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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 unlawful gaming.

No, they weren't personally in presence, but the world-famous stars were notably consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites providing both complimentary casino-style video games and profitable rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply two cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of numerous video gaming corporations, not to discuss suit complainants and state regulators, sweepstakes gambling establishments serve as conventional gambling establishments, only without the oversight, customer securities and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulatory hurdles 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 company faces allegations of illegal sports betting in a New york city lawsuit that claims VGW uses celeb endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's statement below)

'I'm uncertain" if you do not trust us, you can rely on Paris Hilton" is a winning message for companies operating 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, told DailyMail.com.

Sweepstakes endorsers consist of a variety of stars from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom use any differences between conventional gambling and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where numerous - but not all - games are free

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

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Instead, ads usually center around the social element of the casinos, while omitting the capacity for real sports betting losses.

Others lure consumers with promises of prizes. One such operator, Stake, ran a social networks advertisement flaunting Drake's cars, aircrafts and mansions before rotating to video footage of the rapper playing online casino-style games.

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

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

The discrepancy between gambling sites and social or sweepstakes gambling establishments is a bit intricate, but 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), 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 casinos are sports betting totally free.

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

Social casinos offer consumers a chance to play casino-style video games with buddies. Players have the option to buy worthless currency typically described as 'gold coins,' which can not be exchanged for real cash, but can be utilized to unlock different functions within the video games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to acquire other currency called 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for monetary losses, like the ones claimed by complainants 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 previous year after continuing to purchase more coins in pursuit of cash and other things of value.

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

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

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

Traditional online casinos are banned in all however 7 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 require typically require recognition. However, sites like Chumba will request for IDs from players trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable consumers to submit mail-in requests for totally free sweeps coins, provided the gamers follow painfully particular guidelines. What's more, players are frequently rewarded with sweeps coins just for signing up, thus offering them a factor to try their hands at any variety of casino games for a possibility to win - or lose - real money.

So why are sweepstakes websites permitted to run in 48 states, while online casinos are banned in all but 7?

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

'Social sweepstakes video games are merely a kind of online home entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed 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 a crucial difference in between social sweeps and traditional online gaming websites like gambling establishments.'

Think about the manner in which McDonald's utilizes its annual Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that use them the chance to win lucrative rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the game itself does not meet the meaning of gaming in the US.

'Sweepstakes are a long-standing method for promoting all type of daily businesses in the United States, everything from burgers to magazine subscriptions to coffee and home enhancement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are routinely used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of sports betting market experts, that argument does not cut it.

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

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

'The sweepstakes [gambling establishments] possess none of the characteristics typically connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payments, typically 80 percent or more of profits, whereas the normal payout percentage for a momentary advertising sweepstakes is a minor share of the profits earned by the company [usually less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the web cafes that emerged in Florida, using customers the chance to play casino-style games for genuine prizes. A number of those brick-and-mortar facilities have actually considering that been shuttered over allegations of illegal gaming.

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

Now, Wallach argues, social sweeps gambling establishments ought to deal with comparable scrutiny.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state chief law officer as essential consider identifying that a sweepstakes promotion was in reality a guise for unlawful sports betting.'

One of the casino market's leading trade companies, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, sometimes, enact brand-new legislation on the issue.

'Consumers are being denied of protections and states are forgoing substantial tax and profits opportunities as this gaming changes that performed through managed channels,' read a well-circulated AGA memo.

And after that there are the complainants who have actually taken legal action against social casinos in more than a lots states.

Sweepstakes casino operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal costs and continued litigation.

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

In the most current suit, which is largely similar to its predecessors, New York state homeowners 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 'prohibited gambling business. '

Apple and Google have also been named as offenders in claims for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's request for remark.

'We normally don't talk about matters before the courts,' a VGW representative informed DailyMail.com through e-mail. '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 confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games throughout many of North America, as we have for more than a decade, creating not just great games, user experiences and home entertainment, however also ensuring this is done securely, properly and at the highest level of requirements.

'More broadly, we 'd reiterate 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 standard practice is that we plan to strongly safeguard any claim which might be brought against us.'

The problems in between conventional online gaming and sweepstakes gambling establishments could show troublesome for some celeb 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 standard gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' websites while at the very same time the leagues wish to forecast a strong position versus prohibited gambling - particularly when trying to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

It was just eight 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 to anything involving social or sweepstakes casinos.

In addition to VGW, Apple and Google are being demanded hosting apparently prohibited gambling websites

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

'I 'd anticipate that a league crackdown on athletes backing sweepstakes websites is a matter of when, not if,' Glaser added.

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 also overlooked to react to DailyMail.com e-mails.

Asked if their star endorsers have a responsibility to discuss to clients the differences and similarities between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the representative said. 'A few of our worths 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 challenger of sweepstakes websites, sees things in a different way.
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'Celebrities who lend their names to shady prohibited gaming sites are, at a minimum, putting their reputations at threat along with courting civil and class actions by customers who allege damage,' Glaser stated. 'There is likewise some risk that state regulators and state chief law officers rope star endorsers into enforcement efforts for facilitating prohibited gambling.'

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