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

No, they weren't personally in attendance, but the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the controversial websites providing both totally free casino-style games and lucrative rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for complimentary,' 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 market that now discovers itself besieged by suits. In the eyes of numerous gaming corporations, not to mention lawsuit complainants and state regulators, sweepstakes casinos act as conventional casinos, just without the oversight, consumer defenses and tax laws. So not just can they avoid the high 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with allegations of illegal gambling in a New York claim that claims VGW utilizes celeb endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's statement listed below)

'I'm not exactly sure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies running multibillion-dollar illegal operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of stars from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between traditional gaming and sweepstakes play.

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

Ryan Seacrest urges fans to play at Chumba Casino, where lots of - but not all - games are free

Drake has a deal with social sweeps casino, Stake, that he regularly promotes on social media

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

Others lure customers with promises of rewards. One such operator, Stake, ran a social media advertisement flaunting Drake's automobiles, aircrafts and estates before rotating to video footage of the rapper playing online casino-style games.

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

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

The disparity between gaming sites and social or sweepstakes casinos is a bit complex, however operators of the latter insist they're not included with the former.

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

'Most social sweeps customers never ever make a purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller sized than the normal deposit or bet size at real-money online gambling sites.'

Social gambling establishments offer customers an opportunity to play casino-style games with buddies. Players have the option to buy worthless currency often referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be utilized to open various functions within the video games.

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

And therein lies the potential for financial losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York City. One player informed 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 value.

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

Social sweeps casino Stake ran an ad displaying Drake's cars and trucks, planes and mansions

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

Traditional online gambling establishments are banned in all however seven states, which has helped to sustain the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which don't need typically need recognition. However, websites like Chumba will ask for IDs from players trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable consumers to submit mail-in requests for complimentary sweeps coins, supplied the gamers follow painfully particular instructions. What's more, players are frequently rewarded with sweeps coins merely for registering, therefore offering them a reason to try their hands at any number of casino video games for a chance to win - or lose - real money.

So why are sweepstakes sites allowed to run in 48 states, while online casinos are banned in all however 7?

According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competitors is simply a method of promoting their bread and butter.

'Social sweepstakes video games are merely a type of online home entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never have to pay for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is a crucial distinction between social sweeps and traditional online gambling sites like gambling establishments.'

Consider the way that McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and french fries that provide them the opportunity to win profitable rewards, such as a $1 million jackpot.

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

'Sweepstakes are an enduring technique for promoting all kinds of everyday businesses in the United States, everything from burgers to publication subscriptions to coffee and home improvement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are regularly used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market insiders, that argument does not cut it.

For starters, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a well-defined start and end, consequently suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote real products like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're typically not connected to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the characteristics frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments provide" casino-like" payments, usually 80 percent or more of earnings, whereas the normal payout percentage for a temporary promotional sweepstakes is a minor share of the profits earned by the company [generally less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the web coffee shops that emerged in Florida, offering consumers the opportunity to play casino-style video games for genuine prizes. A lot of those brick-and-mortar establishments have actually considering that been shuttered over allegations of prohibited gambling.

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

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

'These differences are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have repeatedly been cited by courts and state attorney general of the United States as key aspects in figuring out that a sweepstakes promo remained in reality a guise for illegal gambling.'

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

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

And then there are the complainants who have actually taken legal action against social gambling establishments in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal expenses and continued litigation.

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

In the most recent lawsuit, which is largely comparable to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'illegal gaming enterprise. '

Apple and Google have also been called as accuseds in claims for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's demand for comment.

'We typically don't discuss matters before the courts,' a VGW representative informed DailyMail.com via email. 'However, we note that this claim has actually only just been submitted with the court and VGW has not been officially served.

'We have complete self-confidence in our compliance with all laws and guidelines where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to offer our free-to-play games throughout most of The United States and Canada, as we have for more than a decade, producing not only terrific games, user experiences and entertainment, but likewise ensuring this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly common throughout the online social games industry (and the US more broadly), and our standard practice is that we mean to vigorously defend any claim which may be brought versus us.'

The problems in between standard online sports betting and sweepstakes gambling establishments might prove problematic for some star 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 paradoxical that professional athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues wish to predict a strong position against unlawful gaming - especially when attempting to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

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

In addition to VGW, Apple and Google are being demanded hosting presumably unlawful sports betting websites

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

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

Neither an NBA spokesman 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 react to DailyMail.com e-mails.

Asked if their star endorsers have a responsibility to describe to consumers the differences and similarities between iGaming and sweepstakes casinos, 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 company practices more broadly,' the spokesperson stated. '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 opponent of sweepstakes sites, sees things differently.

'Celebrities who provide their names to shady unlawful gaming websites are, at a minimum, putting their credibilities at risk as well as courting civil and class actions by consumers who allege harm,' Glaser said. 'There is also some danger that state regulators and state attorneys basic rope celeb endorsers into enforcement efforts for facilitating prohibited gaming.'

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