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

No, they weren't personally in presence, however the world-famous stars were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the controversial sites providing both totally free casino-style video games and profitable rewards, such as money, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' 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 claims. In the eyes of many gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes gambling establishments serve as standard casinos, just without the oversight, customer protections and tax laws. So not just can they prevent the steep 24-percent federal sports betting levy, however 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 earnings in 2015 alone. Now the business faces accusations of prohibited gambling in a New york city suit that claims VGW utilizes celebrity endorsers to 'create a veneer of authenticity' around its item. (See VGW's statement listed below)

'I'm uncertain" if you don't trust us, you can trust Paris Hilton" is a winning message for companies running 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, informed DailyMail.com.

Sweepstakes endorsers include a series of celebs from sports betting lovers 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 conventional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes gambling establishments found online

Ryan Seacrest advises fans to dip into Chumba Casino, where many - but not all - games are complimentary

Drake has an offer with social sweeps casino, Stake, that he regularly promotes on social networks

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Instead, ads generally center around the social aspect of the casinos, while leaving out the capacity for actual gaming losses.

Others lure customers with guarantees of rewards. One such operator, Stake, ran a social media advertisement displaying Drake's cars and trucks, aircrafts and mansions before rotating to video footage of the rap artist playing online casino-style video games.

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

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

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

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

'Most social sweeps clients never ever make a purchase,' the SPGA representative informed DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller sized than the normal deposit or bet size at real-money online gaming websites.'

Social gambling establishments use consumers a possibility to play casino-style video games with friends. Players have the option to purchase worthless currency typically described as 'gold coins,' which can not be exchanged genuine money, but can be used to unlock various functions within the video games.

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

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

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

Social sweeps casino Stake ran an advertisement displaying Drake's cars, aircrafts 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 but 7 states, which has helped to fuel the appeal of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, permit consumers to send mail-in ask for totally free sweeps coins, offered the players follow painfully specific guidelines. What's more, gamers are typically rewarded with sweeps coins merely for signing up, consequently providing a reason to try their hands at any variety of casino video games for an opportunity to win - or lose - genuine cash.

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

According to the stakeholders, their item is the complimentary casino-style gaming, and the real-stakes competitors is merely a way of promoting their bread and butter.

'Social sweepstakes video games are merely a type of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to dip into social casinos with sweepstakes prizes. Consumers never need to pay for an opportunity to win rewards. That absence of a purchase requirement - or" consideration" - is an essential distinction in between social sweeps and traditional online sports betting sites like gambling establishments.'
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Think about the method that McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and fries that use them the possibility to win rewarding prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the game itself doesn't meet the meaning of gambling in the US.
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'Sweepstakes are an enduring approach for promoting all kinds of daily services in the United States, whatever from burgers to publication subscriptions to coffee and home enhancement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct start and end, therefore recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're normally not tied to casino-style games of chance,' Wallach informed DailyMail.com. 'They're just money giveaways.

'The sweepstakes [gambling establishments] have none of the qualities typically related to McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payouts, typically 80 percent or more of earnings, whereas the normal payment percentage for a short-term promotional sweepstakes is a minor share of the profits made by the business [usually less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the web cafes that emerged in Florida, providing clients the chance to play casino-style games for genuine rewards. A lot of those brick-and-mortar facilities have actually considering that been shuttered over claims of prohibited gaming.

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

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

'These distinctions are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state chief law officer as key consider identifying that a sweepstakes promotion was in reality a guise for illegal sports betting.'

One of the gambling establishment market's leading trade companies, the Association, is now pushing legislators to investigate sweepstakes operators and, in some cases, enact brand-new legislation on the concern.

'Consumers are being denied of protections and states are giving up significant tax and profits opportunities as this sports betting changes that carried out through regulated channels,' checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued lawsuits.

Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the most recent claim, which is mostly comparable to its predecessors, New York state residents 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 sports betting enterprise. '
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Apple and Google have actually likewise been named as accuseds in claims for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for comment.

'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 actually only simply been filed with the court and VGW has actually not been formally served.

'We have full self-confidence in our compliance with all laws and regulations where we run, and stay confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play games throughout the majority of North America, as we have for more than a decade, producing not just great games, user experiences and home entertainment, but also guaranteeing this is done safely, responsibly and at the highest level of requirements.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are relatively typical throughout the online social video games industry (and the US more broadly), and our basic practice is that we plan to intensely protect any claim which may be brought against us.'

The problems in between standard online sports betting and sweepstakes gambling establishments could show troublesome for some celeb 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' websites while at the same time the leagues want to forecast a strong stance versus unlawful gambling - especially when attempting to tamp down the periodic gambling scandal,' Glaser told DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a life time restriction from the NBA over accusations he conspired with gamblers. 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 prohibited gambling websites

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

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

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

Asked if their celebrity endorsers have a duty to discuss to clients the distinctions and resemblances between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that needs to be done.

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

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

'Celebrities who provide their names to dubious unlawful gambling websites are, at a minimum, putting their track records at risk as well as courting civil and class actions by consumers who allege damage,' Glaser said. 'There is likewise some risk that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for facilitating unlawful sports betting.'

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