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

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

The websites are simply 2 cogs in the multibillion-dollar market that now discovers itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to mention lawsuit plaintiffs and state regulators, sweepstakes casinos function as standard casinos, only without the oversight, customer protections and tax laws. So not only can they prevent the steep 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming defenses.
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One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits in 2015 alone. Now the business deals with accusations of unlawful gaming in a New York lawsuit that claims VGW utilizes star endorsers to 'produce a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm uncertain" if you don't trust us, you can trust 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 gaming corporation Light & Wonder, informed DailyMail.com.
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Sweepstakes endorsers consist of a variety of celebs from sports betting lovers 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 conventional sports betting and sweepstakes play.

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

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

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

Find out more
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Instead, ads usually center around the social aspect of the casinos, while leaving out the capacity for actual gambling losses.

Others tempt clients with promises of rewards. One such operator, Stake, ran a social networks advertisement flaunting Drake's vehicles, airplanes and estates before pivoting to footage of the rapper playing online casino-style games.

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

Another caption described: 'Because I never ever provided up.'

The discrepancy between gambling websites and social or sweepstakes gambling establishments is a bit complex, but operators of the latter insist they're not included with the former.

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, the majority of the players on social-sweepstakes casinos are playing for free.

'Most social sweeps customers never buy,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients 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 provide clients a chance to play casino-style games with good friends. Players have the option to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be used to unlock different functions within the video games.

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

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 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 event

Social sweeps casino Stake ran an advertisement flaunting Drake's vehicles, aircrafts and mansions

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

Traditional online casinos are banned in all but seven states, which has helped to fuel the popularity of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, allow customers to send mail-in ask for complimentary sweeps coins, provided the gamers follow painfully specific guidelines. What's more, gamers are frequently rewarded with sweeps coins simply for registering, thereby providing a reason to try their hands at any variety of casino video games for a possibility to win - or lose - genuine money.

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

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

'Social sweepstakes games are simply a form of online home entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never ever have to pay for a chance to win rewards. That absence of a purchase requirement - or" factor to consider" - is a vital difference in between social sweeps and conventional online sports betting sites like casinos.'

Consider the manner in which McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and french fries that use them the chance to win rewarding prizes, such as a $1 million prize.
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And without a purchase requirement, or 'factor to consider', the game itself does not satisfy the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all type of daily businesses in the United States, everything from hamburgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting market insiders, that argument doesn't cut it.

For beginners, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a distinct start and end, thereby recommending the sweepstakes is not the fast-food giant's main item. 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 typically not connected to casino-style games of chance,' Wallach informed DailyMail.com. 'They're just money free gifts.
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'The sweepstakes [gambling establishments] possess none of the qualities commonly connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payouts, usually 80 percent or more of incomes, whereas the common payout percentage for a momentary advertising sweepstakes is an insignificant share of the profits made by the company [typically less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the internet coffee shops that sprang up in Florida, providing consumers the chance to play casino-style video games for real prizes. A number of those brick-and-mortar facilities have actually given that been shuttered over claims of unlawful gambling.

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

Now, Wallach argues, social sweeps casinos should deal with comparable analysis.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been mentioned by courts and state chief law officer as essential elements in figuring out that a sweepstakes promo remained in fact a guise for illegal gambling.'

Among the casino industry's leading trade organizations, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, sometimes, enact new legislation on the concern.

'Consumers are being denied of defenses and states are giving up substantial tax and revenue opportunities as this gambling changes that conducted through controlled channels,' read a memo.

And after that there are the plaintiffs who have sued social gambling establishments in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal expenses and continued lawsuits.

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

In the latest claim, which is largely similar to its predecessors, New york city state locals 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 'unlawful sports betting enterprise. '

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

'We normally do not talk about matters before the courts,' a VGW spokesperson told DailyMail.com via e-mail. 'However, we note that this claim has actually only simply been filed with the court and VGW has actually not been officially served.

'We have complete confidence in our compliance with all laws and regulations where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to use our free-to-play games throughout the majority of North America, as we have for more than a years, developing not only great video games, user experiences and home entertainment, but likewise guaranteeing this is done securely, properly and at the greatest level of standards.

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

The issues between standard online sports betting and sweepstakes casinos might prove problematic for some celebrity 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 standard gaming titans like FanDuel and DraftKings.
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'It's ironic that expert athletes are hawking illegal sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to forecast a strong position versus unlawful gaming - especially when attempting to tamp down the occasional sports betting scandal,' Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a lifetime restriction from the NBA over claims 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 demanded hosting apparently unlawful 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 backing sweepstakes websites refers when, not if,' Glaser added.

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

Asked if their star endorsers have an obligation to describe to clients the distinctions and resemblances in between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the representative stated. 'A few of our values are" our gamers precede" and" we do what's right", and we put our worths at the core of whatever we do.'

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

'Celebrities who lend their names to shady prohibited sports betting sites are, at a minimum, putting their reputations at risk along with courting civil and class actions by consumers who allege damage,' Glaser said. 'There is likewise some threat that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for helping with prohibited gambling.'

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