The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on unlawful 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 questionable sites providing both free casino-style games and financially rewarding prizes, such as cash, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.


The sites are simply two cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of numerous gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos act as conventional gambling establishments, just without the oversight, consumer defenses and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to 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 company faces accusations of illegal gambling in a New york city claim that claims VGW uses star endorsers to 'create a veneer of legitimacy' around its product. (See VGW's declaration listed below)


'I'm uncertain" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar unlawful 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 include a series of celebrities from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between standard gambling and sweepstakes play.


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


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


Drake has a deal with social sweeps casino, Stake, that he frequently touts on social media


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Instead, ads typically center around the social aspect of the casinos, while leaving out the capacity for actual sports betting losses.


Others lure customers with pledges of rewards. One such operator, Stake, ran a social networks advertisement showing off Drake's cars, airplanes and mansions before rotating to video of the rapper playing online casino-style video games.




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


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


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


A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes gambling establishments are sports betting free.


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


Social gambling establishments offer consumers a possibility to play casino-style video games with friends. Players have the choice to buy worthless currency typically referred to as 'gold coins,' which can not be exchanged genuine cash, however can be utilized to open different features within the games.


But within the world of social gambling establishments exists sweepstakes video gaming, allowing consumers to get other currency understood as 'sweeps coins' that can be exchanged for cash or other rewards.


And therein lies the potential for financial losses, like the ones claimed by plaintiffs 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 buy more coins in pursuit of cash and other things of worth.


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


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


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 actually helped to sustain the appeal of sweepstakes casinos.


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


Many websites, like the crypto-compatible Stake, enable consumers to send mail-in ask for free sweeps coins, supplied the players follow painfully specific instructions. What's more, gamers are often rewarded with sweeps coins simply for registering, therefore providing them a factor to try their hands at any number of casino video games for an opportunity to win - or lose - real money.


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 free casino-style video gaming, and the real-stakes competition is just a method of promoting their support.


'Social sweepstakes video games are simply a type of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never have to spend 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 sports betting sites like gambling establishments.'


Think about the way that McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and french fries that offer them the possibility to win lucrative rewards, such as a $1 million jackpot.


And without a purchase requirement, or 'consideration', the game itself does not meet the definition of sports betting in the US.


'Sweepstakes are a long-standing technique for promoting all sort of daily companies in the United States, everything from hamburgers to magazine subscriptions to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are frequently used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'


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


For starters, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run indefinitely. Rather, it has a distinct start and end, thereby recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real products like french fries, shakes, and the Filet-O-Fish.


'They do not last permanently and they're generally not connected to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're just money giveaways.


'The sweepstakes [casinos] possess none of the attributes commonly connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments provide" casino-like" payments, typically 80 percent or more of profits, whereas the normal payment portion for a momentary promotional sweepstakes is a trivial share of the earnings made by the company [normally 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 customers the possibility to play casino-style video games for genuine rewards. Much of those brick-and-mortar facilities have actually given that been shuttered over allegations of prohibited sports betting.


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


Now, Wallach argues, social sweeps gambling establishments should face similar examination.


'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been cited by courts and state lawyer generals as crucial consider figuring out that a sweepstakes promo remained in reality a guise for unlawful gambling.'


Among the gambling establishment market's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, sometimes, enact brand-new legislation on the problem.


'Consumers are being denied of protections and states are giving up significant tax and profits chances as this gaming changes that carried out through managed channels,' checked out a well-circulated AGA memo.


And then there are the plaintiffs who have actually taken legal action against social gambling establishments 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 accepted pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal costs and continued litigation.


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


In the most recent lawsuit, 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 'illegal gambling enterprise. '


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


'We generally do not talk about matters before the courts,' a VGW representative told DailyMail.com via e-mail. 'However, we keep in mind that this claim has actually only just been submitted with the court and VGW has actually not been officially served.


'We have complete confidence in our compliance with all laws and policies where we operate, and remain positive about the future,' the representative continued. 'We continue to provide our free-to-play video games across the majority of North America, as we have for more than a decade, producing not just excellent games, user experiences and entertainment, however also ensuring this is done safely, responsibly and at the greatest level of requirements.


'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly common across the online social video games industry (and the US more broadly), and our basic practice is that we mean to intensely defend any claim which might be brought against us.'


The problems in between conventional online sports betting and sweepstakes gambling establishments could prove bothersome 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 traditional video gaming titans like FanDuel and DraftKings.


'It's ironic that expert athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the very same time the leagues wish to project a strong stance against illegal sports betting - specifically when attempting to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.


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


Along with VGW, Apple and Google are being taken legal action against for hosting apparently unlawful gambling sites


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


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


Neither an NBA representative nor the gamers' agents reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to respond to DailyMail.com emails.


Asked if their celeb endorsers have an obligation to discuss to customers the differences and similarities 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 business practices more broadly,' the representative stated. 'Some of our values are" our gamers come initially" and" we do what's right", and we put our values at the core of everything we do.'


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


'Celebrities who lend their names to dubious unlawful sports betting sites are, at a minimum, putting their track records at risk as well as courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state lawyers general rope star endorsers into enforcement efforts for helping with illegal sports betting.'


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