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

No, they weren't personally in presence, however the world-famous celebrities were notably included in a slide presentation on social and sweepstakes gambling establishments - the controversial websites providing both free casino-style video games and rewarding prizes, 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.
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The websites are just two cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of numerous gaming corporations, not to mention suit complainants and state regulators, sweepstakes gambling establishments function as traditional casinos, only without the oversight, customer securities and tax laws. So not just can they avoid the steep 24-percent federal gambling levy, but sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the business deals with accusations of illegal gaming in a New York claim that claims VGW utilizes star endorsers to 'produce a veneer of authenticity' around its product. (See VGW's declaration below)

'I'm unsure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a series of celebs 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 gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes casinos discovered online
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Ryan Seacrest urges fans to dip into Chumba Casino, where many - however not all - games are totally free

Drake has a handle social sweeps casino, Stake, that he regularly promotes on social networks

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

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

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

Another caption described: 'Because I never quit.'

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

A for an industry 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 information, many of the players on social-sweepstakes gambling establishments are playing for complimentary.

'Most social sweeps clients never purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller sized than the typical deposit or bet size at real-money online gaming sites.'

Social gambling establishments provide consumers an opportunity to play casino-style games with buddies. Players have the option to buy valueless currency frequently described as 'gold coins,' which can not be exchanged for real cash, but can be utilized to unlock numerous features within the games.

But within the world of social casinos exists sweepstakes gaming, permitting consumers to obtain other currency called 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the potential 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 casinos in the previous year after continuing to purchase more coins in pursuit of money and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad flaunting Drake's cars and trucks, aircrafts and mansions

Karl-Anthony Towns of the New York City Knicks is another NBA star plugging VGW's Global Poker

Traditional online casinos are banned in all however 7 states, which has helped to sustain the appeal of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, enable customers to send mail-in demands for complimentary sweeps coins, provided the gamers follow painfully particular directions. What's more, gamers are often rewarded with sweeps coins simply for registering, thereby offering them a reason to try their hands at any number of gambling establishment video games for a chance to win - or lose - genuine money.

So why are sweepstakes websites allowed to run in 48 states, while online casinos are prohibited in all however 7?
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According to the stakeholders, their item is the free casino-style gaming, and the real-stakes competition is merely a method of promoting their support.
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'Social sweepstakes video games are simply a form of online home entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never ever have to spend for an opportunity to win rewards. That absence of a purchase requirement - or" consideration" - is an essential difference in between social sweeps and conventional online sports betting sites like casinos.'

Consider the manner in which McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that use them the opportunity to win profitable prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the game itself does not meet the meaning of gaming in the US.

'Sweepstakes are an enduring approach for promoting all kinds of daily businesses in the United States, everything from hamburgers to magazine subscriptions to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry experts, that argument doesn't cut it.

For starters, gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run forever. Rather, it has a distinct beginning and end, thus suggesting the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote real products like fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're usually not tied to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] possess none of the qualities commonly connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payouts, usually 80 percent or more of revenues, whereas the typical payment portion for a short-term advertising sweepstakes is an unimportant share of the earnings made by the business [normally less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the web coffee shops that emerged in Florida, using customers the opportunity to play casino-style video games for genuine rewards. Much of those brick-and-mortar facilities have considering that been shuttered over accusations of illegal gambling.

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

Now, Wallach argues, social sweeps casinos must face similar examination.

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually repeatedly been mentioned by courts and state chief law officer as key consider identifying that a sweepstakes promotion remained in fact a guise for unlawful gaming.'

One of the gambling establishment market's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, sometimes, enact new legislation on the concern.

'Consumers are being deprived of securities and states are passing up substantial tax and income opportunities as this gaming replaces that carried out through managed channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four separate cases in Kentucky without admitting any wrongdoing, 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 litigation.

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

In the most recent claim, which is mostly similar to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal gambling enterprise. '

Apple and Google have likewise been called as defendants in suits for hosting the sweepstakes websites. But unlike VGW, neither tech business reacted to DailyMail.com's demand for remark.

'We generally do not discuss matters before the courts,' a VGW representative told DailyMail.com by means of email. 'However, we keep in mind that this claim has only simply been submitted 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 stay confident about the future,' the representative continued. 'We continue to provide our free-to-play games across most of The United States and Canada, as we have for more than a years, developing not just fantastic games, user experiences and home entertainment, but also guaranteeing this is done safely, responsibly and at the highest level of standards.

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

The concerns in between conventional online sports betting and sweepstakes gambling establishments could prove 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 paradoxical that professional athletes are hawking illegal sports betting 'sweeps' websites while at the same time the leagues wish to forecast a strong stance against illegal sports betting - especially when trying to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.

It was just eight 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 gambling establishments.

Together with VGW, Apple and Google are being demanded hosting presumably prohibited gambling websites

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

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

Neither an NBA spokesperson nor the gamers' representatives reacted to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise overlooked to react to DailyMail.com emails.

Asked if their star endorsers have a responsibility to describe to clients the differences and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.

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

Glaser, an outspoken opponent of sweepstakes sites, sees things differently.
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'Celebrities who lend their names to shady unlawful sports betting websites are, at a minimum, putting their reputations at danger as well as courting civil and class actions by customers who allege harm,' Glaser stated. 'There is likewise some risk that state regulators and state chief law officers rope celeb endorsers into enforcement efforts for assisting in prohibited gaming.'

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