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

No, they weren't personally in attendance, however the world-famous stars were notably included in a slide discussion on social and sweepstakes gambling establishments - the questionable websites providing both totally free casino-style video games and rewarding prizes, such as money, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by claims. In the eyes of numerous gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes gambling establishments function as traditional casinos, just without the oversight, customer defenses and tax laws. So not only can they prevent the steep 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulative obstacles like anti-money laundering and responsible-gaming protections.
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One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the company faces accusations of prohibited sports betting in a New york city suit that claims VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its product. (See VGW's declaration listed below)

'I'm unsure" if you don't trust us, you can rely on Paris Hilton" is a winning message for companies running 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 variety 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 in between standard sports betting and sweepstakes play.

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

Ryan Seacrest urges fans to dip into Chumba Casino, where many - however not all - games are free

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

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Instead, ads normally focus around the social element of the casinos, while leaving out the potential for actual sports betting losses.

Others tempt customers with promises of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's cars and trucks, planes and mansions before pivoting to footage of the rapper playing online casino-style video games.

'Daddy, why do we have a lot money?' read the first caption on the screen.

Another caption described: 'Because I never quit.'

The inconsistency between gambling sites and social or sweepstakes gambling establishments is a bit complex, but 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), discussed its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, most of the players on social-sweepstakes gambling establishments are playing for complimentary.

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

Social gambling establishments use consumers a chance to play casino-style video games with buddies. Players have the choice to buy valueless currency typically referred to as 'gold coins,' which can not be exchanged genuine money, but can be utilized to open numerous features within the video games.

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

And therein lies the capacity for financial losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York City. One gamer told 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 worth.

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

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

Karl-Anthony Towns of the New York Knicks is another NBA star plugging VGW's Global Poker
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Traditional online casinos are prohibited in all however 7 states, which has actually helped to sustain the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, allow customers to send mail-in ask for complimentary sweeps coins, supplied the players follow painfully particular instructions. What's more, gamers are typically rewarded with sweeps coins just for registering, thus offering them a factor to try their hands at any variety of gambling establishment games for an opportunity to win - or lose - real cash.

So why are sweepstakes sites enabled to run in 48 states, while online casinos are prohibited in all but 7?

According to the stakeholders, their product is the complimentary casino-style video gaming, and the real-stakes competitors is merely a way of promoting their support.

'Social sweepstakes video games are merely a type of online home entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never ever need to pay for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is an important distinction in between social sweeps and standard online gambling sites like gambling establishments.'

Think about 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 french fries that provide them the opportunity to win profitable rewards, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the game itself doesn't meet the meaning of sports betting in the US.

'Sweepstakes are an enduring technique for promoting all kinds of daily services in the United States, everything from burgers to magazine memberships to coffee and home enhancement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, video gaming attorney Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct beginning and end, therefore suggesting the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're typically not tied to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [casinos] have none of the characteristics frequently connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payouts, usually 80 percent or more of earnings, whereas the normal payment percentage for a momentary marketing sweepstakes is an insignificant share of the profits earned by the company [generally less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the internet coffee shops that sprang up in Florida, offering consumers the opportunity to play casino-style games for genuine rewards. A lot of those brick-and-mortar establishments have actually since been shuttered over accusations of prohibited gaming.

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

Now, Wallach argues, social sweeps casinos should deal with comparable analysis.

'These distinctions are not approximate,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been cited by courts and state attorney generals as key factors in determining that a sweepstakes promotion was in reality 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, in some cases, enact new legislation on the problem.

'Consumers are being deprived of defenses and states are forgoing substantial tax and income opportunities as this gaming replaces that performed through regulated channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have actually sued social gambling establishments in more than a dozen 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 consented to pay $11.75 million in one class-action claim, stating the settlement was made to avoid legal expenses and continued lawsuits.

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

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

Apple and Google have likewise been named as defendants in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's request for remark.

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

'We have complete self-confidence in our compliance with all laws and regulations where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play games across the majority of North America, as we have for more than a years, producing not just fantastic games, user experiences and home entertainment, but likewise ensuring this is done securely, responsibly and at the greatest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly typical across the online social video games market (and the US more broadly), and our standard practice is that we mean to strongly defend any claim which may be brought against us.'

The issues in between standard online gaming and sweepstakes gambling establishments could show troublesome for some celebrity endorsers.

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

'It's ironic that professional athletes are hawking illegal sports betting 'sweeps' sites while at the very same time the leagues wish to project a strong stance versus illegal gaming - especially when trying to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes gambling establishments.

Together with VGW, Apple and Google are being demanded hosting apparently illegal gambling sites

Regardless, Glaser sees sweepstakes casinos as a major concern 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 spokesperson nor the gamers' agents responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to react to DailyMail.com emails.

Asked if their star endorsers have a duty to explain to customers the differences and resemblances between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.
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'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'Some of our values are" our players come first" 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.

'Celebrities who provide their names to dubious unlawful gaming websites are, at a minimum, putting their reputations at threat as well as courting civil and class actions by customers who declare harm,' Glaser said. 'There is also some threat that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in unlawful gaming.'

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