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, but the world-famous celebrities were notably included in a slide discussion on social and sweepstakes casinos - the questionable websites providing both complimentary casino-style video games and profitable prizes, such as money, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are simply two cogs in the multibillion-dollar industry that now finds itself besieged by lawsuits. In the eyes of many gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes casinos act as traditional casinos, just without the oversight, consumer protections and tax laws. So not just can they prevent the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business faces accusations of illegal gaming in a New york city suit that claims VGW uses celeb endorsers to 'create a veneer of authenticity' around its product. (See VGW's statement 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 illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a range of celebs 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 distinctions between standard sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes gambling establishments found online
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Ryan Seacrest advises fans to play at Chumba Casino, where many - however not all - games are free

Drake has an offer with social sweeps gambling establishment, Stake, that he regularly promotes on social media

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

Others lure clients with pledges of prizes. One such operator, Stake, ran a social networks ad showing off Drake's cars, planes and mansions before rotating to video footage of the rapper playing online casino-style games.

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

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

The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit complicated, but operators of the latter insist they're not involved with the former.

A representative for an industry 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 complimentary.

'Most social sweeps customers never ever purchase,' the SPGA representative informed DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the normal deposit or bet size at real-money online sports betting websites.'

Social gambling establishments offer clients an opportunity to play casino-style games with buddies. Players have the choice to buy valueless currency often referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be utilized to unlock numerous features within the games.

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

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 previous year after continuing to buy more coins in pursuit of cash and other things of value.

The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion

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

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 however 7 states, which has helped to fuel the appeal of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which do not need generally need recognition. However, sites like Chumba will request for IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to submit mail-in ask for free sweeps coins, offered the gamers follow painfully specific instructions. What's more, gamers are frequently rewarded with sweeps for registering, consequently providing a reason to attempt their hands at any number of gambling establishment games for a chance to win - or lose - genuine cash.

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

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

'Social sweepstakes games are merely a form of online home entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never have to pay for a chance to win prizes. That lack of a purchase requirement - or" factor to consider" - is a crucial difference in between social sweeps and traditional online gambling sites like gambling establishments.'

Think of the way that McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and french fries that offer them the chance to win rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself does not fulfill the meaning of gambling in the US.

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

But to numerous gambling market insiders, that argument doesn't cut it.

For beginners, gaming lawyer Daniel Wallach points out, McDonald's Monopoly video game doesn't run forever. Rather, it has a well-defined start and end, thus suggesting the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being utilized to promote genuine products like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're generally not connected to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [casinos] possess none of the attributes commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payments, usually 80 percent or more of incomes, whereas the common payment percentage for a short-lived promotional sweepstakes is an insignificant share of the earnings made by the business [normally less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, providing consumers the chance to play casino-style games for real prizes. A number of those brick-and-mortar establishments have actually since been shuttered over allegations of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos need to face comparable analysis.

'These distinctions are not approximate,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been pointed out by courts and state attorney generals as essential consider figuring out that a sweepstakes promotion was in reality a guise for unlawful gambling.'

Among the casino industry's leading trade organizations, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, in some cases, enact brand-new legislation on the concern.

'Consumers are being denied of securities and states are forgoing considerable tax and income opportunities as this gaming changes that conducted through controlled channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have actually taken legal action against social casinos 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 misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to avoid legal costs and continued lawsuits.
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Michael Phelps has actually signed a deal with the VGW Group, which owns Global Poker

In the newest suit, which is mostly similar to its predecessors, New York 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 actually also been called as defendants in suits for hosting the sweepstakes sites. But unlike VGW, neither tech business responded to DailyMail.com's demand for remark.

'We normally don't talk about matters before the courts,' a VGW representative told DailyMail.com through e-mail. 'However, we note that this claim has only just been filed with the court and VGW has not been officially served.
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'We have full self-confidence in our compliance with all laws and policies where we operate, and stay confident about the future,' the spokesperson continued. 'We continue to use our free-to-play games throughout the majority of The United States and Canada, as we have for more than a years, creating not only terrific video games, user experiences and home entertainment, but also guaranteeing this is done safely, responsibly and at the highest level of standards.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are fairly typical across the online social games market (and the US more broadly), and our standard practice is that we intend to strongly safeguard any claim which might be brought against us.'

The problems in between traditional online gaming and sweepstakes casinos might 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 conventional video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking unlawful sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to predict a strong stance versus illegal gambling - specifically when trying to tamp down the occasional gambling scandal,' Glaser told DailyMail.com.

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

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

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

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

Neither an NBA spokesperson nor the players' agents reacted 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 celebrity endorsers have a responsibility to describe to consumers the differences and similarities between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'A few of our worths are" our gamers come first" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things in a different way.
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'Celebrities who provide their names to shady illegal sports betting sites are, at a minimum, putting their track records at threat in addition to courting civil and class actions by consumers who declare damage,' Glaser stated. 'There is also some danger that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for assisting in unlawful sports betting.'

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