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, but the world-famous stars were notably included in a slide discussion on social and sweepstakes casinos - the controversial sites providing both free casino-style games and financially rewarding rewards, such as money, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet totally free,' 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 market that now finds itself besieged by suits. In the eyes of many gaming corporations, not to point out suit complainants and state regulators, sweepstakes gambling establishments act as traditional gambling establishments, just without the oversight, consumer defenses and tax laws. So not just can they prevent the steep 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the company faces accusations of prohibited sports betting in a New York claim that claims VGW uses star endorsers to 'develop a veneer of authenticity' around its item. (See VGW's declaration listed below)

'I'm unsure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar prohibited 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 consist of a series of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences in between conventional sports betting and sweepstakes play.

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

Ryan Seacrest urges fans to dip into Chumba Casino, where lots of - however not all - video games are free

Drake has a deal with social sweeps gambling establishment, Stake, that he regularly touts on social networks

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Instead, ads usually focus around the social aspect of the casinos, while omitting the potential for actual sports betting losses.

Others lure consumers with guarantees of rewards. One such operator, Stake, ran a social networks ad showing off Drake's cars and trucks, planes and mansions before pivoting to footage of the rapper playing online casino-style games.

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

Another caption discussed: 'Because I never ever 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 involved with the previous.

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

'Most social sweeps clients never ever purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller sized than the normal deposit or bet size at real-money online sports betting websites.'

Social casinos use customers an opportunity to play casino-style games with pals. Players have the choice to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged for genuine money, but can be utilized to unlock numerous features within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, allowing consumers to get other currency referred to as 'sweeps coins' that can be exchanged for money 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 told the Washington Post he lost more than $100,000 on sweepstakes casinos in the past 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 Global Poker occasion

Social sweeps casino Stake ran an advertisement flaunting Drake's cars, 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 prohibited in all however seven states, which has actually assisted to fuel the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which don't need generally need identification. However, sites like Chumba will ask for IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to submit mail-in requests for free sweeps coins, supplied the players follow painfully specific directions. What's more, players are typically rewarded with sweeps coins simply for registering, thus providing a factor to attempt their hands at any number of casino video games for a chance to win - or lose - genuine cash.

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

According to the stakeholders, their item is the totally free casino-style video gaming, and the real-stakes competition is merely a way of promoting their support.

'Social sweepstakes video games are just a type of online home entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never ever need to pay for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is an important difference between social sweeps and standard online sports betting sites like casinos.'

Think about the manner in which McDonald's utilizes its annual Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and french fries that use them the possibility 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 meaning of gaming in the US.

'Sweepstakes are an enduring method for promoting all sort of everyday companies in the United States, everything from burgers to magazine memberships to coffee and home enhancement shops,' the SPGA spokesperson informed 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 many sports betting market experts, that argument does not cut it.

For starters, gaming attorney Daniel Wallach mentions, McDonald's Monopoly video game doesn't run forever. Rather, it has a distinct beginning and end, consequently suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote real items like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're typically not tied to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the attributes frequently connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payouts, generally 80 percent or more of revenues, whereas the common payment portion for a temporary advertising sweepstakes is a trivial share of the earnings earned by the company [generally less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, using customers the possibility to play casino-style video games for real prizes. Much of those brick-and-mortar facilities have given that been shuttered over accusations of unlawful sports betting.

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

Now, Wallach argues, social sweeps casinos must deal with comparable analysis.

'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have repeatedly been mentioned by courts and state lawyer generals as essential aspects in determining that a sweepstakes promo remained in fact a guise for prohibited gambling.'

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

'Consumers are being deprived of securities and states are forgoing significant tax and income opportunities as this sports betting changes that carried out through regulated channels,' read a well-circulated AGA memo.

And after that there are the plaintiffs who have actually sued social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in four separate cases in Kentucky without admitting 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 expenses and continued litigation.

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

In the current suit, which is largely comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gaming business. '

Apple and Google have actually likewise been called as accuseds in claims for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's demand for remark.

'We typically do not talk about matters before the courts,' a VGW representative told DailyMail.com through email. 'However, we keep in mind that this claim has actually only simply been submitted with the court and VGW has actually not been officially served.

'We have complete self-confidence in our compliance with all laws and guidelines where we run, and stay positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games across most of North America, as we have for more than a decade, developing not only terrific games, user experiences and entertainment, however also guaranteeing this is done safely, responsibly and at the greatest level of standards.

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

The concerns in between traditional online gambling and sweepstakes casinos might prove bothersome for some star 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 ironic that professional athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to forecast a strong position against illegal sports betting - especially when trying to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

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

In addition to VGW, Apple and Google are being taken legal action against for hosting supposedly prohibited gambling websites

Regardless, Glaser sees sweepstakes casinos 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 added.

Neither an NBA spokesperson nor the gamers' agents responded to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also disregarded to react to DailyMail.com emails.

Asked if their celeb endorsers have an obligation to explain to clients the distinctions and similarities in between iGaming and sweepstakes casinos, 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 organization practices more broadly,' the representative said. 'Some of our worths are" our gamers come initially" and" we do what's right", and we put our values at the core of whatever we do.'

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

'Celebrities who provide their names to dubious unlawful sports betting sites are, at a minimum, putting their reputations at danger along with courting civil and class actions by customers who allege damage,' Glaser said. 'There is likewise some risk that state regulators and state chief law officers rope celeb endorsers into enforcement efforts for facilitating unlawful gambling.'

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