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

No, they weren't personally in participation, however the world-famous celebrities were conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the controversial sites providing both totally free casino-style video games and lucrative rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are simply two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes casinos function as traditional gambling establishments, only without the oversight, customer defenses and tax laws. So not just can they avoid the high 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the business faces allegations of unlawful gambling in a New york city claim that claims VGW utilizes star endorsers to 'create a veneer of legitimacy' around its product. (See VGW's statement listed below)

'I'm uncertain" if you don't trust us, you can rely on Paris Hilton" is a winning message for companies operating multibillion-dollar illegal 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 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 differences between conventional gambling and sweepstakes play.

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

Ryan Seacrest advises fans to play at Chumba Casino, where numerous - however not all - video games are totally free

Drake has an offer with social sweeps casino, Stake, that he frequently touts on social networks

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Instead, advertisements usually focus around the social aspect of the gambling establishments, while omitting the potential for real 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 rotating to video of the rap artist playing online casino-style video games.

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

Another caption discussed: 'Because I never ever quit.'

The disparity between gaming sites and social or sweepstakes casinos is a bit complicated, but operators of the latter insist they're not included with the previous.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, the majority of the gamers on social-sweepstakes casinos are playing for free.

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

Social casinos provide customers a possibility to play casino-style video games with buddies. Players have the option to buy valueless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to unlock different features within the video games.

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

And therein lies the potential for financial losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York. One player 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 worth.

The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion

Social sweeps casino Stake ran an advertisement displaying Drake's cars, planes and mansions

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 helped to sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which don't need usually need recognition. However, websites like Chumba will request IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for totally free sweeps coins, provided the players follow painfully specific guidelines. What's more, gamers are frequently rewarded with sweeps coins just for registering, consequently providing a factor to try their hands at any number of casino video games for an opportunity to win - or lose - genuine money.

So why are sweepstakes websites allowed to run in 48 states, while online gambling establishments are banned in all however 7?

According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competition is merely a way of promoting their bread and butter.

'Social sweepstakes games are merely a kind of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed to play at social gambling establishments with sweepstakes prizes. Consumers never need to pay for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is an important distinction in between social sweeps and conventional online gambling websites like casinos.'

Consider the manner in which McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and fries that use them the chance to win lucrative rewards, 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 sports betting in the US.

'Sweepstakes are an enduring approach for promoting all sort of everyday services in the United States, whatever from hamburgers to publication memberships to coffee and home improvement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of gambling market experts, that argument does not cut it.

For beginners, gaming lawyer Daniel Wallach explains, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a well-defined start and end, therefore recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real products like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're usually not tied to casino-style games of chance,' told DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [gambling establishments] have none of the qualities frequently connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payouts, normally 80 percent or more of earnings, whereas the typical payment portion for a momentary promotional sweepstakes is an unimportant share of the revenue made by the company [generally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, using customers the opportunity to play casino-style video games for real rewards. Much of those brick-and-mortar establishments have actually given that been shuttered over accusations of illegal sports betting.

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

Now, Wallach argues, social sweeps gambling establishments ought to deal with comparable examination.

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

One of the casino market's leading trade organizations, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, in many cases, enact new legislation on the issue.

'Consumers are being deprived of protections and states are passing up considerable tax and profits opportunities as this sports betting changes that conducted through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs who have taken legal action against 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 admitting any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal costs and continued lawsuits.

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

In the most recent claim, which is mainly similar to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful sports betting business. '

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

'We generally don't discuss matters before the courts,' a VGW spokesperson informed DailyMail.com through e-mail. 'However, we keep in mind that this claim has only just been filed with the court and VGW has not been officially served.

'We have complete self-confidence in our compliance with all laws and policies where we run, and remain confident about the future,' the representative continued. 'We continue to provide our free-to-play games across most of North America, as we have for more than a years, creating not just excellent video games, user experiences and entertainment, however likewise guaranteeing this is done securely, responsibly and at the greatest level of standards.

'More broadly, we 'd reiterate 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 vigorously safeguard any claim which might be brought against us.'

The issues between traditional online gambling and sweepstakes gambling establishments might prove bothersome for some celebrity 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 standard video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking illegal sports betting 'sweeps' websites while at the same time the leagues want to project a strong stance against unlawful sports betting - particularly when trying to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes casinos.

In addition to VGW, Apple and Google are being sued for hosting apparently illegal sports betting sites

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

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

Neither an NBA representative nor the players' 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 e-mails.
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Asked if their celeb endorsers have a responsibility to discuss to clients the distinctions and similarities in between iGaming and sweepstakes casinos, VGW 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 representative stated. 'Some of our values 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 illegal sports betting websites are, at a minimum, putting their reputations at danger along with courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state chief law officers rope star endorsers into enforcement efforts for assisting in illegal sports betting.'

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