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

No, they weren't personally in attendance, but the world-famous stars were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites offering both totally free casino-style games and rewarding rewards, such as money, gift cards or cryptocurrency. In one advertisement, 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.
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The sites are simply two cogs in the multibillion-dollar industry that now discovers itself besieged by claims. In the eyes of numerous video gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes casinos serve as conventional gambling establishments, only without the oversight, customer defenses and tax laws. So not just can they avoid the high 24-percent federal gaming levy, but sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the business deals with accusations of prohibited gambling in a New york city suit that claims VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration listed below)

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

Sweepstakes endorsers consist of a series of celebrities from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions between standard gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes casinos discovered online

Ryan Seacrest urges fans to play at Chumba Casino, where many - but not all - games are complimentary

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

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Instead, advertisements normally focus around the social aspect of the casinos, while leaving out the capacity for real sports betting losses.

Others tempt consumers with guarantees of prizes. One such operator, Stake, ran a social media advertisement revealing off Drake's vehicles, aircrafts and estates before rotating to video of the rapper playing online casino-style video games.

'Daddy, why do we have so much money?' check out the first caption on the screen.
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Another caption described: 'Because I never ever offered up.'

The discrepancy in between gambling sites and social or sweepstakes casinos is a bit complex, but operators of the latter insist they're not involved with the former.

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 playing for totally free.

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

Social gambling establishments use customers a possibility to play casino-style video games with pals. Players have the choice to purchase valueless currency typically described as 'gold coins,' which can not be exchanged genuine cash, but can be used to open different functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, enabling customers to get other currency referred to 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 City. One player 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.
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The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event

Social sweeps casino Stake ran an ad revealing off 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 seven states, which has helped to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable customers to submit mail-in requests for complimentary sweeps coins, supplied the gamers follow painfully particular directions. What's more, players are frequently rewarded with sweeps coins just for signing up, consequently giving them a factor to try their hands at any number of casino video games for a possibility to win - or lose - real money.

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

According to the stakeholders, their product is the totally free casino-style gaming, and the real-stakes competitors is merely a method of promoting their bread and butter.
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'Social sweepstakes video games are merely a type of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes rewards. Consumers never ever need to spend for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is a vital difference between social sweeps and traditional online gaming websites like casinos.'

Think of 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 provide them the chance to win rewarding prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself doesn't satisfy the meaning of gaming in the US.

'Sweepstakes are a long-standing technique for promoting all sort of everyday businesses in the United States, whatever from burgers to publication subscriptions to coffee and home enhancement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of sports betting market insiders, that argument doesn't cut it.

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined beginning and end, thereby suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote genuine products like french fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [casinos] possess none of the qualities frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments offer" casino-like" payments, generally 80 percent or more of revenues, whereas the normal payout percentage for a temporary marketing sweepstakes is a of the revenue earned by the company [usually less than one percent]'

Wallach is quick to liken the online social sweeps casinos to the web cafes that emerged in Florida, using clients the chance to play casino-style games for real rewards. A number of those brick-and-mortar establishments have given that been shuttered over claims of prohibited gaming.
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DJ Khaled is amongst several celebrity spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos need to deal with comparable examination.

'These distinctions are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually repeatedly been pointed out by courts and state lawyer generals as crucial consider determining that a sweepstakes promo remained in reality a guise for prohibited sports betting.'

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, sometimes, enact brand-new legislation on the problem.

'Consumers are being denied of securities and states are giving up considerable tax and earnings chances as this gambling replaces that conducted through controlled channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, saying the settlement was made to prevent legal expenses and continued litigation.
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Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the current lawsuit, which is mainly similar to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited sports betting enterprise. '

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

'We normally do not discuss matters before the courts,' a VGW representative told DailyMail.com by means of email. 'However, we note that this claim has only simply been submitted with the court and VGW has actually not been officially served.

'We have complete self-confidence in our compliance with all laws and guidelines where we run, and stay positive about the future,' the representative continued. 'We continue to provide our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a years, creating not only fantastic video games, user experiences and entertainment, however also guaranteeing this is done safely, properly and at the highest level of requirements.

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

The concerns in between traditional online gambling and sweepstakes casinos might show troublesome for some celebrity 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 conventional gaming titans like FanDuel and DraftKings.

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

It was simply 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 unrelated to anything including social or sweepstakes casinos.

Together with VGW, Apple and Google are being demanded hosting supposedly prohibited 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 athletes backing sweepstakes websites is a matter of when, not if,' Glaser included.

Neither an NBA spokesperson nor the players' representatives responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to respond to DailyMail.com emails.

Asked if their celeb endorsers have an obligation to describe to customers the distinctions and resemblances 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 organization practices more broadly,' the spokesperson 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 whatever we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who lend their names to shady prohibited gambling websites are, at a minimum, putting their track records at threat as well as courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating prohibited sports betting.'

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