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

No, they weren't personally in presence, but the world-famous celebrities were notably included in a slide presentation on social and sweepstakes gambling establishments - the controversial sites offering both complimentary 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 complimentary,' 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 finds itself besieged by claims. In the eyes of numerous gaming corporations, not to discuss suit complainants and state regulators, sweepstakes gambling establishments act as traditional casinos, only 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 regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces accusations of illegal gaming in a New york city claim that claims VGW uses celebrity endorsers to 'develop a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm uncertain" 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 presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers consist of a variety of celebs from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences between standard gaming and sweepstakes play.

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

Ryan Seacrest prompts fans to dip into Chumba Casino, where numerous - but not all - games are complimentary

Drake has a deal with social sweeps casino, Stake, that he regularly touts on social networks

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Instead, advertisements usually center around the social aspect of the casinos, while omitting the potential for actual sports betting losses.

Others tempt clients with pledges of prizes. One such operator, Stake, ran a social media ad displaying Drake's cars, planes and mansions before rotating to video of the rap artist playing online casino-style video games.

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

Another caption explained: 'Because I never gave up.'

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

A representative for a market 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 players on social-sweepstakes casinos are sports betting complimentary.

'Most social sweeps customers never ever purchase,' the SPGA spokesperson informed 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 sports betting websites.'

Social gambling establishments use customers a possibility to play casino-style games with friends. Players have the choice to buy worthless currency frequently described as 'gold coins,' which can not be exchanged for real money, however can be used to unlock numerous features within the games.

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

And therein lies the capacity for financial losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous 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 event

Social sweeps gambling establishment Stake ran an advertisement displaying Drake's cars and trucks, airplanes and mansions

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

Traditional online gambling establishments are banned in all but 7 states, which has actually assisted to fuel the appeal of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, permit clients to submit mail-in ask for totally free sweeps coins, offered the players follow painfully particular instructions. What's more, players are typically rewarded with sweeps coins simply for signing up, therefore providing them a factor to attempt their hands at any number of gambling establishment games for an opportunity to win - or lose - genuine money.

So why are sweepstakes websites enabled to operate in 48 states, while online gambling establishments are prohibited in all but 7?

According to the stakeholders, their product is the complimentary casino-style gaming, and the real-stakes competition is merely a means of promoting their bread and butter.

'Social sweepstakes games are just a type of online entertainment,' an SPGA spokesperson told DailyMail.com by email. '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" consideration" - is an essential distinction between social sweeps and traditional online sports betting websites like gambling establishments.'

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 french fries that use them the chance to win rewarding prizes, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the game itself does not satisfy the meaning of sports betting in the US.

'Sweepstakes are a long-standing approach for promoting all kinds of everyday services in the United States, whatever from burgers 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 home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting industry experts, that argument doesn't cut it.

For beginners, video gaming lawyer Daniel Wallach explains, McDonald's Monopoly game does not run forever. Rather, it has a distinct start and end, therefore recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine products like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're normally not tied to casino-style games of chance,' Wallach informed DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] have none of the attributes frequently connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payments, usually 80 percent or more of profits, whereas the common payment portion for a short-lived marketing sweepstakes is a trivial share of the earnings made by the company [normally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the web coffee shops that sprang up in Florida, using consumers the opportunity to play casino-style video games for genuine prizes. Many of those brick-and-mortar establishments have given that been shuttered over allegations of illegal gambling.

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

Now, Wallach argues, social sweeps casinos ought to face comparable examination.

'These distinctions are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually consistently been pointed out by courts and state attorney generals as essential consider figuring out that a sweepstakes promo was in reality a guise for unlawful sports betting.'

One of the gambling establishment market's leading trade companies, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, in some cases, enact new legislation on the concern.

'Consumers are being deprived of defenses and states are passing up significant tax and revenue opportunities as this gaming changes that carried out through managed channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal costs and continued lawsuits.

Michael Phelps has actually signed an offer with the VGW Group, which owns Global Poker

In the current suit, which is mostly comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gambling business. '

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

'We generally don't comment on matters before the courts,' a VGW spokesperson told DailyMail.com by means of email. 'However, we note that this claim has only just been filed with the court and VGW has actually not been formally served.

'We have complete self-confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the representative continued. 'We continue to use our free-to-play video games throughout many of The United States and Canada, as we have for more than a years, producing not just excellent video games, user experiences and home entertainment, however likewise guaranteeing this is done securely, properly and at the highest level of standards.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are reasonably common throughout the online social video games industry (and the US more broadly), and our basic practice is that we intend to vigorously protect any claim which may be brought versus us.'

The concerns between conventional online gaming and sweepstakes gambling establishments might prove problematic for some celeb 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 conventional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the very same time the leagues wish to forecast a strong stance against illegal gambling - particularly when trying to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over claims he conspired with bettors. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes casinos.

Together with VGW, Apple and Google are being sued for hosting apparently illegal sports betting websites

Regardless, Glaser sees sweepstakes casinos as a major issue for leagues such as the NBA.

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

Neither an NBA spokesperson nor the gamers' agents reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to respond to DailyMail.com e-mails.

Asked if their celeb endorsers have an obligation to explain to clients the distinctions and resemblances between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative said. 'A few of our worths are" our gamers come initially" 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 differently.

'Celebrities who provide their names to shady illegal gaming sites are, at a minimum, putting their track records at risk as well as courting civil and class actions by customers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state lawyers basic rope star endorsers into enforcement efforts for helping with prohibited sports betting.'

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