stake, that he routinely touts on social media

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Instead, advertisements usually center around the social aspect of the gambling establishments, while omitting the potential for actual sports betting losses.

Others tempt consumers with guarantees of prizes. One such operator, Stake, ran a social media ad revealing off Drake's automobiles, airplanes and estates before pivoting to video footage of the rap artist playing online casino-style games.

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

Another caption discussed: 'Because I never quit.'

The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit intricate, however operators of the latter insist they're not involved with the previous.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, most of the players on social-sweepstakes gambling establishments are playing for free.
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'Most social sweeps clients never purchase,' the SPGA representative informed DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller than the typical deposit or bet size at real-money online sports betting websites.'

Social gambling establishments offer clients a chance to play casino-style video games with pals. Players have the alternative to purchase valueless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be used to open numerous functions within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling clients to acquire other currency known as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for monetary losses, like the ones claimed 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 Worldwide Poker event
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Social sweeps gambling establishment Stake ran an advertisement displaying Drake's cars, planes and estates

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

Traditional online gambling establishments are prohibited in all however 7 states, which has assisted to sustain the popularity of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, allow consumers to send mail-in requests for free sweeps coins, supplied the players follow painfully particular guidelines. What's more, players are typically rewarded with sweeps coins just for registering, consequently providing a factor to try their hands at any number of gambling establishment video games for a possibility to win - or lose - genuine money.

So why are sweepstakes websites permitted to run in 48 states, while online gambling establishments are prohibited in all but 7?

According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competitors is just a means of promoting their bread and butter.
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'Social sweepstakes video games are merely a kind of online home entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never ever have to spend for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an important distinction in between social sweeps and traditional online gaming sites like gambling establishments.'

Think about the manner in which McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that use them the possibility to win financially rewarding prizes, such as a $1 million prize.

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

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

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

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

'They do not last permanently and they're usually not connected to casino-style video games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] have none of the qualities frequently associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payouts, generally 80 percent or more of earnings, whereas the common payout portion for a temporary marketing sweepstakes is a minor share of the revenue earned by the company [usually less than one percent]'
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Wallach is fast to liken the online social sweeps casinos to the internet cafes that emerged in Florida, using customers the chance to play casino-style games for genuine prizes. Much of those brick-and-mortar facilities have considering that been shuttered over allegations of unlawful sports betting.

DJ Khaled is amongst a number of celeb spokespeople for VGW's Global Poker brand name

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

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually consistently been mentioned by courts and state lawyer generals as essential consider figuring out that a sweepstakes promotion remained in reality a guise for unlawful gaming.'

Among the casino market's leading trade companies, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, in some cases, enact brand-new legislation on the concern.

'Consumers are being denied of securities and states are passing up substantial tax and revenue chances as this gambling replaces that conducted through managed channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action suit, saying the settlement was made to avoid legal costs and continued litigation.

Michael Phelps has actually signed a handle the VGW Group, which owns Global Poker
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In the most recent lawsuit, which is mainly comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal sports betting business. '

Apple and Google have likewise been called as accuseds in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's demand for comment.
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'We normally don't comment on matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we note that this claim has only just been filed with the court and VGW has not been formally served.

'We have full confidence in our compliance with all laws and regulations where we operate, and stay confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games across many of North America, as we have for more than a years, developing not only great games, user experiences and home entertainment, however also guaranteeing this is done safely, properly and at the greatest level of standards.

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

The issues in between traditional online gaming and sweepstakes casinos might prove troublesome for some celebrity endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand name while the NBA is partnered with conventional video gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking illegal sports betting 'sweeps' sites while at the same time the leagues wish to project a strong stance against illegal sports betting - specifically when trying to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a 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.

Together with VGW, Apple and Google are being taken legal action against for hosting apparently prohibited sports betting sites

Regardless, Glaser sees sweepstakes gambling establishments 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 included.

Neither an NBA spokesman nor the gamers' representatives reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to respond to DailyMail.com e-mails.

Asked if their star endorsers have an obligation to discuss to clients the differences and resemblances between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the representative said. 'A few of our values are" our gamers come initially" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.

'Celebrities who provide their names to dubious prohibited sports betting sites are, at a minimum, putting their track records at danger as well as courting civil and class actions by consumers who declare damage,' Glaser said. 'There is also some danger that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for helping with illegal gaming.'

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