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

No, they weren't personally in presence, but the world-famous celebs were notably consisted of in a slide discussion on social and sweepstakes casinos - the controversial websites providing both free casino-style games and profitable prizes, such as cash, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet 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 market that now discovers itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes casinos act as traditional casinos, just without the oversight, consumer defenses and tax laws. So not just can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't based on regulative obstacles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the business faces allegations of illegal sports betting in a New york city lawsuit that claims VGW uses celeb endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's declaration below)

'I'm not sure" if you don't trust us, you can rely on 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, told DailyMail.com.

Sweepstakes endorsers consist of a series of celebrities from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between standard sports betting and sweepstakes play.

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

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

Drake has a deal with social sweeps casino, Stake, that he routinely promotes on social media

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Instead, advertisements generally center around the social aspect of the casinos, while omitting the potential for real sports betting losses.

Others lure clients with pledges of rewards. One such operator, Stake, ran a social networks ad revealing off Drake's cars, airplanes and estates before pivoting to video footage of the rap artist playing online casino-style video games.

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

Another caption described: 'Because I never ever gave up.'

The inconsistency in between gambling sites and social or sweepstakes gambling establishments is a bit complex, but operators of the latter insist they're not involved with the former.

A spokesperson for an industry 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 information, the majority of the players on social-sweepstakes casinos are playing for complimentary.

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

Social gambling establishments provide customers an opportunity to play casino-style video games with pals. Players have the choice to buy worthless currency typically referred to as 'gold coins,' which can not be exchanged for real cash, but can be used to unlock various functions within the games.

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

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

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

Social sweeps gambling establishment Stake ran an ad showing off Drake's vehicles, planes and estates

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

Traditional online gambling establishments are banned in all but seven states, which has actually helped to sustain the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes websites, which don't require usually require identification. However, websites like Chumba will request for IDs from players attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow customers to submit mail-in ask for complimentary sweeps coins, offered the players follow painfully specific guidelines. What's more, gamers are often rewarded with sweeps coins merely for registering, thus 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 sites enabled 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 gaming, and the real-stakes competition is just a means of promoting their support.

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

Think of the way that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and french fries that provide them the chance to win profitable prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself doesn't meet the definition of gaming in the US.

'Sweepstakes are a long-standing method for promoting all type of everyday companies in the United States, whatever from hamburgers to magazine memberships to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling market insiders, that argument does not cut it.

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

'They don't last permanently and they're generally not connected to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just money free gifts.

'The sweepstakes [casinos] have none of the attributes commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payouts, usually 80 percent or more of profits, whereas the common payment percentage for a short-lived advertising sweepstakes is a trivial share of the earnings earned by the business [normally less than one percent]'

Wallach is quick to compare the online social sweeps gambling establishments to the internet cafes that sprang up in Florida, using consumers the opportunity to play casino-style games for real rewards. Many of those brick-and-mortar facilities have considering that been shuttered over accusations of illegal gambling.

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

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

'These distinctions are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually repeatedly been pointed out by courts and state attorney general of the United States as crucial consider identifying that a sweepstakes promo remained in reality a guise for unlawful gaming.'

Among the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing legislators to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the problem.

'Consumers are being deprived of protections and states are giving up considerable tax and income opportunities as this sports betting replaces that conducted through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs who have actually taken legal action against social casinos in more than a lots states.

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

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

In the most recent claim, which is mostly similar to its predecessors, New york city state citizens Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gaming business. '

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

'We normally don't comment on 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 actually not been officially served.

'We have full self-confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the spokesperson continued. 'We continue to offer our free-to-play games across the majority of North America, as we have for more than a decade, producing not only fantastic video games, user experiences and home entertainment, however likewise guaranteeing this is done securely, properly and at the highest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are reasonably typical across the online social video games market (and the US more broadly), and our standard practice is that we mean to intensely protect any claim which might be brought against us.'

The problems in between standard online gambling and sweepstakes gambling establishments could 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 video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting wagering 'sweeps' sites while at the very same time the leagues desire to forecast a strong stance against illegal sports betting - especially when trying to tamp down the occasional gaming scandal,' Glaser informed DailyMail.com.

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

Along with VGW, Apple and Google are being demanded hosting supposedly prohibited gambling sites

Regardless, Glaser sees sweepstakes gambling establishments as a major problem for leagues such as the NBA.

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

Neither an NBA representative nor the gamers' agents reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also ignored to react to DailyMail.com emails.

Asked if their celebrity endorsers have an obligation to discuss to clients the differences and resemblances in between iGaming and sweepstakes casinos, VGW insisted there is nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the spokesperson stated. 'A few of our values are" our players precede" and" we do what's right", and we put our worths at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.

'Celebrities who provide their names to shady prohibited gambling websites are, at a minimum, putting their track records at threat in addition to courting civil and class actions by customers who allege harm,' Glaser said. 'There is also some risk that state regulators and state attorneys basic rope star endorsers into enforcement efforts for helping with illegal sports betting.'

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