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

No, they weren't personally in participation, but the world-famous celebs were notably consisted of in a slide presentation on social and sweepstakes casinos - the controversial websites providing both totally free casino-style video games and profitable rewards, such as cash, gift cards or cryptocurrency. In one ad, 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.

The websites are just 2 cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of many video gaming corporations, not to mention suit plaintiffs and state regulators, sweepstakes casinos serve as standard casinos, only without the oversight, consumer securities and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, but 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 income last year alone. Now the company faces allegations of unlawful gaming in a New York lawsuit that declares VGW uses celebrity endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's declaration listed below)

'I'm uncertain" if you do not trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar unlawful operations out of locations 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 celebs from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences between standard gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes casinos found online
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Ryan Seacrest urges fans to play at Chumba Casino, where lots of - but not all - video games are totally free

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

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

Others tempt clients with guarantees of prizes. One such operator, Stake, ran a social networks ad displaying Drake's automobiles, airplanes and estates before rotating to video footage of the rapper playing online casino-style games.

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

Another caption discussed: 'Because I never ever gave up.'

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

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

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

Social gambling establishments provide consumers a chance to play casino-style games with friends. Players have the alternative to buy worthless currency frequently referred to as 'gold coins,' which can not be exchanged genuine money, however can be utilized to open different features within the games.

But within the world of social casinos exists sweepstakes gaming, enabling consumers to obtain other currency known as '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 player informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the past 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 Worldwide Poker occasion

Social sweeps gambling establishment Stake ran an advertisement revealing off Drake's automobiles, airplanes and mansions

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

Traditional online casinos are prohibited in all but 7 states, which has assisted to sustain the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which don't need typically need recognition. However, websites like Chumba will request for IDs from players 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 players follow painfully particular instructions. What's more, gamers are often rewarded with sweeps coins simply for signing up, consequently providing a reason to attempt their hands at any variety of gambling establishment video games for a chance to win - or lose - real money.

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

According to the stakeholders, their item is the totally free casino-style video gaming, and the real-stakes competitors is just a means of promoting their support.

'Social sweepstakes video games are just a type of online home entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never need to spend for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is a crucial distinction in between social sweeps and conventional online gambling sites like gambling establishments.'

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 buying hamburgers and french fries that provide them the chance to win rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the video game itself does not fulfill the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all kinds of everyday companies in the United States, whatever from burgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are regularly 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 insiders, that argument doesn't cut it.

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

'They do not last permanently and they're normally not connected to casino-style games of opportunity,' Wallach informed DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] possess none of the characteristics frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments offer" casino-like" payments, usually 80 percent or more of earnings, whereas the normal payment portion for a temporary promotional sweepstakes is a minor share of the income made by the company [generally less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the web coffee shops that sprang up in Florida, offering customers the opportunity to play casino-style video games for real rewards. Much of those brick-and-mortar facilities have considering that been shuttered over accusations of illegal sports betting.

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

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

'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have repeatedly been pointed out by courts and state chief law officer as key elements in figuring out that a sweepstakes promotion remained in fact a guise for unlawful sports betting.'

Among the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in many cases, enact brand-new legislation on the issue.

'Consumers are being denied of securities and states are giving up substantial tax and profits opportunities as this gambling changes that conducted through controlled channels,' read a well-circulated AGA memo.

And then there are the complainants who have 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 admitting any misbehavior, 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 costs and continued lawsuits.

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

In the current claim, which is mostly comparable to its predecessors, New york city state homeowners 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 'prohibited sports betting enterprise. '

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

'We generally don't talk about matters before the courts,' a VGW representative told DailyMail.com through email. 'However, we note that this claim has actually 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 regulations where we run, and stay positive about the future,' the spokesperson continued. 'We continue to use our free-to-play video games across most of North America, as we have for more than a years, creating not only terrific video games, user experiences and home entertainment, however likewise ensuring this is done securely, responsibly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are fairly typical across the online social games industry (and the US more broadly), and our basic practice is that we plan to intensely safeguard any claim which might be brought against us.'

The problems in between standard online gaming and sweepstakes casinos could prove troublesome for some celeb 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 paradoxical that expert athletes are hawking prohibited sports betting 'sweeps' websites while at the very same time the leagues want to predict a strong position versus unlawful sports betting - particularly when trying to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter received a life time restriction 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.

Along with VGW, Apple and Google are being demanded hosting supposedly prohibited sports betting websites

Regardless, Glaser sees sweepstakes gambling establishments as a major concern for leagues such as the NBA.
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'I 'd anticipate that a league crackdown on professional athletes backing sweepstakes sites is a matter of when, not if,' Glaser included.

Neither an NBA spokesperson nor the gamers' agents reacted to DailyMail.com's demands for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to respond to DailyMail.com e-mails.

Asked if their celebrity endorsers have an obligation to explain to consumers the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative said. 'A few of our values are" our players precede" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.
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'Celebrities who provide their names to shady prohibited gaming sites are, at a minimum, putting their reputations at danger along with courting civil and class actions by consumers who declare harm,' Glaser stated. 'There is also some risk that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for helping with prohibited sports betting.'

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