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

No, they weren't personally in participation, but the world-famous celebrities were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites using both totally free casino-style games and lucrative rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of numerous video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos serve as traditional casinos, just without the oversight, consumer protections and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, but sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the company deals with accusations of unlawful gaming in a New York lawsuit that declares VGW utilizes star endorsers to 'create a veneer of legitimacy' around its product. (See VGW's statement listed below)

'I'm unsure" if you do not trust us, you can rely on 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 presenter, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a variety of celebs from sports betting 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 in between standard gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes casinos found online

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

Drake has an offer with social sweeps gambling establishment, Stake, that he regularly touts on social media
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Instead, advertisements usually center around the social aspect of the casinos, while omitting the capacity for real gaming losses.

Others lure customers with pledges of rewards. One such operator, Stake, ran a social media ad revealing off Drake's vehicles, airplanes and estates before rotating to video 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 described: 'Because I never ever quit.'

The inconsistency in between gaming websites and social or sweepstakes gambling establishments is a bit intricate, but operators of the latter insist they're not included with the previous.
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A spokesperson for an industry 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, the majority of the gamers on social-sweepstakes gambling establishments are sports betting free.

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

Social casinos provide clients a chance to play casino-style video games with pals. Players have the option to buy valueless currency typically referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be used to unlock numerous features within the games.

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

And therein lies the capacity for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer informed the he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to buy more coins in pursuit of cash and other things of value.

The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion
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Social sweeps casino Stake ran an advertisement displaying Drake's automobiles, airplanes and estates

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

Traditional online gambling establishments are banned in all however seven states, which has helped to fuel the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not need usually need identification. However, websites like Chumba will request IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit consumers to send mail-in ask for complimentary sweeps coins, provided the players follow painfully specific guidelines. What's more, gamers are typically rewarded with sweeps coins just for registering, therefore providing them a factor to attempt their hands at any number of casino games for an opportunity to win - or lose - real cash.

So why are sweepstakes sites permitted to run in 48 states, while online gambling establishments are banned in all however 7?

According to the stakeholders, their product is the free casino-style gaming, and the real-stakes competitors is merely a method of promoting their support.

'Social sweepstakes games are simply a type of online home entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never need to spend for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is an important distinction in between social sweeps and conventional online gaming websites like gambling establishments.'

Think about 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 fries that use them the opportunity to win profitable prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself doesn't meet the definition of sports betting in the US.

'Sweepstakes are an enduring approach for promoting all type of daily organizations in the United States, whatever from burgers to magazine memberships to coffee and home enhancement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are routinely utilized 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 industry insiders, that argument does not cut it.

For starters, video gaming attorney Daniel Wallach mentions, McDonald's Monopoly game does not run forever. Rather, it has a well-defined beginning and end, thus suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're usually not connected to casino-style games of chance,' Wallach told DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes frequently associated with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos offer" casino-like" payments, typically 80 percent or more of revenues, whereas the common payout portion for a short-term promotional sweepstakes is an unimportant share of the income earned by the business [usually less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the internet coffee shops that emerged in Florida, offering customers the chance to play casino-style games for real rewards. Much of those brick-and-mortar establishments have since been shuttered over accusations of prohibited gaming.

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

Now, Wallach argues, social sweeps gambling establishments should face similar scrutiny.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have consistently been pointed out by courts and state chief law officer as key consider determining that a sweepstakes promotion was in reality a guise for unlawful sports betting.'

One of the casino market's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being deprived of defenses and states are giving up considerable tax and profits chances as this sports betting changes that carried out through managed channels,' checked out a well-circulated AGA memo.
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And after that there are the plaintiffs who have actually taken legal action against social casinos in more than a lots states.

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

Michael Phelps has actually signed a deal with the VGW Group, which owns Global Poker

In the most recent claim, which is mostly comparable to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited sports betting business. '

Apple and Google have also been called as defendants in suits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's ask for remark.
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'We generally do not talk about matters before the courts,' a VGW spokesperson told DailyMail.com by means of e-mail. 'However, we keep in mind that this claim has only just been submitted with the court and VGW has not been formally served.

'We have complete self-confidence in our compliance with all laws and guidelines where we operate, and stay confident about the future,' the representative continued. 'We continue to provide our free-to-play video games across 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 guaranteeing this is done safely, properly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly common across the online social video games market (and the US more broadly), and our basic practice is that we intend to strongly defend any claim which might be brought versus us.'

The problems between traditional online gaming 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 name while the NBA is partnered with standard gaming titans like FanDuel and DraftKings.

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

It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over accusations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being taken legal action against for hosting allegedly unlawful gambling sites

Regardless, Glaser sees sweepstakes gambling establishments as a significant 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 included.

Neither an NBA representative nor the players' agents responded to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to respond to DailyMail.com emails.

Asked if their celeb endorsers have a duty to explain to consumers the distinctions and resemblances in between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.
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'We have complete confidence in our influencer and ambassadorial partnerships, and our company practices more broadly,' the representative said. 'Some of our values are" our players precede" and" we do what's right", and we put our values at the core of whatever we do.'

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

'Celebrities who lend their names to shady prohibited gambling sites are, at a minimum, putting their track records at threat in addition to courting civil and class actions by customers who declare harm,' Glaser stated. 'There is also some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating illegal gaming.'

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