The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on prohibited sports betting.
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No, they weren't personally in participation, however the world-famous celebrities were notably consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites offering both totally free casino-style games and rewarding prizes, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are just two cogs in the multibillion-dollar market that now discovers itself besieged by claims. In the eyes of many gaming corporations, not to point out claim complainants and state regulators, sweepstakes gambling establishments act as conventional gambling establishments, just without the oversight, consumer securities and tax laws. So not only can they avoid the steep 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulative difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company deals with accusations of illegal sports betting in a New York claim that declares VGW utilizes star endorsers to 'create a veneer of legitimacy' 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 prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.
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Sweepstakes endorsers include a variety of celebrities from sports betting lovers 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 traditional gaming and sweepstakes play.

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

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

Drake has a handle social sweeps casino, Stake, that he frequently promotes on social networks

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Instead, advertisements generally focus around the social aspect of the gambling establishments, while omitting the potential for actual gaming losses.

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

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

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

The inconsistency in between gaming sites and social or sweepstakes gambling establishments is a bit intricate, but operators of the latter insist they're not included with the former.

A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, the majority of the gamers on social-sweepstakes casinos are sports betting complimentary.

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

Social gambling establishments offer consumers a possibility to play casino-style video games with good friends. Players have the option to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged for real cash, however can be used to unlock numerous functions within the video games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting consumers to obtain other currency referred to as 'sweeps coins' that can be exchanged for cash 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 gamer informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to buy more coins in pursuit of money and other things of value.

The Philadelphia 76ers' Paul George is seen promoting a Global Poker occasion

Social sweeps casino Stake ran an advertisement revealing off Drake's cars, aircrafts and mansions

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

Traditional online gambling establishments are prohibited in all however seven states, which has assisted to fuel the appeal of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable consumers to send mail-in ask for free sweeps coins, supplied the gamers follow painfully particular instructions. What's more, players are typically rewarded with sweeps coins just for registering, therefore providing a factor to attempt their hands at any number of casino video games for a chance to win - or lose - genuine cash.

So why are sweepstakes sites permitted to run in 48 states, while online gambling establishments are banned in all but 7?

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

'Social sweepstakes video games are merely a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never have to pay for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is a crucial distinction between social sweeps and conventional online gaming websites like gambling establishments.'

Think of the method that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and fries that provide them the opportunity to win lucrative prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing method for promoting all kinds of daily companies in the United States, whatever from burgers to magazine memberships to coffee and home improvement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry insiders, that argument does not cut it.

For starters, video gaming attorney Daniel Wallach explains, McDonald's Monopoly video game doesn't run forever. Rather, it has a distinct beginning and end, consequently suggesting the sweepstakes is not the primary product. Instead, the sweepstakes is being used to promote genuine items 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 possibility,' Wallach informed DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes typically connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos offer" casino-like" payments, generally 80 percent or more of earnings, whereas the common payment percentage for a short-term promotional sweepstakes is a trivial share of the revenue earned by the company [normally less than one percent]'

Wallach is fast to compare the online social sweeps gambling establishments to the web cafes that emerged in Florida, offering customers the opportunity to play casino-style video games for real prizes. A lot of those brick-and-mortar establishments have actually since been shuttered over accusations of prohibited gaming.

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

Now, Wallach argues, social sweeps gambling establishments should deal with comparable scrutiny.

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

One of the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, sometimes, enact new legislation on the concern.

'Consumers are being deprived of protections and states are giving up considerable tax and earnings opportunities as this gambling replaces that performed through controlled channels,' read a well-circulated AGA memo.

And after that there are the plaintiffs who have taken legal action against 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 admitting any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, saying the settlement was made to prevent legal expenses and continued litigation.

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

In the most recent suit, which is largely similar 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 'illegal sports betting business. '

Apple and Google have also been called as defendants in claims for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's ask for remark.

'We typically do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we note that this claim has only just been filed with the court and VGW has actually not been officially served.

'We have full self-confidence in our compliance with all laws and guidelines where we operate, and stay confident about the future,' the representative continued. 'We continue to use our free-to-play games across the majority of North America, as we have for more than a decade, creating not only terrific games, user experiences and home entertainment, but also ensuring this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly typical throughout the online social video games industry (and the US more broadly), and our basic practice is that we mean to vigorously safeguard any claim which might be brought against us.'

The concerns in between standard online gambling and sweepstakes gambling establishments might prove troublesome for some celeb 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 traditional gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting 'sweeps' sites while at the same time the leagues want to predict a strong stance against prohibited gambling - particularly when trying to tamp down the periodic gambling 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 allegations he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes casinos.

Together with VGW, Apple and Google are being demanded hosting presumably illegal gambling sites

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

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

Neither an NBA spokesman 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 neglected to react to DailyMail.com e-mails.

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

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the spokesperson stated. 'Some of our values are" our players precede" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken opponent of sweepstakes websites, sees things differently.
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'Celebrities who provide their names to dubious unlawful sports betting websites are, at a minimum, putting their track records at threat in addition to courting civil and class actions by customers who allege damage,' Glaser said. 'There is likewise some threat that state regulators and state attorneys general rope star endorsers into enforcement efforts for facilitating prohibited gaming.'

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