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 participation, but the world-famous stars were notably included in a slide presentation on social and sweepstakes gambling establishments - the controversial sites using both complimentary casino-style video games and rewarding rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
The websites are just two cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of numerous video gaming corporations, not to discuss claim complainants and state regulators, sweepstakes gambling establishments act as standard gambling establishments, only without the oversight, customer protections and tax laws. So not only can they prevent the steep 24-percent federal sports betting levy, but sweepstakes operators aren't subject to regulatory 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 faces accusations of illegal gaming in a New york city lawsuit that claims VGW utilizes star endorsers to 'produce a veneer of authenticity' around its product. (See VGW's declaration below)
'I'm not sure" if you don't trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar illegal operations out of locations 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 include a variety of celebrities from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any differences in between standard gambling and sweepstakes play.
Paris Hilton is seen plugging Wow Vegas, among many sweepstakes casinos discovered online
Ryan Seacrest advises fans to play at Chumba Casino, where numerous - but not all - video games are totally free
Drake has a handle social sweeps gambling establishment, Stake, that he routinely touts on social networks
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Instead, ads generally center around the social aspect of the casinos, while leaving out the potential for actual gambling losses.
Others lure clients with promises of rewards. One such operator, Stake, ran a social media ad flaunting Drake's cars, planes and estates before pivoting to video footage of the rapper playing online casino-style video games.
'Daddy, why do we have a lot money?' check out the first caption on the screen.
Another caption described: 'Because I never ever provided up.'
The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit intricate, however operators of the latter insist they're not included 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 gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.
'Most social sweeps customers never buy,' the SPGA spokesperson told DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller sized than the normal deposit or bet size at real-money online gambling sites.'
Social casinos use consumers a chance to play casino-style video games with buddies. Players have the alternative to buy valueless currency often described as 'gold coins,' which can not be exchanged for genuine cash, however can be used to unlock numerous features within the video games.

But within the world of social casinos exists sweepstakes gaming, allowing customers to acquire other currency referred to as 'sweeps coins' that can be exchanged for cash or other prizes.
And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One player told the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to purchase more coins in pursuit of money and other things of worth.
The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker occasion
Social sweeps casino Stake ran an ad displaying Drake's cars and trucks, planes and estates
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 7 states, which has actually assisted to sustain the popularity of sweepstakes casinos.
Anyone over the age of 18 can access the sweepstakes sites, which don't require normally require recognition. However, sites like Chumba will request for IDs from gamers attempting to withdraw any funds.
Many websites, like the crypto-compatible Stake, permit clients to submit mail-in requests for free sweeps coins, supplied the players follow painfully specific instructions. What's more, gamers are frequently rewarded with sweeps coins just for registering, thereby providing a reason to attempt their hands at any variety of gambling establishment games for an opportunity to win - or lose - genuine money.
So why are sweepstakes websites permitted to operate in 48 states, while online gambling establishments are banned in all but 7?
According to the stakeholders, their product is the totally free casino-style gaming, and the real-stakes competition is just a method of promoting their bread and butter.
'Social sweepstakes video games are simply a kind of online home entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never have to spend for an opportunity to win rewards. That absence of a purchase requirement - or" factor to consider" - is an essential difference in between social sweeps and conventional online gaming websites like gambling establishments.'
Consider the method that McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that provide them the opportunity to win lucrative rewards, such as a $1 million jackpot.
And without a purchase requirement, or 'consideration', the video game itself doesn't satisfy the definition of gaming in the US.
'Sweepstakes are an enduring approach for promoting all sort of daily companies in the United States, everything from hamburgers to magazine subscriptions to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promos 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 experts, that argument doesn't cut it.
For starters, video gaming attorney Daniel Wallach mentions, McDonald's Monopoly video game does not run forever. Rather, it has a distinct start and end, thereby recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote genuine products like french fries, shakes, and the Filet-O-Fish.
'They do not last forever and they're typically not tied to casino-style video games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.
'The sweepstakes [gambling establishments] possess none of the attributes frequently related to McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payouts, generally 80 percent or more of earnings, whereas the common payout portion for a short-term advertising sweepstakes is an unimportant share of the earnings earned by the company [normally less than one percent]'
Wallach is quick to liken the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, providing consumers the opportunity to play casino-style video games for genuine rewards. Much of those brick-and-mortar facilities have since been shuttered over allegations of unlawful gaming.
DJ Khaled is amongst a number of star spokespeople for VGW's Global Poker brand name
Now, Wallach argues, social sweeps casinos must face comparable analysis.
'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been mentioned by courts and state lawyer generals as essential elements in figuring out that a sweepstakes promotion remained in fact a guise for prohibited gaming.'
Among the gambling establishment market's leading trade companies, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in some cases, enact new legislation on the problem.
'Consumers are being denied of defenses and states are forgoing significant tax and earnings opportunities as this sports betting replaces that conducted through managed channels,' read a well-circulated AGA memo.
And after that there are the complainants who have taken legal action against social casinos in more than a dozen states.
Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action suit, stating the settlement was made to avoid legal expenses and continued lawsuits.
Michael Phelps has signed an offer with the VGW Group, which owns Global Poker
In the current lawsuit, which is mostly comparable to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful sports betting business. '
Apple and Google have actually likewise been called as offenders in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's demand for remark.
'We normally 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 actually 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 run, and remain confident about the future,' the spokesperson continued. 'We continue to use our free-to-play video games across the majority of North America, as we have for more than a decade, producing not just great games, user experiences and entertainment, but likewise ensuring this is done safely, properly and at the highest level of standards.
'More broadly, we 'd repeat that class actions and other litigations and arbitrations are reasonably typical across the online social video games market (and the US more broadly), and our standard practice is that we intend to strongly protect any claim which might be brought versus us.'
The concerns in between traditional online gaming and sweepstakes casinos could 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 traditional gaming titans like FanDuel and DraftKings.
'It's ironic that professional athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the same time the leagues wish to predict a strong position against prohibited sports betting - especially when attempting to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime 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 gambling establishments.
Together with VGW, Apple and Google are being sued for hosting presumably prohibited 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 professional athletes backing sweepstakes sites is a matter of when, not if,' Glaser included.
Neither an NBA spokesperson nor the gamers' representatives reacted to DailyMail.com's demands 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 duty to explain to customers 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 collaborations, and our business practices more broadly,' the representative said. 'A few of our values are" our players come initially" and" we do what's right", and we put our worths at the core of everything we do.'
Glaser, an outspoken opponent of sweepstakes sites, sees things differently.
'Celebrities who lend their names to shady unlawful gambling websites are, at a minimum, putting their track records at danger as well as courting civil and class actions by consumers who declare damage,' Glaser said. 'There is likewise some threat that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for helping with illegal gambling.'
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