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

No, they weren't personally in participation, however the world-famous celebs were conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites using both complimentary 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 anybody can 'play for complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply two cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to mention suit plaintiffs and state regulators, sweepstakes gambling establishments function as traditional gambling establishments, just without the oversight, customer protections and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulative obstacles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the company deals with allegations of prohibited gaming in a New York claim that claims VGW utilizes celebrity endorsers to 'produce a veneer of authenticity' around its product. (See VGW's declaration listed below)

'I'm not sure" if you don't trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a variety of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions in between traditional gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to play at Chumba Casino, where numerous - however not all - games are totally free

Drake has an offer with social sweeps casino, Stake, that he routinely promotes on social media

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Instead, advertisements generally focus around the social aspect of the gambling establishments, while leaving out the capacity for actual gambling losses.
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Others lure customers with promises of prizes. One such operator, Stake, ran a social networks ad displaying Drake's automobiles, aircrafts and estates before rotating to video of the rapper playing online casino-style games.
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'Daddy, why do we have a lot cash?' check out the first caption on the screen.

Another caption explained: 'Because I never quit.'

The discrepancy between sports betting websites and social or sweepstakes casinos is a bit complex, 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 competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, the majority of the players 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 sized than the typical deposit or wager size at real-money online sports betting sites.'

Social casinos use consumers a chance to play casino-style games with pals. Players have the choice to buy valueless currency typically referred to as 'gold coins,' which can not be exchanged for real cash, however can be utilized to open different features within the video games.

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

And therein lies the capacity for monetary losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer 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 cash and other things of value.

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

Social sweeps casino Stake ran an ad revealing off Drake's cars, planes 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 assisted to sustain the appeal of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which do not require generally need recognition. However, sites like Chumba will ask for IDs from gamers attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, permit consumers to submit mail-in demands for free sweeps coins, offered the gamers follow painfully specific guidelines. What's more, players are frequently rewarded with sweeps coins just for registering, therefore providing a factor to try their hands at any number of casino video games for a chance to win - or lose - real money.
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So why are sweepstakes websites enabled to operate in 48 states, while online gambling establishments are prohibited in all however 7?

According to the stakeholders, their item is the totally free casino-style video gaming, and the real-stakes competitors is simply a way of promoting their bread and butter.

'Social sweepstakes video games are merely a type of online home entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is needed to play at social gambling establishments with sweepstakes prizes. Consumers never have to pay for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is a crucial difference between social sweeps and traditional online gaming sites like gambling establishments.'

Think about the method that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and french fries that provide them the chance to win rewarding prizes, such as a $1 million jackpot.
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And without a purchase requirement, or 'factor to consider', the game itself does not satisfy the definition of sports betting in the US.

'Sweepstakes are a long-standing approach for promoting all sort of daily services in the United States, whatever from burgers to magazine memberships to coffee and home improvement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are frequently utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of gambling market insiders, that argument doesn't cut it.

For starters, gaming lawyer Daniel Wallach points out, McDonald's Monopoly video game doesn't run forever. Rather, it has a distinct start and end, thus recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're normally not tied to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're simply money free gifts.
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'The sweepstakes [casinos] possess none of the attributes commonly related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos offer" casino-like" payouts, typically 80 percent or more of earnings, whereas the common payout portion for a temporary advertising sweepstakes is an unimportant share of the revenue made by the business [normally less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the internet coffee shops that emerged in Florida, using customers the chance to play casino-style games for genuine rewards. A lot of those brick-and-mortar establishments have actually because been shuttered over claims of prohibited sports betting.

DJ Khaled is among numerous celebrity 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 consistently been mentioned by courts and state lawyer generals as crucial consider figuring out that a sweepstakes promo was in fact a guise for prohibited gaming.'

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

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

And then 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 admitting any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal expenses and continued lawsuits.

Michael Phelps has actually signed an offer with the VGW Group, which owns Global Poker

In the current claim, which is mostly similar to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'illegal gaming enterprise. '

Apple and Google have likewise been called as defendants in claims for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for comment.

'We usually do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com by means of e-mail. 'However, we keep in mind that this claim has actually only just been filed with the court and VGW has not been officially served.

'We have full confidence in our compliance with all laws and regulations 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, producing not just fantastic video games, user experiences and entertainment, but likewise ensuring 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 video games industry (and the US more broadly), and our basic practice is that we intend to vigorously safeguard any claim which may be brought against us.'

The issues between standard online gambling and sweepstakes casinos could show troublesome for some star endorsers.

Towns, a star center with the Knicks, and the 76ers' George both back 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 'sweeps' websites while at the exact same time the leagues want to project a strong position versus illegal gambling - especially when attempting to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.
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It was just eight months ago that Toronto Raptors forward Jontay Porter received a lifetime restriction from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes gambling establishments.

Together with VGW, Apple and Google are being demanded hosting allegedly illegal gambling websites

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

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

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

Asked if their celebrity endorsers have an obligation to describe to consumers the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative said. 'Some of our values are" our players come first" 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 lend their names to shady prohibited gambling sites are, at a minimum, putting their reputations at danger as well as courting civil and class actions by customers who declare damage,' Glaser stated. 'There is also some threat that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in prohibited gaming.'

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