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

No, they weren't personally in presence, but the world-famous stars were notably included in a slide discussion on social and sweepstakes gambling establishments - the controversial websites using both free casino-style video games and lucrative rewards, such as cash, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of many gaming corporations, not to mention suit plaintiffs and state regulators, sweepstakes gambling establishments serve as conventional gambling establishments, just without the oversight, consumer protections and tax laws. So not only can they avoid the steep 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the business deals with accusations of unlawful sports betting in a New York lawsuit that claims VGW utilizes celeb endorsers to 'produce a veneer of authenticity' around its product. (See VGW's declaration below)

'I'm not exactly sure" if you don't trust us, you can rely on 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, informed DailyMail.com.

Sweepstakes endorsers consist of a series 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 use any distinctions in between traditional gaming and sweepstakes play.

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

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

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

Find out more

Donald Trump 'set to call NBA group owner as US ambassador to Italy'

Instead, ads usually focus around the social element of the gambling establishments, while leaving out the potential for actual sports betting losses.

Others tempt clients with pledges of prizes. One such operator, Stake, ran a social networks advertisement flaunting Drake's vehicles, aircrafts and mansions before pivoting to video footage of the rapper playing online casino-style video games.

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

Another caption discussed: 'Because I never ever quit.'

The inconsistency in between gaming sites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not involved with the former.
bet9ja.com
A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes casinos are playing for complimentary.

'Most social sweeps customers never ever purchase,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller sized than the typical deposit or bet size at real-money online gambling sites.'

Social casinos use customers an opportunity to play casino-style games with friends. Players have the alternative to buy valueless currency typically described as 'gold coins,' which can not be exchanged genuine money, however can be used to unlock numerous functions within the video games.

But within the world of social casinos exists sweepstakes video gaming, permitting clients to get other currency understood as 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the capacity for financial losses, like the ones declared by complainants 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 cash and other things of worth.

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

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

Karl-Anthony Towns of the New York Knicks is another NBA star plugging VGW's Global Poker
bit.ly
Traditional online gambling establishments are prohibited in all but seven states, which has actually helped to fuel the appeal of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in requests for complimentary sweeps coins, offered the players follow painfully specific guidelines. What's more, gamers are often rewarded with sweeps coins simply for registering, consequently giving them a factor to attempt their hands at any variety of casino games for an opportunity to win - or lose - genuine cash.

So why are sweepstakes sites enabled to operate in 48 states, while online gambling establishments are banned in all however 7?

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

'Social sweepstakes video games are simply a type of online home entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to dip into social casinos with sweepstakes rewards. Consumers never ever need to pay for a chance to win prizes. That absence of a purchase requirement - or" factor to consider" - is a vital distinction between social sweeps and traditional online gambling websites like gambling establishments.'

Think about 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 fries that provide them the chance to win profitable rewards, such as a $1 million prize.

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

'Sweepstakes are a long-standing method for promoting all sort of everyday companies in the United States, everything from hamburgers to magazine memberships to coffee and home enhancement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market experts, that argument doesn't cut it.

For starters, gaming attorney Daniel Wallach mentions, McDonald's Monopoly video game doesn't run forever. Rather, it has a distinct start and end, thereby suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the .
bet9ja.com
'They don't last permanently and they're typically not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] possess none of the attributes commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos use" casino-like" payouts, generally 80 percent or more of revenues, whereas the normal payout portion for a short-lived promotional sweepstakes is a trivial share of the earnings made by the company [normally less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the web coffee shops that sprang up in Florida, providing clients the chance to play casino-style video games for real prizes. A lot of those brick-and-mortar facilities have actually because been shuttered over claims of prohibited sports betting.

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

Now, Wallach argues, social sweeps gambling establishments should face similar scrutiny.

'These distinctions are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually repeatedly been cited by courts and state attorney general of the United States as essential consider determining that a sweepstakes promotion remained in truth a guise for unlawful gaming.'

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

'Consumers are being denied of securities and states are giving up substantial tax and profits chances as this gaming changes that conducted through managed channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal expenses and continued lawsuits.

Michael Phelps has signed a deal with the VGW Group, which owns Global Poker
bet9ja.com
In the most current suit, which is largely comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited gaming enterprise. '

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

'We typically don't 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 actually not been formally served.

'We have full confidence in our compliance with all laws and policies where we run, and stay positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play games throughout many of North America, as we have for more than a years, developing not only great games, user experiences and home entertainment, but likewise ensuring this is done securely, responsibly and at the greatest level of requirements.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are reasonably typical across the online social games industry (and the US more broadly), and our basic practice is that we intend to strongly protect any claim which may be brought against us.'
bit.ly
The concerns between conventional online sports betting and sweepstakes gambling establishments could show troublesome for some star endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand while the NBA is partnered with standard gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the exact same time the leagues want to project a strong position against illegal sports betting - especially when trying to tamp down the occasional gambling scandal,' Glaser told DailyMail.com.

It was simply 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.

Along with VGW, Apple and Google are being demanded hosting allegedly illegal sports betting websites

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

'I 'd anticipate that a league crackdown on athletes endorsing sweepstakes sites is a matter of when, not if,' Glaser included.

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

Asked if their celebrity endorsers have an obligation to discuss to clients the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the spokesperson said. '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 challenger of sweepstakes websites, sees things differently.

'Celebrities who provide their names to shady illegal gambling websites are, at a minimum, putting their track records at threat as well as courting civil and class actions by consumers who declare harm,' Glaser said. 'There is likewise some danger that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for helping with illegal gambling.'

New YorkNBADrakeParis Hilton