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 participation, however the world-famous celebrities were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the controversial websites providing both free casino-style games and profitable rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet 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 industry that now discovers itself besieged by lawsuits. In the eyes of many gaming corporations, not to point out claim complainants and state regulators, sweepstakes gambling establishments function as standard casinos, just without the oversight, consumer securities and tax laws. So not only can they avoid the steep 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulative hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings in 2015 alone. Now the business deals with allegations of prohibited sports betting in a New York claim that claims VGW utilizes celeb endorsers to 'create a veneer of legitimacy' around its product. (See VGW's statement listed below)

'I'm unsure" 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 video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a variety of celebrities from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences between standard sports betting and sweepstakes play.

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

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

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

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Instead, advertisements normally center around the social element of the gambling establishments, while leaving out the capacity for real gambling losses.

Others tempt consumers with guarantees of prizes. One such operator, Stake, ran a social media ad flaunting Drake's vehicles, planes and estates before rotating to video of the rap artist playing online casino-style games.

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

Another caption explained: 'Because I never quit.'

The inconsistency in between gaming sites and social or sweepstakes casinos is a bit complex, however operators of the latter insist they're not involved with the previous.

A spokesperson for a market 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 data, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.

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

Social gambling establishments use customers a chance to play casino-style video games with friends. Players have the option to purchase valueless currency often described as 'gold coins,' which can not be exchanged genuine cash, however can be utilized to open different functions within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting consumers to acquire other currency referred to as 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the potential for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York. One player told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past year after continuing to purchase more coins in pursuit of money and other things of worth.

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

Social sweeps casino Stake ran an advertisement showing off Drake's cars and trucks, planes 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 7 states, which has actually helped to sustain the popularity of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, permit clients to send mail-in requests for complimentary sweeps coins, offered the gamers follow painfully specific guidelines. What's more, players are frequently rewarded with sweeps coins merely for signing up, therefore providing a reason to attempt their hands at any number of casino games for a chance to win - or lose - genuine money.

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

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

'Social sweepstakes games are simply a type of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes prizes. Consumers never ever have to pay for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is a vital difference between social sweeps and traditional online gambling websites like casinos.'

Consider the manner in which McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and fries that use them the chance to win lucrative prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself doesn't fulfill the meaning of gambling in the US.

'Sweepstakes are an enduring approach for promoting all kinds of everyday companies in the United States, everything from burgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of family 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 video game doesn't run indefinitely. Rather, it has a well-defined start and end, consequently suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're typically not connected to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes frequently associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos offer" casino-like" payouts, usually 80 percent or more of incomes, whereas the common payout percentage for a momentary marketing sweepstakes is a trivial share of the revenue made by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, providing consumers the possibility to play casino-style games for genuine rewards. Many of those brick-and-mortar facilities have actually since been shuttered over accusations of prohibited gaming.

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

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

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have repeatedly been mentioned by courts and state attorney general of the United States as key consider determining that a sweepstakes promo was in reality a guise for illegal sports betting.'

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

'Consumers are being deprived of protections and states are giving up considerable tax and revenue opportunities as this gaming replaces that performed through controlled 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 dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, stating 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 newest suit, which is mostly similar to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gaming business. '

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

'We generally do not comment on matters before the courts,' a VGW spokesperson informed DailyMail.com through e-mail. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has not been officially served.

'We have full 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 video games across many of The United States and Canada, as we have for more than a decade, producing not just terrific video games, user experiences and entertainment, but likewise guaranteeing this is done safely, properly and at the highest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are relatively typical across the online social games industry (and the US more broadly), and our standard practice is that we intend to strongly protect any claim which may be brought against us.'

The issues between conventional online gaming and sweepstakes casinos could prove troublesome for some celebrity 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 ironic that professional athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the very same time the leagues wish to forecast a strong stance versus illegal sports betting - especially when trying to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter got a life time restriction from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes gambling establishments.

In addition to VGW, Apple and Google are being taken legal action against for hosting supposedly prohibited sports betting sites

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

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

Neither an NBA spokesperson nor the players' 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 emails.

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

'We have full confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the representative stated. 'Some of our worths are" our gamers precede" 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.

'Celebrities who provide their names to shady unlawful gaming sites are, at a minimum, putting their reputations at risk in addition to courting civil and class actions by consumers who allege harm,' Glaser stated. 'There is likewise some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for facilitating illegal gaming.'

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