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

No, they weren't personally in presence, but the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the controversial sites offering both free casino-style games and financially rewarding rewards, such as cash, 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 just two cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of numerous video gaming corporations, not to mention lawsuit complainants and state regulators, sweepstakes casinos act as standard casinos, only without the oversight, customer defenses 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 securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the business deals with allegations of illegal gaming in a New york city claim that claims VGW uses celeb endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's declaration listed below)
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'I'm unsure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar prohibited operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.
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Sweepstakes endorsers include a range of celebrities from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences in between standard gambling and sweepstakes play.

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

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

Drake has an offer with social sweeps gambling establishment, Stake, that he routinely touts on social networks

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Instead, ads usually focus around the social element of the casinos, while leaving out the potential for actual gaming losses.

Others tempt customers with promises of rewards. One such operator, Stake, ran a social networks advertisement revealing off Drake's automobiles, aircrafts and mansions before rotating to video of the rap artist playing online casino-style games.

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

Another caption explained: 'Because I never quit.'

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

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

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

Social casinos use customers an opportunity to play casino-style video games with pals. Players have the option to buy worthless currency frequently described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to open numerous functions within the games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing clients to obtain other currency understood 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 plaintiffs in Florida, Georgia, New Jersey and New York. 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 worth.

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

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

of the New York Knicks is another NBA star plugging VGW's Global Poker

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

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

Many websites, like the crypto-compatible Stake, allow consumers to send mail-in requests for free sweeps coins, supplied the players follow painfully particular directions. What's more, gamers are frequently rewarded with sweeps coins simply for registering, consequently providing a factor to try their hands at any number of casino video games for a chance to win - or lose - real cash.

So why are sweepstakes sites enabled to operate in 48 states, while online gambling establishments are banned in all however 7?
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According to the stakeholders, their item is the complimentary casino-style gaming, and the real-stakes competitors is just a way of promoting their bread and butter.

'Social sweepstakes games are just a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never need to spend for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an essential difference between social sweeps and standard online sports betting websites like casinos.'

Think about the manner in which McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and fries that provide them the opportunity to win rewarding rewards, such as a $1 million prize.

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

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

But to numerous sports betting industry insiders, that argument doesn't cut it.

For starters, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a well-defined start and end, consequently recommending the sweepstakes is not the fast-food giant's primary product. 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 typically not tied to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] have none of the attributes typically related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos use" casino-like" payments, normally 80 percent or more of incomes, whereas the typical payout portion for a short-term advertising sweepstakes is a trivial share of the revenue made by the business [normally less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the internet coffee shops that emerged in Florida, offering customers the opportunity to play casino-style games for genuine rewards. Much of those brick-and-mortar facilities have considering that been shuttered over claims of unlawful sports betting.

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

Now, Wallach argues, social sweeps casinos must deal with comparable scrutiny.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have repeatedly been pointed out by courts and state attorney generals as essential elements in figuring out that a sweepstakes promo remained in reality a guise for prohibited sports betting.'

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

'Consumers are being denied of securities and states are forgoing substantial tax and revenue opportunities as this gaming replaces that carried out through regulated channels,' checked out a well-circulated AGA memo.

And then there are the plaintiffs who have actually sued social gambling establishments in more than a lots states.

Sweepstakes casino operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action lawsuit, stating the settlement was made to avoid legal expenses and continued lawsuits.
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Michael Phelps has actually signed an offer with the VGW Group, which owns Global Poker

In the most recent claim, which is mainly comparable to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gambling business. '

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

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

'We have full confidence in our compliance with all laws and regulations where we operate, and stay confident about the future,' the representative continued. 'We continue to offer our free-to-play video games across many of The United States and Canada, as we have for more than a years, producing not only terrific games, user experiences and entertainment, however also ensuring this is done safely, responsibly and at the highest level of requirements.

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

The issues in between standard online gambling and sweepstakes casinos might show troublesome for some celeb endorsers.
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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 ironic that professional athletes are hawking unlawful sports betting 'sweeps' sites while at the exact same time the leagues want to predict a strong position against illegal sports betting - especially when attempting 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 lifetime ban from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes casinos.

In addition to VGW, Apple and Google are being sued for hosting supposedly prohibited sports betting sites

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

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

Neither an NBA spokesman nor the players' representatives responded to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also ignored to react to DailyMail.com e-mails.

Asked if their celeb endorsers have an obligation to discuss to customers the differences and resemblances in between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the spokesperson said. 'A few of our worths are" our players 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 sites, sees things differently.

'Celebrities who lend their names to dubious illegal gambling sites are, at a minimum, putting their track records at threat as well as courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some danger that state regulators and state attorneys basic rope celeb endorsers into enforcement efforts for assisting in prohibited sports betting.'

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