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

No, they weren't personally in presence, however the world-famous celebs were notably included in a slide presentation on social and sweepstakes gambling establishments - the controversial sites providing both complimentary casino-style video games and lucrative prizes, such as money, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to point out suit complainants and state regulators, sweepstakes gambling establishments function as conventional casinos, only without the oversight, consumer securities and tax laws. So not only can they prevent the high 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the company faces accusations of prohibited gambling in a New york city suit that declares VGW utilizes celebrity endorsers to 'develop a veneer of authenticity' around its item. (See VGW's statement listed below)

'I'm not sure" if you do not trust us, you can trust 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 video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a variety of celebrities 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 differences in between traditional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to dip into Chumba Casino, where numerous - however not all - video games are free

Drake has a deal with social sweeps gambling establishment, Stake, that he regularly touts on social media

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Instead, ads usually center around the social aspect of the casinos, while leaving out the capacity for actual gambling losses.

Others lure customers with promises of prizes. One such operator, Stake, ran a social media ad flaunting Drake's cars, planes and mansions before rotating to video footage of the rapper playing online casino-style games.

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

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

The discrepancy between gaming sites and social or sweepstakes casinos is a bit complicated, however 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), explained 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 casinos are sports betting complimentary.

'Most social sweeps consumers never ever purchase,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller than the typical deposit or wager size at real-money online gaming websites.'

Social casinos offer consumers a possibility to play casino-style video games with friends. Players have the choice to buy worthless currency often described as 'gold coins,' which can not be exchanged for genuine money, but can be used to unlock various features within the games.

But within the world of social casinos exists sweepstakes video gaming, permitting consumers to acquire other currency referred to as 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the potential for monetary losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One player informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to buy 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 revealing off Drake's cars, planes and mansions

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

Traditional online casinos are prohibited in all but seven states, which has actually helped to fuel the popularity of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in demands for totally free sweeps coins, provided the players follow painfully particular instructions. What's more, players are frequently rewarded with sweeps coins just for registering, therefore providing a factor to attempt their hands at any variety of gambling establishment games for a chance to win - or lose - genuine money.

So why are sweepstakes sites allowed to operate in 48 states, while online gambling establishments are banned in all but 7?

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

'Social sweepstakes video games are just a kind 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 need to pay for a chance to win rewards. That lack of a purchase requirement - or" factor to consider" - is an important distinction between social sweeps and traditional online gaming websites like casinos.'

Consider the manner in which McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and fries that offer them the chance to win lucrative prizes, such as a $1 million prize.

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

'Sweepstakes are an enduring method for promoting all type of everyday companies in the United States, whatever from hamburgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

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

'They do not last forever and they're normally not connected to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [casinos] have none of the qualities commonly associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, generally 80 percent or more of earnings, whereas the normal payment percentage for a temporary marketing sweepstakes is a trivial share of the income made by the company [typically less than one percent]'

Wallach is quick to liken the online social sweeps casinos to the web coffee shops that sprang up in Florida, using clients the chance to play casino-style video games for genuine rewards. A lot of those brick-and-mortar facilities have actually since been shuttered over accusations of unlawful sports betting.

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

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

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have consistently been mentioned by courts and state chief law officer as crucial consider determining that a sweepstakes promo was in reality a guise for unlawful gambling.'

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

'Consumers are being deprived of protections and states are giving up substantial tax and profits chances as this gaming replaces that performed through managed channels,' checked out a well-circulated AGA memo.

And then there are the plaintiffs who have taken legal action against social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 different cases in Kentucky without admitting any wrongdoing, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal expenses and continued lawsuits.

Michael Phelps has signed an offer with the VGW Group, which owns Global Poker

In the most current suit, which is mainly comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful sports betting enterprise. '

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

'We usually don't talk about matters before the courts,' a VGW representative told DailyMail.com through email. 'However, we keep in mind that this claim has only simply been submitted with the court and VGW has actually not been officially served.

'We have full self-confidence in our compliance with all laws and policies where we operate, and stay positive about the future,' the representative continued. 'We continue to use our free-to-play video games across the majority of North America, as we have for more than a years, developing not just great video games, user experiences and entertainment, but likewise ensuring this is done safely, properly and at the greatest level of standards.

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

The problems in between standard online sports betting and sweepstakes gambling establishments might show bothersome for some celebrity endorsers.

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

'It's ironic that professional athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues want to forecast a strong position against prohibited gambling - especially when attempting to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter got a lifetime restriction from the NBA over claims 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 demanded hosting presumably prohibited gambling websites

Regardless, Glaser sees sweepstakes casinos as a significant concern 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 spokesman nor the players' agents reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to react to DailyMail.com emails.

Asked if their celebrity endorsers have an obligation to describe to customers the differences and resemblances in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'Some of our values are" our players precede" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes sites, sees things in a different way.

'Celebrities who lend their names to shady prohibited gaming sites are, at a minimum, putting their reputations at danger in addition to courting civil and class actions by customers who declare harm,' Glaser said. 'There is also some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for assisting in illegal sports betting.'

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