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

No, they weren't personally in attendance, but the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable sites offering both totally free casino-style video games and profitable prizes, such as cash, present 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 numerous video gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes casinos function as traditional casinos, just without the oversight, customer protections and tax laws. So not only can they prevent the steep 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company faces accusations of illegal sports betting in a New york city lawsuit that declares VGW uses star endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's statement listed below)

'I'm not exactly sure" if you do not trust us, you can trust Paris Hilton" is a winning message for companies running multibillion-dollar illegal 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 celebrities from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between standard gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to play at Chumba Casino, where numerous - but 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 normally center around the social aspect of the casinos, while leaving out the potential for actual gaming losses.

Others lure clients with promises of rewards. One such operator, Stake, ran a social media ad revealing off Drake's automobiles, planes and mansions before pivoting to video footage of the rap artist playing online casino-style games.

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

Another caption described: 'Because I never quit.'

The inconsistency between gaming websites and social or sweepstakes gambling establishments is a bit complex, however 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), explained its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, the majority of the gamers on social-sweepstakes gambling establishments are playing for complimentary.

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

Social casinos offer consumers a chance to play casino-style games with good friends. Players have the alternative to buy worthless currency often described as 'gold coins,' which can not be exchanged for real cash, however can be utilized to unlock different functions within the games.

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

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to buy 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 gambling establishment Stake ran an ad showing off Drake's cars, planes and mansions

Karl-Anthony Towns of the New York City 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 sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not require usually require recognition. However, sites like Chumba will request for IDs from gamers 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 gamers follow painfully particular directions. What's more, gamers are typically rewarded with sweeps coins merely for registering, thus providing a factor to try their hands at any number of gambling establishment games for an opportunity to win - or lose - real money.

So why are sweepstakes websites enabled to operate 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 competitors is merely a way of promoting their support.

'Social sweepstakes games are merely a kind of online entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is required to play at social casinos with sweepstakes rewards. Consumers never ever need to pay for a chance to win rewards. That absence of a purchase requirement - or" consideration" - is an important difference between social sweeps and traditional online gambling websites like gambling establishments.'

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

And without a purchase requirement, or 'consideration', the game itself does not fulfill the definition of gambling in the US.

'Sweepstakes are an enduring technique for promoting all kinds of everyday companies in the United States, everything from burgers to magazine memberships to coffee and home improvement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, gaming attorney Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct start and end, thereby recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're generally not connected to casino-style video games of opportunity,' Wallach informed DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] have none of the attributes typically connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payments, generally 80 percent or more of revenues, whereas the common payment percentage for a momentary marketing sweepstakes is an unimportant share of the revenue earned by the company [normally less than one percent]'

Wallach is fast to compare the online social sweeps casinos to the internet coffee shops that sprang up in Florida, providing consumers the possibility to play casino-style games for genuine rewards. A number of those brick-and-mortar establishments have because been shuttered over claims of unlawful gambling.

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

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

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have repeatedly been pointed out by courts and state chief law officer as key factors in figuring out that a sweepstakes promotion was in reality a guise for unlawful gaming.'

Among the casino industry's leading trade organizations, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in some cases, enact brand-new legislation on the concern.

'Consumers are being denied of protections and states are forgoing considerable tax and earnings chances as this gaming replaces that conducted through controlled channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have actually sued social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action lawsuit, saying the settlement was made to prevent legal expenses and continued litigation.

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

In the newest suit, which is mostly comparable 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 explained in the filing as an 'prohibited sports betting enterprise. '

Apple and Google have actually also been named as defendants in claims for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's request for comment.

'We usually don't discuss matters before the courts,' a VGW representative informed DailyMail.com via e-mail. 'However, we note that this claim has actually only just been filed with the court and VGW has not been formally served.

'We have complete confidence in our compliance with all laws and guidelines where we run, and stay positive about the future,' the representative continued. 'We continue to use our free-to-play games across the majority of The United States and Canada, as we have for more than a years, creating not only terrific video games, user experiences and entertainment, but likewise guaranteeing this is done securely, properly and at the greatest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly common throughout the online social games industry (and the US more broadly), and our standard practice is that we plan to intensely defend any claim which may be brought against us.'

The problems in between conventional online sports betting and sweepstakes casinos might show bothersome for some celeb 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 traditional video gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking illegal sports betting 'sweeps' sites while at the very same time the leagues wish to project a strong position against illegal gambling - especially when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was simply 8 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 unrelated to anything involving social or sweepstakes casinos.

Along with VGW, Apple and Google are being demanded hosting allegedly prohibited gambling websites

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

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

Neither an NBA spokesman nor the gamers' representatives reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to respond to DailyMail.com emails.

Asked if their celebrity endorsers have a responsibility to describe to customers the distinctions 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 business practices more broadly,' the representative stated. 'Some of our worths are" our gamers come initially" and" we do what's right", and we put our values at the core of everything we do.'

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

'Celebrities who provide their names to shady unlawful gambling sites are, at a minimum, putting their reputations at threat along with courting civil and class actions by consumers who allege damage,' Glaser stated. 'There is also some danger that state regulators and state lawyers general rope celebrity endorsers into enforcement efforts for assisting in illegal gambling.'

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