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

No, they weren't personally in participation, but the world-famous stars were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the questionable websites offering both complimentary casino-style games and financially rewarding prizes, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are just 2 cogs in the multibillion-dollar industry that now discovers itself besieged by claims. In the eyes of many video gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes casinos serve as conventional casinos, only without the oversight, customer securities and tax laws. So not just can they prevent the high 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company deals with accusations of unlawful sports betting in a New york city lawsuit that claims VGW utilizes celeb endorsers to 'develop a veneer of authenticity' around its item. (See VGW's declaration listed below)

'I'm uncertain" if you don't trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar unlawful operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebs 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 distinctions in between traditional gambling 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 lots of - however not all - video games are totally free

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

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Instead, advertisements typically center around the social element of the gambling establishments, while omitting the capacity for actual gaming losses.

Others tempt clients with promises of rewards. One such operator, Stake, ran a social media ad displaying Drake's cars, airplanes and mansions before rotating to video of the rap artist playing online casino-style video games.

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

Another caption discussed: 'Because I never quit.'

The disparity between gaming sites and social or sweepstakes gambling establishments is a bit intricate, however operators of the latter insist they're not included 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 gambling establishments and sportsbooks. Furthermore, according to SPGA data, the of the gamers on social-sweepstakes gambling establishments are playing for complimentary.

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

Social gambling establishments offer clients a chance to play casino-style games with buddies. Players have the choice to purchase valueless currency frequently referred to as 'gold coins,' which can not be exchanged genuine cash, but can be used to unlock numerous features within the video games.

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

And therein lies the capacity for financial losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York. One player told 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 money and other things of value.

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

Social sweeps casino Stake ran an advertisement flaunting 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 but seven 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 require typically require identification. However, sites like Chumba will request for IDs from gamers attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in demands for totally free sweeps coins, provided the gamers follow painfully specific directions. What's more, players are typically rewarded with sweeps coins just for registering, consequently offering them a factor to attempt their hands at any number of gambling establishment video games for a chance to win - or lose - genuine money.

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

According to the stakeholders, their item is the complimentary casino-style gaming, and the real-stakes competition is simply a method of promoting their bread and butter.

'Social sweepstakes games are simply a kind of online home entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never ever have to spend for an opportunity to win prizes. That lack of a purchase requirement - or" consideration" - is an important difference in between social sweeps and traditional online gaming sites like gambling establishments.'

Think about the manner in which McDonald's uses its annual Monopoly video 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 lucrative prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing technique for promoting all type of daily businesses in the United States, everything from burgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run indefinitely. Rather, it has a distinct beginning and end, thus recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real items like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're typically not tied to casino-style games of possibility,' Wallach told DailyMail.com. 'They're just money giveaways.

'The sweepstakes [gambling establishments] possess none of the attributes typically related to McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payments, typically 80 percent or more of profits, whereas the typical payout portion for a momentary advertising sweepstakes is an unimportant share of the income earned by the business [typically less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, using clients the possibility to play casino-style games for genuine prizes. Much of those brick-and-mortar facilities have actually given that been shuttered over allegations of illegal gaming.

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

Now, Wallach argues, social sweeps gambling establishments should face comparable analysis.

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have consistently been mentioned by courts and state lawyer generals as essential factors in identifying that a sweepstakes promotion remained in truth a guise for prohibited gaming.'

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

'Consumers are being denied of securities and states are giving up substantial tax and profits chances as this gaming replaces that performed through managed channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal costs and continued lawsuits.

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

In the newest claim, which is mostly comparable to its predecessors, New York state residents Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal sports betting enterprise. '

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

'We typically don't discuss matters before the courts,' a VGW representative told DailyMail.com by means of email. 'However, we keep in mind that this claim has actually only just been filed with the court and VGW has actually not been formally served.

'We have complete confidence in our compliance with all laws and policies where we run, and stay confident about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games across most of North America, as we have for more than a years, creating not only terrific video games, user experiences and home entertainment, but also guaranteeing this is done securely, responsibly and at the highest level of requirements.

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

The issues between traditional online gambling and sweepstakes gambling establishments could show bothersome for some celebrity 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 gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking illegal sports betting wagering 'sweeps' websites while at the same time the leagues want to forecast a strong stance versus prohibited gaming - particularly when trying to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.

Along with VGW, Apple and Google are being demanded hosting presumably illegal gambling sites

Regardless, Glaser sees sweepstakes casinos as a significant issue 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' representatives reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise overlooked to react to DailyMail.com emails.

Asked if their star endorsers have a duty to describe to clients the differences and resemblances between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the representative stated. 'A few of our worths are" our gamers precede" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who lend their names to dubious prohibited gaming websites are, at a minimum, putting their reputations at danger along with courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating illegal sports betting.'

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