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 presence, however the world-famous celebs were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the controversial websites providing both complimentary casino-style video games and rewarding rewards, such as cash, gift cards or cryptocurrency. In one ad, 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 sites are just two cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of numerous video gaming corporations, not to point out lawsuit complainants and state regulators, sweepstakes casinos serve as traditional casinos, just without the oversight, customer protections and tax laws. So not just can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulatory obstacles 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 business deals with accusations of illegal sports betting in a New York claim that claims VGW uses celebrity endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's declaration listed below)

'I'm not sure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies running multibillion-dollar unlawful operations out of locations 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 include a variety of stars from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any differences between standard gambling and sweepstakes play.

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

Ryan Seacrest urges fans to dip into Chumba Casino, where lots of - however not all - video games are totally free

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

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Instead, ads usually center around the social element of the gambling establishments, while omitting the capacity for real gaming losses.

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

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

Another described: 'Because I never ever quit.'

The discrepancy in between gambling sites and social or sweepstakes gambling establishments is a bit complicated, however operators of the latter insist they're not included with the previous.

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, the majority of the players on social-sweepstakes gambling establishments are sports betting free.

'Most social sweeps customers never make a purchase,' the SPGA spokesperson informed DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the common deposit or wager size at real-money online gambling sites.'

Social gambling establishments provide consumers a possibility to play casino-style video games with friends. Players have the alternative to buy worthless currency frequently referred to as 'gold coins,' which can not be exchanged genuine cash, but can be used to unlock various features within the video games.

But within the world of social casinos exists sweepstakes gaming, allowing clients to acquire other currency understood as 'sweeps coins' that can be exchanged for cash or other prizes.
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And therein lies the potential for monetary losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York. One player told 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 money and other things of value.

The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker occasion

Social sweeps gambling establishment Stake ran an ad flaunting Drake's automobiles, aircrafts and estates

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 7 states, which has assisted to fuel the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which don't require generally require recognition. However, sites like Chumba will request for IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for free sweeps coins, provided the players follow painfully specific instructions. What's more, gamers are typically rewarded with sweeps coins simply for signing up, consequently offering them a factor to try their hands at any variety of gambling establishment games for a possibility to win - or lose - genuine money.
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So why are sweepstakes websites permitted to run in 48 states, while online gambling establishments are prohibited in all however 7?
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According to the stakeholders, their product is the totally free casino-style gaming, and the real-stakes competitors is just a way of promoting their bread and butter.
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'Social sweepstakes video games are just a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never have to pay for a chance to win rewards. That lack of a purchase requirement - or" factor to consider" - is a crucial distinction between social sweeps and standard online gaming sites like casinos.'

Consider the way that McDonald's uses its annual Monopoly 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 'factor to consider', the video game itself does not satisfy the definition of gambling in the US.

'Sweepstakes are an enduring method for promoting all kinds of everyday services in the United States, everything from burgers to publication subscriptions to coffee and home enhancement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions 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 does not cut it.

For beginners, gaming attorney Daniel Wallach explains, McDonald's Monopoly video game does not run forever. Rather, it has a well-defined start and end, thereby recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote genuine products like french fries, shakes, and the Filet-O-Fish.
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'They don't last permanently and they're generally not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [casinos] have none of the attributes frequently connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments provide" casino-like" payouts, normally 80 percent or more of profits, whereas the normal payout percentage for a temporary advertising sweepstakes is a trivial share of the profits made by the business [generally less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the web cafes that sprang up in Florida, using consumers the chance to play casino-style games for genuine rewards. A number of those brick-and-mortar facilities have actually given that been shuttered over claims of unlawful gaming.

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

Now, Wallach argues, social sweeps casinos need to deal with similar analysis.

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually repeatedly been pointed out by courts and state attorney general of the United States as essential aspects in figuring out that a sweepstakes promo remained in truth a guise for illegal gambling.'

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 giving up substantial tax and revenue opportunities as this gambling replaces that carried out through managed channels,' checked out a well-circulated AGA memo.

And after that there are the complainants 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 admitting any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to avoid legal expenses and continued lawsuits.
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Michael Phelps has signed a deal with the VGW Group, which owns Global Poker

In the newest lawsuit, which is largely similar to its predecessors, New york city state citizens Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gaming business. '

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

'We usually do not discuss matters before the courts,' a VGW representative told DailyMail.com via email. 'However, we keep in mind that this claim has only simply 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 operate, and remain confident about the future,' the representative continued. 'We continue to use our free-to-play games across most of The United States and Canada, as we have for more than a decade, developing not only terrific video games, user experiences and home entertainment, but also guaranteeing this is done securely, responsibly and at the highest level of standards.

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

The problems between conventional online gambling and sweepstakes gambling establishments might show troublesome for some star endorsers.

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

'It's ironic that expert athletes are hawking illegal sports betting wagering 'sweeps' sites while at the same time the leagues desire to predict a strong position against prohibited gaming - specifically when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter received a life time restriction from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.

Along with VGW, Apple and Google are being demanded hosting supposedly illegal sports betting sites

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

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

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

Asked if their star endorsers have a duty to describe to consumers the distinctions and similarities between iGaming and sweepstakes casinos, VGW insisted there is nothing more that needs to be done.

'We have full self-confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative said. 'A few of our worths are" our players come initially" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.

'Celebrities who lend 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 declare harm,' Glaser said. 'There is also some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating prohibited gambling.'

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