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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, but the world-famous celebrities were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable websites using both free casino-style games and financially rewarding rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are just 2 cogs in the multibillion-dollar market that now discovers itself besieged by lawsuits. In the eyes of numerous video gaming corporations, not to point out suit complainants and state regulators, sweepstakes gambling establishments act as traditional casinos, just without the oversight, consumer protections and tax laws. So not just can they prevent the high 24-percent federal gambling levy, but 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 in 2015 alone. Now the business deals with allegations of illegal sports betting in a New york city claim that claims VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm not sure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business 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 consist of a variety of celebrities from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between conventional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among many sweepstakes gambling establishments discovered online

Ryan Seacrest advises fans to play at Chumba Casino, where lots of - however not all - games are totally free

Drake has a handle social sweeps casino, Stake, that he routinely touts on social networks

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Instead, ads generally focus around the social element of the gambling establishments, while omitting the capacity for real gambling losses.

Others tempt clients with promises of rewards. One such operator, Stake, ran a social media ad revealing off Drake's vehicles, aircrafts 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 discussed: 'Because I never ever provided up.'
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The discrepancy between gambling sites and social or sweepstakes gambling establishments is a bit complicated, however 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), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the players on social-sweepstakes casinos are playing for free.

'Most social sweeps clients never ever buy,' the SPGA spokesperson told DailyMail.com. 'The minority of customers who make purchases do so in quantities far smaller sized than the typical deposit or wager size at real-money online sports betting websites.'

Social gambling establishments provide consumers an opportunity to play casino-style games with pals. Players have the option to buy valueless currency often described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to open numerous functions within the video games.

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

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

Social sweeps casino Stake ran an advertisement flaunting Drake's cars and trucks, aircrafts and estates

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 however seven states, which has actually assisted to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit consumers to send mail-in requests for complimentary sweeps coins, supplied the players follow painfully particular instructions. What's more, gamers are frequently rewarded with sweeps coins merely for signing up, thereby giving them a factor to attempt their hands at any number of casino video games for an opportunity to win - or lose - genuine money.

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

According to the stakeholders, their product is the complimentary casino-style gaming, and the real-stakes competition is simply a method of promoting their support.

'Social sweepstakes games are simply a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to play at social gambling establishments with sweepstakes prizes. Consumers never ever have to pay for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is an essential distinction between social sweeps and standard online sports betting websites like gambling establishments.'

Think of the manner in which McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that provide them the chance to win lucrative prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself does not meet the meaning of sports betting in the US.

'Sweepstakes are a long-standing method for promoting all sort of everyday companies in the United States, whatever from hamburgers to magazine subscriptions to coffee and home improvement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are regularly utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry experts, that argument doesn't cut it.

For starters, video gaming attorney Daniel Wallach points out, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're generally not tied to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just money giveaways.

'The sweepstakes [gambling establishments] possess none of the characteristics typically connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payments, generally 80 percent or more of incomes, whereas the normal payout percentage for a short-term marketing sweepstakes is a trivial share of the profits earned by the business [usually less than one percent]'

Wallach is quick to compare the online social sweeps gambling establishments to the web cafes that sprang up in Florida, offering customers the chance to play casino-style games for genuine prizes. A lot of those brick-and-mortar establishments have because been shuttered over accusations of unlawful gambling.

DJ Khaled is amongst a number of star spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos ought to deal with comparable scrutiny.

'These distinctions are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state attorney general of the United States as key aspects in identifying that a sweepstakes promo was in reality a guise for unlawful gaming.'

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

are being deprived of defenses and states are giving up substantial tax and revenue opportunities as this sports betting changes that carried out through regulated channels,' checked out 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 four different cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, saying the settlement was made to prevent legal expenses and continued litigation.

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

In the most recent suit, which is mostly similar to its predecessors, New york city state citizens Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is described in the filing as an 'unlawful sports betting enterprise. '

Apple and Google have likewise been called as accuseds in claims for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's request for comment.

'We typically do not comment on matters before the courts,' a VGW representative told DailyMail.com via email. 'However, we note that this claim has only just been filed with the court and VGW has not been officially served.

'We have full self-confidence in our compliance with all laws and policies where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a decade, creating not just terrific video games, user experiences and home entertainment, but also ensuring this is done safely, responsibly and at the greatest level of requirements.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are fairly common across the online social video games market (and the US more broadly), and our basic practice is that we intend to intensely safeguard any claim which might be brought versus us.'

The concerns in between traditional online gambling and sweepstakes casinos might prove bothersome for some celebrity 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 ironic that professional athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the exact same time the leagues desire to project a strong stance against prohibited sports betting - especially 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 received a life time ban from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.

In addition to VGW, Apple and Google are being demanded hosting apparently illegal sports betting websites

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

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

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 likewise overlooked to respond to DailyMail.com emails.

Asked if their celebrity endorsers have a responsibility to explain to clients the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW insisted there is absolutely nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative said. 'A few of our values are" our players come first" 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 in a different way.

'Celebrities who lend their names to dubious illegal gambling websites are, at a minimum, putting their track records at danger along with courting civil and class actions by customers who allege damage,' Glaser said. 'There is likewise some risk that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in illegal gambling.'

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