
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 presence, however the world-famous stars were conspicuously included in a slide discussion on social and sweepstakes casinos - the controversial sites offering both totally free casino-style games and lucrative prizes, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply two cogs in the multibillion-dollar industry that now finds itself besieged by suits. In the eyes of numerous video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments serve as traditional casinos, only without the oversight, customer defenses and tax laws. So not just can they avoid the high 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming securities.
One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company deals with accusations of illegal gambling in a New york city claim that claims VGW uses star endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's statement below)
'I'm not sure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.
Sweepstakes endorsers include a variety of celebs from sports betting lovers 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 standard gambling and sweepstakes play.
Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes gambling establishments found online
Ryan Seacrest advises fans to dip into Chumba Casino, where numerous - but not all - video games are complimentary
Drake has a handle social sweeps gambling establishment, Stake, that he routinely promotes on social media
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Instead, ads typically focus around the social aspect of the casinos, while leaving out the capacity for actual gambling losses.
Others lure consumers with promises of rewards. One such operator, Stake, ran a social networks advertisement revealing off Drake's vehicles, aircrafts and mansions before pivoting to footage of the rapper playing online casino-style video games.
'Daddy, why do we have so much cash?' read the very first caption on the screen.
Another caption discussed: 'Because I never ever quit.'
The discrepancy in between gambling sites and social or sweepstakes casinos is a bit complex, but 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), explained its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, many of the gamers on social-sweepstakes casinos are sports betting free.
'Most social sweeps clients never purchase,' the SPGA representative told DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the normal deposit or wager size at real-money online gambling sites.'
Social gambling establishments use consumers a possibility to play casino-style video games with buddies. Players have the choice to purchase valueless currency often described as 'gold coins,' which can not be exchanged for real cash, however can be utilized to unlock different functions within the video games.
But within the world of social gambling establishments exists sweepstakes video gaming, permitting customers to obtain other currency referred to as 'sweeps coins' that can be exchanged for money or other rewards.
And therein lies the capacity for financial losses, like the ones claimed by plaintiffs 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 worth.
The Philadelphia 76ers' Paul George is seen promoting an International Poker event
Social sweeps gambling establishment Stake ran an advertisement flaunting Drake's automobiles, 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 but seven states, which has actually helped to sustain the appeal of sweepstakes casinos.
Anyone over the age of 18 can access the sweepstakes sites, which don't need usually require recognition. However, websites like Chumba will ask for IDs from gamers trying to withdraw any funds.
Many websites, like the crypto-compatible Stake, permit clients to send mail-in ask for totally free sweeps coins, provided the gamers follow painfully specific guidelines. What's more, players are often rewarded with sweeps coins just for signing up, consequently providing a factor to attempt their hands at any variety of casino games for a chance to win - or lose - real cash.
So why are sweepstakes sites enabled to operate in 48 states, while online casinos are banned in all however 7?
According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competition is just a method of promoting their bread and butter.

'Social sweepstakes games are merely a form of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never ever have to spend for a chance to win rewards. That lack of a purchase requirement - or" consideration" - is an important distinction between social sweeps and conventional online gaming websites like casinos.'
Think of the method that McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and french fries that provide them the opportunity to win profitable rewards, such as a $1 million prize.
And without a purchase requirement, or 'factor to consider', the game itself does not satisfy the definition of gaming in the US.
'Sweepstakes are a long-standing method for promoting all sort of daily services in the United States, everything from burgers to magazine subscriptions to coffee and home enhancement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'
But to lots of sports betting market insiders, that argument doesn't cut it.
For beginners, gaming lawyer Daniel Wallach points out, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a well-defined beginning and end, therefore recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being utilized to promote real products like fries, shakes, and the Filet-O-Fish.
'They don't last permanently and they're typically not tied to casino-style video games of opportunity,' Wallach informed DailyMail.com. 'They're just cash giveaways.
'The sweepstakes [casinos] have none of the attributes commonly connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payouts, normally 80 percent or more of profits, whereas the typical payment portion for a momentary promotional sweepstakes is a trivial share of the earnings made by the company [typically less than one percent]'
Wallach is quick to compare the online social sweeps casinos to the web cafes that sprang up in Florida, offering clients the opportunity to play casino-style games for genuine rewards. A number of those brick-and-mortar facilities have given that been shuttered over accusations of illegal gaming.
DJ Khaled is amongst several celebrity spokespeople for VGW's Global Poker brand name
Now, Wallach argues, social sweeps casinos need to face comparable examination.
'These distinctions are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have actually repeatedly been mentioned by courts and state attorney generals as crucial elements in figuring out that a sweepstakes promotion remained in reality a guise for prohibited gambling.'
One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, sometimes, enact brand-new legislation on the concern.
'Consumers are being deprived of defenses and states are forgoing considerable tax and profits opportunities as this sports betting changes that performed through controlled channels,' checked out a well-circulated AGA memo.
And then there are the complainants who have sued social casinos in more than a lots states.
Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, stating the settlement was made to avoid legal costs and continued litigation.
Michael Phelps has signed a handle the VGW Group, which owns Global Poker
In the most recent claim, which is mainly similar to its predecessors, New York state locals Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is described in the filing as an 'illegal gambling business. '
Apple and Google have likewise been named as accuseds in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for comment.
'We usually do not talk about matters before the courts,' a VGW representative informed DailyMail.com via e-mail. '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 run, and stay confident about the future,' the spokesperson continued. 'We continue to use our free-to-play games across most of North America, as we have for more than a years, creating not just great games, user experiences and home entertainment, however also guaranteeing this is done safely, properly and at the highest level of standards.
'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are relatively common throughout the online social video games industry (and the US more broadly), and our basic practice is that we mean to vigorously protect any claim which may be brought versus us.'
The problems between standard online sports betting and sweepstakes gambling establishments could prove problematic for some star endorsers.
Towns, a star center with the Knicks, and the 76ers' George both back VGW's Global Poker brand name while the NBA is partnered with traditional video gaming titans like FanDuel and DraftKings.
'It's paradoxical that expert athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the very same time the leagues wish to predict a strong stance versus prohibited sports betting - especially when trying to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.
It was just 8 months ago that Toronto Raptors forward Jontay Porter got a life time restriction from the NBA over claims he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything including 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 issue for leagues such as the NBA.
'I 'd anticipate that a league crackdown on professional athletes backing sweepstakes sites is a matter of when, not if,' Glaser included.
Neither an NBA representative 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 overlooked to react to DailyMail.com emails.
Asked if their star endorsers have an obligation to discuss to clients the distinctions and similarities between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that needs to be done.
'We have complete confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the representative stated. 'Some of our worths are" our gamers come initially" and" we do what's right", and we put our values at the core of whatever we do.'
Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.

'Celebrities who provide their names to shady unlawful gaming websites are, at a minimum, putting their track records at danger along with courting civil and class actions by customers who declare harm,' Glaser stated. 'There is also some threat that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in illegal sports betting.'
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