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 conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the controversial websites using both complimentary 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 anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.


The sites are just 2 cogs in the multibillion-dollar industry that now finds itself besieged by claims. In the eyes of lots of gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes casinos serve as conventional gambling establishments, only without the oversight, consumer securities and tax laws. So not only can they avoid the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulative difficulties like anti-money laundering and responsible-gaming protections.


One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the business faces accusations of unlawful sports betting in a New york city suit that declares VGW uses star endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration below)


'I'm unsure" if you do not trust us, you can trust 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 presenter, Howard Glaser of 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, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between standard gaming and sweepstakes play.


Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments found online


Ryan Seacrest urges fans to play at Chumba Casino, where numerous - however not all - video games are complimentary


Drake has a handle social sweeps gambling establishment, Stake, that he routinely touts on social networks


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Instead, advertisements usually focus around the social aspect of the casinos, while omitting the capacity for real sports betting losses.


Others lure consumers with pledges of rewards. One such operator, Stake, ran a social networks advertisement displaying Drake's cars, planes and estates before pivoting to video footage of the rapper playing online casino-style video games.




'Daddy, why do we have a lot cash?' check out the first caption on the screen.


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


The disparity between sports betting websites and social or sweepstakes gambling establishments is a bit intricate, however operators of the latter insist they're not included with the former.


A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA information, most of the players on social-sweepstakes casinos are playing for free.


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


Social gambling establishments use customers a chance to play casino-style games with friends. Players have the alternative to buy worthless currency often referred to as 'gold coins,' which can not be exchanged genuine money, but can be used to open numerous features within the games.


But within the world of social casinos exists sweepstakes video gaming, enabling customers to obtain other currency known as 'sweeps coins' that can be exchanged for money or other rewards.


And therein lies the potential for financial losses, like the ones declared 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 casinos in the previous year after continuing to purchase more coins in pursuit of money and other things of value.


The Philadelphia 76ers' Paul George is seen promoting a Global Poker occasion


Social sweeps casino Stake ran an ad displaying Drake's automobiles, aircrafts and estates


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 seven states, which has assisted to fuel the popularity of sweepstakes gambling establishments.


Anyone over the age of 18 can access the sweepstakes websites, which do not need generally require recognition. However, websites like Chumba will ask for IDs from players attempting to withdraw any funds.


Many sites, like the crypto-compatible Stake, permit consumers to submit mail-in ask for complimentary sweeps coins, supplied the players follow painfully particular directions. What's more, gamers are frequently rewarded with sweeps coins merely for signing up, therefore providing them a reason to try their hands at any number of casino games for a chance to win - or lose - genuine cash.


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


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


'Social sweepstakes video games are simply a form of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is required to dip into social casinos with sweepstakes rewards. Consumers never need to pay for an opportunity to win rewards. That lack of a purchase requirement - or" factor to consider" - is an important difference between social sweeps and traditional online gambling websites like gambling establishments.'


Think of the method that McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and french fries that provide them the chance to win financially rewarding prizes, such as a $1 million jackpot.


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


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


But to many sports betting market experts, that argument doesn't cut it.


For beginners, gaming attorney Daniel Wallach points out, McDonald's Monopoly game does not run forever. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote real items like french fries, shakes, and the Filet-O-Fish.


'They don't last permanently and they're generally not connected to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're simply money giveaways.


'The sweepstakes [gambling establishments] possess none of the characteristics typically associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payouts, usually 80 percent or more of incomes, whereas the typical payment percentage for a temporary promotional sweepstakes is a trivial share of the earnings made by the company [generally less than one percent]'


Wallach is quick to liken the online social sweeps casinos to the web coffee shops that sprang up in Florida, offering consumers the possibility to play casino-style games for real prizes. A number of those brick-and-mortar establishments have considering that been shuttered over allegations of illegal gaming.


DJ Khaled is among numerous star spokespeople for VGW's Global Poker brand name


Now, Wallach argues, social sweeps casinos need to deal with similar scrutiny.


'These distinctions are not arbitrary,' Wallach stated of social sweeps casinos. 'They have consistently been pointed out by courts and state attorney general of the United States as key aspects in determining that a sweepstakes promo was in fact a guise for unlawful gaming.'


Among the gambling establishment industry's leading trade companies, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, in some cases, enact new legislation on the issue.


'Consumers are being denied of protections and states are giving up substantial tax and earnings chances as this gambling replaces that performed through managed channels,' read a well-circulated AGA memo.


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


Sweepstakes gambling establishment operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal expenses and continued lawsuits.


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


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


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


'We usually do not talk about matters before the courts,' a VGW representative told DailyMail.com through e-mail. 'However, we note that this claim has only simply been filed with the court and VGW has not been officially served.


'We have complete confidence in our compliance with all laws and policies where we run, and stay positive about the future,' the representative continued. 'We continue to use our free-to-play games across the majority of The United States and Canada, as we have for more than a years, developing not only great video games, user experiences and entertainment, but also guaranteeing this is done safely, properly and at the highest level of standards.


'More broadly, we 'd repeat that class actions and other litigations and arbitrations are fairly 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 standard online sports betting and sweepstakes gambling establishments might prove problematic for some celeb 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 conventional gaming titans like FanDuel and DraftKings.


'It's ironic that professional athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the exact same time the leagues desire to forecast a strong stance against illegal sports betting - especially when attempting to tamp down the periodic gambling scandal,' Glaser informed DailyMail.com.


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


Along with VGW, Apple and Google are being demanded hosting allegedly unlawful gambling sites


Regardless, Glaser sees sweepstakes gambling establishments as a significant problem for leagues such as the NBA.


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


Neither an NBA spokesperson nor the gamers' representatives responded to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to respond to DailyMail.com emails.


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


'We have full confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the spokesperson said. '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 challenger of sweepstakes sites, sees things differently.


'Celebrities who provide their names to dubious unlawful sports betting websites are, at a minimum, putting their reputations at threat as well as courting civil and class actions by customers who declare damage,' Glaser stated. 'There is also some danger that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for facilitating prohibited sports betting.'


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