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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 prohibited gambling.
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No, they weren't personally in presence, however the world-famous stars were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the controversial websites using both complimentary casino-style video games and lucrative prizes, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet totally free,' 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 many gaming corporations, not to mention suit complainants and state regulators, sweepstakes casinos function as conventional gambling establishments, just without the oversight, customer securities and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't based on regulatory obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the business deals with accusations of illegal gaming in a New York suit that claims VGW utilizes celebrity endorsers to 'create a veneer of legitimacy' around its product. (See VGW's declaration listed below)

'I'm uncertain" if you do not trust us, you can trust Paris Hilton" is a winning message for business running multibillion-dollar prohibited operations out of locations 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 variety of stars from gambling 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 conventional gaming and sweepstakes play.

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

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

Drake has a handle social sweeps gambling establishment, Stake, that he frequently promotes on social media

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Instead, advertisements generally center around the social element of the casinos, while leaving out the potential for actual gaming losses.

Others lure customers with promises of rewards. One such operator, Stake, ran a social networks advertisement flaunting Drake's cars and trucks, planes and estates before rotating to video footage of the rap artist playing online casino-style video games.

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

Another caption explained: 'Because I never quit.'

The disparity between gambling sites and social or sweepstakes gambling establishments is a bit complex, however operators of the latter insist they're not involved with the former.

A spokesperson for a market 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 free.

'Most social sweeps customers never ever make a purchase,' the SPGA representative told 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 gaming sites.'

Social casinos provide consumers a possibility to play casino-style video games with good friends. Players have the option to buy valueless currency typically described as 'gold coins,' which can not be exchanged genuine money, but can be used to unlock different features within the video games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting clients to get other currency understood 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 plaintiffs in Florida, Georgia, New Jersey and New York City. One gamer told 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 event

Social sweeps casino Stake ran an advertisement flaunting Drake's automobiles, aircrafts and mansions

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

Traditional online casinos are banned in all but seven states, which has helped to sustain the appeal of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, allow customers to send mail-in requests for free sweeps coins, provided the players follow painfully particular guidelines. What's more, gamers are typically rewarded with sweeps coins simply for signing up, thereby giving them a factor to attempt their hands at any number of casino video games for a chance to win - or lose - real cash.

So why are sweepstakes sites permitted to operate in 48 states, while online casinos are prohibited in all but 7?

According to the stakeholders, their product is the totally free casino-style video gaming, and the real-stakes competitors is simply a way of promoting their support.

'Social sweepstakes games are simply a kind of online home entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never need to spend for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is an essential difference between social sweeps and conventional online gambling websites like casinos.'

Think of the manner in which 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 offer them the opportunity to win profitable prizes, such as a $1 million jackpot.

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

'Sweepstakes are an enduring approach for promoting all sort of daily organizations in the United States, whatever from burgers to magazine memberships to coffee and home improvement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are frequently used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market insiders, that argument does not cut it.

For beginners, gaming attorney Daniel Wallach points out, McDonald's Monopoly game does not run forever. Rather, it has a well-defined beginning and end, consequently recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being used to promote genuine products like fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're usually not connected to casino-style video games of opportunity, informed DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] possess none of the attributes frequently associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos use" casino-like" payments, typically 80 percent or more of revenues, whereas the typical payout portion for a short-term marketing sweepstakes is a minor share of the profits made by the business [typically less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the web coffee shops that sprang up in Florida, using customers the chance to play casino-style video games for genuine rewards. A lot of those brick-and-mortar facilities have considering that been shuttered over claims of unlawful gambling.

DJ Khaled is among several star spokespeople for VGW's Global Poker brand name

Now, Wallach argues, social sweeps gambling establishments need to deal with similar examination.

'These distinctions are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually consistently been cited by courts and state lawyer generals as essential consider determining that a sweepstakes promo was in fact a guise for prohibited gambling.'

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

'Consumers are being deprived of securities and states are passing up significant tax and profits chances as this gaming replaces that carried out 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 four different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to prevent legal costs and continued litigation.

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

In the most recent lawsuit, which is largely similar to its predecessors, New York state citizens Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gaming business. '

Apple and Google have likewise been named as accuseds in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech business responded to DailyMail.com's ask for remark.

'We typically do not comment on matters before the courts,' a VGW spokesperson informed DailyMail.com via email. 'However, we note that this claim has actually only just been submitted with the court and VGW has not been formally served.

'We have full self-confidence in our compliance with all laws and policies where we run, and stay confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across most of North America, as we have for more than a years, creating not just fantastic games, user experiences and entertainment, however likewise ensuring this is done securely, responsibly and at the greatest level of requirements.

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

The concerns between conventional online gaming and sweepstakes gambling establishments could prove troublesome for some celebrity 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 conventional gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the very same time the leagues wish to project a strong stance versus illegal gaming - 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 got a lifetime restriction from the NBA over allegations he conspired with bettors. 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 apparently illegal sports betting sites

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

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

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

Asked if their celeb endorsers have a responsibility to describe to customers the distinctions and resemblances between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that needs to be done.

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative stated. 'Some of our worths are" our gamers precede" and" we do what's right", and we put our values at the core of everything we do.'

Glaser, an outspoken challenger of sweepstakes websites, sees things in a different way.
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'Celebrities who provide their names to shady prohibited gaming websites are, at a minimum, putting their credibilities at threat along with courting civil and class actions by customers who declare damage,' Glaser stated. 'There is also some risk that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for facilitating unlawful gaming.'

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