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

No, they weren't personally in attendance, but the world-famous celebrities were notably included in a slide discussion on social and sweepstakes casinos - the questionable sites offering both free casino-style video games and financially rewarding rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are just two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to discuss claim plaintiffs and state regulators, sweepstakes casinos serve as standard gambling establishments, just without the oversight, consumer defenses and tax laws. So not just can they prevent the high 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulative hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces accusations of unlawful sports betting in a New York suit that declares VGW uses celeb endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's statement below)

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

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

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

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

Drake has a handle social sweeps casino, Stake, that he frequently touts on social networks

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Instead, advertisements usually center around the social aspect of the gambling establishments, while leaving out the capacity for actual gaming losses.

Others tempt customers with promises of prizes. One such operator, Stake, ran a social networks advertisement displaying Drake's cars, aircrafts and estates before pivoting to footage of the rapper playing online casino-style video games.

'Daddy, why do we have a lot money?' read the very first caption on the screen.

Another caption described: 'Because I never ever quit.'

The inconsistency in between gaming websites and social or sweepstakes gambling establishments is a bit complicated, 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 competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, most of the players on social-sweepstakes gambling establishments are playing for totally free.

'Most social sweeps customers never ever buy,' the SPGA spokesperson told DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the common deposit or bet size at real-money online gaming websites.'

Social casinos offer consumers a possibility to play casino-style games with good friends. Players have the option to purchase valueless currency typically referred to as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to unlock numerous functions within the games.

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

And therein lies the potential for financial losses, like the ones claimed by complainants 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 previous year after continuing to buy more coins in pursuit of cash and other things of worth.

The Philadelphia 76ers' Paul George is seen promoting a Global Poker event
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Social sweeps gambling establishment Stake ran an ad displaying Drake's vehicles, airplanes 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 7 states, which has assisted to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, allow clients to submit mail-in requests for totally free sweeps coins, provided the gamers follow painfully particular directions. What's more, players are frequently rewarded with sweeps coins just for signing up, thus providing a factor to attempt their hands at any variety of gambling establishment video games for a possibility to win - or lose - real cash.

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

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

'Social sweepstakes games are just a kind of online 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 ever have to spend for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is an essential difference in between social sweeps and conventional online gaming websites like gambling establishments.'

Think about the manner in which McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that offer them the chance to win profitable prizes, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the video game itself does not satisfy the definition of sports betting in the US.

'Sweepstakes are an enduring technique for promoting all sort of daily organizations in the United States, whatever from burgers to publication memberships to coffee and home improvement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are frequently used 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 experts, that argument does not cut it.

For beginners, gaming lawyer Daniel Wallach explains, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a well-defined beginning and end, therefore recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're generally not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're just money free gifts.

'The sweepstakes [gambling establishments] have none of the qualities commonly related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, normally 80 percent or more of earnings, whereas the normal payout percentage for a temporary marketing sweepstakes is an unimportant share of the profits made by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the web cafes that sprang up in Florida, providing clients the opportunity to play casino-style video games for genuine rewards. A number of those brick-and-mortar facilities have because been shuttered over allegations of unlawful gaming.

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

Now, Wallach argues, social sweeps gambling establishments must deal with similar analysis.

'These distinctions are not arbitrary,' Wallach stated of social sweeps casinos. 'They have consistently been cited by courts and state lawyer generals as key factors in determining that a sweepstakes promo was in truth a guise for unlawful gaming.'

Among the casino market's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in many cases, enact new legislation on the issue.

'Consumers are being denied of protections and states are giving up significant tax and earnings chances as this gambling replaces that performed through controlled channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have taken legal action against social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, stating the settlement was made to prevent legal costs and continued litigation.

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

In the latest claim, which is largely comparable to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'illegal sports betting business. '

Apple and Google have also been named as defendants in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for comment.
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'We typically don't comment on matters before the courts,' a VGW spokesperson informed DailyMail.com through e-mail. 'However, we note that this claim has only simply been filed with the court and VGW has actually not been formally served.

'We have complete confidence in our compliance with all laws and regulations where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to use our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a years, developing not just fantastic games, user experiences and entertainment, but also guaranteeing this is done safely, properly and at the highest level of requirements.

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

The issues in between standard online sports betting and sweepstakes casinos could show bothersome for some celeb 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 standard video gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking unlawful sports betting wagering 'sweeps' websites while at the same time the leagues desire to forecast a strong position versus illegal gaming - specifically when attempting to tamp down the periodic gambling scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter got a lifetime ban from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.

Together with VGW, Apple and Google are being demanded hosting supposedly illegal gambling sites

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

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

Neither an NBA representative nor the players' representatives reacted 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 emails.

Asked if their celebrity endorsers have a duty to discuss to clients the differences and similarities between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative stated. 'A few of our values are" our players come initially" and" we do what's right", and we put our worths at the core of whatever we do.'
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Glaser, an outspoken challenger of sweepstakes websites, sees things in a different way.

'Celebrities who lend their names to shady illegal sports betting sites are, at a minimum, putting their credibilities at danger along with courting civil and class actions by customers who declare damage,' Glaser said. 'There is likewise some risk that state regulators and state lawyers basic rope star endorsers into enforcement efforts for assisting in illegal gambling.'

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