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

No, they weren't personally in attendance, however the world-famous celebs were notably included in a slide presentation on social and sweepstakes casinos - the questionable websites offering both free casino-style games and lucrative rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone 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 industry that now finds itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos act as conventional gambling establishments, just without the oversight, consumer defenses and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the company faces allegations of illegal gaming in a New York claim that declares VGW utilizes celebrity endorsers to 'create a veneer of authenticity' around its item. (See VGW's statement listed 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 unlawful operations out of locations 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 lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions in between standard gaming and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where many - however not all - games are totally free

Drake has a handle social sweeps gambling establishment, Stake, that he routinely touts on social media

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Instead, advertisements usually focus around the social element of the gambling establishments, while leaving out the potential for actual sports betting losses.

Others tempt consumers with guarantees of rewards. One such operator, Stake, ran a social networks ad showing off Drake's cars and trucks, aircrafts and estates before rotating to footage of the rap artist playing online casino-style video games.

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

Another caption explained: 'Because I never offered up.'

The discrepancy 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 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, many of the gamers on social-sweepstakes gambling establishments are sports betting free.

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

Social gambling establishments use customers a chance to play casino-style video games with pals. Players have the choice to purchase worthless currency frequently referred to as 'gold coins,' which can not be exchanged for real cash, but can be utilized to open various within the games.

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

And therein lies the potential for monetary losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York City. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous 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 event

Social sweeps gambling establishment Stake ran an advertisement displaying Drake's automobiles, 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 normally need recognition. However, sites like Chumba will request for IDs from gamers attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable consumers to send mail-in ask for complimentary sweeps coins, supplied the gamers follow painfully specific directions. What's more, players are typically rewarded with sweeps coins just for signing up, consequently providing them a factor to attempt their hands at any variety of casino games for a possibility to win - or lose - genuine money.

So why are sweepstakes sites enabled to operate in 48 states, while online casinos are prohibited in all but 7?

According to the stakeholders, their product is the complimentary casino-style gaming, and the real-stakes competition is merely a way of promoting their support.

'Social sweepstakes games are merely a type of online entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never have to spend for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is an essential difference between social sweeps and conventional online gaming sites like casinos.'

Think of the manner in which McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and french fries that use them the opportunity to win profitable prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing technique for promoting all sort of everyday businesses in the United States, whatever from hamburgers to publication memberships to coffee and home enhancement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are routinely 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 industry insiders, that argument doesn't cut it.

For starters, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game does not run indefinitely. Rather, it has a distinct beginning and end, consequently suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real items like french fries, shakes, and the Filet-O-Fish.

'They do not 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 frequently related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments provide" casino-like" payments, generally 80 percent or more of profits, whereas the common payment portion for a short-term marketing sweepstakes is a minor share of the revenue earned by the business [normally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, offering clients the opportunity to play casino-style video games for genuine rewards. A lot of those brick-and-mortar establishments have actually because been shuttered over allegations of unlawful gaming.

DJ Khaled is amongst several star spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos should deal with comparable scrutiny.

'These distinctions are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have actually repeatedly been mentioned by courts and state attorney general of the United States as crucial aspects in identifying that a sweepstakes promo was in reality a guise for unlawful sports betting.'

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, in some cases, enact new legislation on the problem.

'Consumers are being deprived of defenses and states are forgoing significant tax and revenue opportunities as this gaming changes that carried out through regulated channels,' checked out a well-circulated AGA memo.

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

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

Michael Phelps has actually signed a handle the VGW Group, which owns Global Poker

In the most current claim, which is largely comparable to its predecessors, New York 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 called as accuseds in claims for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's ask for remark.

'We typically do not comment on matters before the courts,' a VGW representative 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 full self-confidence in our compliance with all laws and policies where we run, and remain confident about the future,' the spokesperson continued. 'We continue to use our free-to-play video games across the majority of The United States and Canada, as we have for more than a decade, creating not just excellent games, user experiences and home entertainment, however also guaranteeing this is done securely, properly and at the highest level of standards.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are fairly typical throughout the online social games industry (and the US more broadly), and our standard practice is that we mean to intensely defend any claim which might be brought versus us.'

The concerns between traditional online gambling and sweepstakes casinos could show problematic 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 traditional video gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking unlawful sports betting 'sweeps' sites while at the very same time the leagues wish to predict a strong position against prohibited gaming - specifically when trying to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over claims he conspired with bettors. 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 demanded hosting presumably unlawful gambling sites

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

'I 'd expect that a league crackdown on professional athletes endorsing sweepstakes websites is a matter of when, not if,' Glaser included.

Neither an NBA spokesperson nor the players' representatives reacted to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also disregarded to respond to DailyMail.com e-mails.

Asked if their celeb endorsers have a responsibility to describe to customers the differences and resemblances between iGaming and sweepstakes casinos, VGW insisted there is nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the representative said. 'A few 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 websites, sees things in a different way.
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'Celebrities who lend their names to shady unlawful gambling websites are, at a minimum, putting their reputations at danger in addition to courting civil and class actions by consumers who allege harm,' Glaser said. 'There is also some danger that state regulators and state lawyers basic rope celebrity endorsers into enforcement efforts for assisting in unlawful sports betting.'

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