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

No, they weren't personally in participation, but the world-famous stars were conspicuously included in a slide presentation on social and sweepstakes gambling establishments - the controversial websites providing both totally free casino-style games and financially rewarding rewards, such as money, 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.

The sites are just 2 cogs in the multibillion-dollar market that now discovers itself besieged by suits. In the eyes of numerous gaming corporations, not to point out suit complainants and state regulators, sweepstakes casinos serve as standard casinos, only without the oversight, consumer defenses and tax laws. So not just can they prevent the high 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 revenue last year alone. Now the business deals with accusations of illegal gaming in a New York lawsuit that declares VGW utilizes celebrity endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's statement below)

'I'm unsure" 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 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, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between traditional gambling and sweepstakes play.
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Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes gambling establishments discovered online

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

Drake has an offer with social sweeps gambling establishment, Stake, that he routinely touts on social networks

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Instead, ads normally center around the social element of the casinos, while omitting the potential for real sports betting losses.

Others lure consumers with guarantees of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's cars, planes and mansions before rotating to footage of the rapper playing online casino-style video games.
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'Daddy, why do we have so much money?' check out the first caption on the screen.
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Another caption explained: 'Because I never quit.'

The discrepancy in between gaming websites and social or sweepstakes gambling establishments is a bit complicated, however operators of the latter insist they're not included with the former.
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A spokesperson 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 majority of the players on social-sweepstakes casinos are playing for complimentary.
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'Most social sweeps customers never buy,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller than the common deposit or wager size at real-money online sports betting websites.'

Social casinos offer customers an opportunity to play casino-style games with good friends. Players have the alternative to buy worthless currency typically described as 'gold coins,' which can not be exchanged for genuine cash, but can be utilized to open various features within the video games.

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

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One player informed 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 ad revealing off Drake's cars, aircrafts and mansions

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 helped to sustain the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit customers to send mail-in ask for totally free sweeps coins, supplied the players follow painfully particular directions. What's more, gamers are often rewarded with sweeps coins just for registering, thus offering them a reason to attempt their hands at any variety of gambling establishment video games for a chance to win - or lose - real money.

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

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

'Social sweepstakes games are simply a kind of online entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never have to spend for a chance to win prizes. That lack of a purchase requirement - or" factor to consider" - is an important distinction in between social sweeps and standard online sports betting sites like casinos.'

Think about the manner in which McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and french fries that provide them the chance to win lucrative prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing approach for promoting all type of everyday businesses in the United States, whatever from burgers to publication memberships to coffee and home enhancement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling market experts, that argument doesn't cut it.

For starters, gaming attorney Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined start and end, thereby recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're typically not connected to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes commonly related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments offer" casino-like" payments, normally 80 percent or more of earnings, whereas the normal payout portion for a short-lived promotional sweepstakes is a minor share of the income made by the company [normally less than one percent]'
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Wallach is fast to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, providing customers the opportunity to play casino-style games for genuine rewards. Many of those brick-and-mortar facilities have since been shuttered over allegations of prohibited gambling.

DJ Khaled is amongst numerous celebrity spokespeople for VGW's Global Poker brand name

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

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have repeatedly been mentioned by courts and state chief law officer as essential factors in determining that a sweepstakes promotion was in truth a guise for unlawful gaming.'

Among the gambling establishment market's leading trade organizations, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, in many cases, enact new legislation on the concern.

'Consumers are being deprived of securities and states are giving up substantial tax and revenue opportunities as this sports betting replaces that carried out through controlled channels,' checked out a well-circulated AGA memo.

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

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

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

In the most recent lawsuit, which is mainly comparable to its predecessors, New york city state citizens 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 gaming enterprise. '

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

'We usually do not comment on matters before the courts,' a VGW spokesperson told DailyMail.com through email. 'However, we note that this claim has actually only just been filed with the court and VGW has actually not been formally served.

'We have complete self-confidence in our compliance with all laws and policies where we run, and stay confident about the future,' the representative continued. 'We continue to provide our free-to-play video games across the majority of The United States and Canada, as we have for more than a years, developing not just excellent games, user experiences and home entertainment, but also ensuring this is done securely, properly and at the highest level of requirements.

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

The issues between conventional online sports betting and sweepstakes casinos could show bothersome for some star endorsers.

Towns, a star center with the Knicks, and the 76ers' George both back VGW's Global Poker brand name while the NBA is partnered with traditional gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking prohibited sports betting 'sweeps' websites while at the exact same time the leagues wish to forecast a strong position versus unlawful gambling - especially when attempting to tamp down the occasional gambling 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.
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Along with VGW, Apple and Google are being sued for hosting supposedly gambling sites

Regardless, Glaser sees sweepstakes casinos as a significant problem for leagues such as the NBA.

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

Neither an NBA spokesman nor the players' representatives responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com e-mails.

Asked if their celebrity endorsers have an obligation to explain to clients the distinctions and resemblances in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that needs to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the spokesperson said. 'A few of our worths are" our players precede" 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 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 danger that state regulators and state attorneys basic rope star endorsers into enforcement efforts for facilitating unlawful gaming.'

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