The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances before the Louisiana Senate for Friday's hearing on illegal gambling.
No, they weren't personally in attendance, however the world-famous celebs were conspicuously included in a slide presentation on social and sweepstakes casinos - the questionable websites providing both complimentary casino-style games and rewarding prizes, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply 2 cogs in the multibillion-dollar industry that now finds itself besieged by claims. In the eyes of numerous video gaming corporations, not to mention suit complainants and state regulators, sweepstakes casinos serve as standard gambling establishments, just without the oversight, customer securities and tax laws. So not only can they avoid the high 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming protections.
One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue last year alone. Now the business faces accusations of illegal sports betting in a New york city suit that declares VGW uses celeb endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's declaration below)
'I'm unsure" if you don't trust us, you can trust Paris Hilton" is a winning message for business running multibillion-dollar illegal operations out of places like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.
Sweepstakes endorsers consist of a variety of celebs from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences between conventional sports betting and sweepstakes play.
Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes gambling establishments discovered online
Ryan Seacrest prompts fans to dip into Chumba Casino, where lots of - however not all - games are totally free
Drake has a handle social sweeps casino, Stake, that he frequently promotes on social media
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Instead, ads usually focus around the social aspect of the gambling establishments, while omitting the potential for real gambling losses.
Others tempt customers with pledges of prizes. One such operator, Stake, ran a social networks ad displaying Drake's vehicles, planes and estates before pivoting to video of the rap artist playing online casino-style games.
'Daddy, why do we have a lot money?' read the very first caption on the screen.
Another caption explained: 'Because I never quit.'
The discrepancy in between gaming sites and social or sweepstakes gambling establishments is a bit complicated, however operators of the latter insist they're not included with the former.
A representative 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 information, the majority of the gamers on social-sweepstakes casinos are sports betting complimentary.
'Most social sweeps consumers never make a purchase,' the SPGA representative informed DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the typical deposit or bet size at real-money online gambling websites.'
Social casinos offer consumers a possibility to play casino-style games with friends. Players have the choice to purchase worthless currency typically described as 'gold coins,' which can not be exchanged for real money, but can be utilized to unlock various functions within the games.
But within the world of social casinos exists sweepstakes gaming, permitting clients to get other currency referred to as 'sweeps coins' that can be exchanged for cash or other prizes.
And therein lies the capacity for monetary losses, like the ones declared 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 past year after continuing to buy more coins in pursuit of cash and other things of value.
The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event
Social sweeps gambling establishment Stake ran an advertisement displaying Drake's vehicles, airplanes and estates
Karl-Anthony Towns of the New York Knicks is another NBA star plugging VGW's Global Poker
Traditional online casinos are prohibited in all however seven states, which has assisted to fuel the popularity of sweepstakes gambling establishments.
Anyone over the age of 18 can access the sweepstakes websites, which don't require typically need identification. However, sites like Chumba will ask for IDs from players attempting to withdraw any funds.
Many websites, like the crypto-compatible Stake, allow customers to submit mail-in ask for complimentary sweeps coins, provided the players follow painfully specific guidelines. What's more, players are frequently rewarded with sweeps coins merely for signing up, therefore providing a reason to try their hands at any variety of casino video games for an opportunity to win - or lose - real cash.
So why are sweepstakes websites enabled to operate in 48 states, while online gambling establishments are prohibited in all but 7?
According to the stakeholders, their item is the complimentary casino-style video gaming, and the real-stakes competitors is simply a method of promoting their support.
'Social sweepstakes games are merely a type of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to play at social gambling establishments with sweepstakes rewards. Consumers never ever need to pay for an opportunity to win rewards. That lack of a purchase requirement - or" factor to consider" - is a vital distinction between social sweeps and traditional online sports betting websites like casinos.'
Consider the manner in which McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and fries that offer them the opportunity to win financially rewarding rewards, such as a $1 million jackpot.
And without a purchase requirement, or 'factor to consider', the video game itself doesn't fulfill the definition of gambling in the US.
'Sweepstakes are a long-standing method for promoting all kinds of daily organizations in the United States, everything from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'
But to many sports betting industry insiders, that argument doesn't cut it.
For starters, video gaming attorney Daniel Wallach explains, McDonald's Monopoly game does not run forever. Rather, it has a well-defined beginning and end, thus recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real products 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 chance,' Wallach told DailyMail.com. 'They're simply money giveaways.
'The sweepstakes [gambling establishments] have none of the attributes typically connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payments, normally 80 percent or more of earnings, whereas the normal payment portion for a short-lived marketing sweepstakes is a trivial share of the income made by the business [typically less than one percent]'
Wallach fasts to compare the online social sweeps gambling establishments to the internet cafes that emerged in Florida, providing customers the possibility to play casino-style games for real rewards. Many of those brick-and-mortar facilities have actually given that been shuttered over accusations of prohibited gaming.
DJ Khaled is amongst a number of celeb spokespeople for VGW's Global Poker brand
Now, Wallach argues, social sweeps gambling establishments must deal with similar scrutiny.
'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have actually consistently been mentioned by courts and state attorney general of the United States as essential consider identifying that a sweepstakes promotion was in reality a guise for prohibited gambling.'
One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.
'Consumers are being denied of defenses and states are forgoing considerable tax and income chances as this gambling changes that carried out through managed channels,' read a well-circulated AGA memo.
And then there are the plaintiffs who have actually sued social gambling establishments in more than a dozen states.
Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal costs and continued lawsuits.
Michael Phelps has actually signed a deal with the VGW Group, which owns Global Poker
In the current claim, which is largely comparable to its predecessors, New york city state citizens Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'illegal sports betting enterprise. '
Apple and Google have also been named as defendants in claims for hosting the sweepstakes sites. But unlike VGW, neither tech business responded to DailyMail.com's ask for remark.
'We normally don't talk about matters before the courts,' a VGW spokesperson informed DailyMail.com by means of e-mail. 'However, we keep in mind that this claim has only simply been submitted with the court and VGW has not been officially served.
'We have full confidence in our compliance with all laws and policies where we operate, and stay positive about the future,' the spokesperson continued. 'We continue to use our free-to-play video games across most of The United States and Canada, as we have for more than a years, producing not just great games, user experiences and home entertainment, however likewise guaranteeing this is done securely, responsibly and at the greatest level of requirements.
'More broadly, we 'd repeat that class actions and other lawsuits and arbitrations are fairly common throughout the online social games industry (and the US more broadly), and our standard practice is that we plan to intensely defend any claim which might be brought against us.'
The problems in between conventional online sports betting and sweepstakes gambling establishments might show bothersome for some celeb 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 gaming titans like FanDuel and DraftKings.
'It's ironic that professional athletes are hawking illegal sports betting wagering 'sweeps' sites while at the same time the leagues want to predict a strong stance against unlawful gambling - particularly when attempting to tamp down the periodic gambling scandal,' Glaser informed DailyMail.com.
It was just eight months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes casinos.
In addition to VGW, Apple and Google are being taken legal action against for hosting apparently unlawful sports betting sites
Regardless, Glaser sees sweepstakes casinos as a major issue 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 spokesperson nor the gamers' representatives reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also disregarded to react to DailyMail.com emails.
Asked if their celebrity endorsers have a responsibility to describe to customers the distinctions and similarities between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that requires to be done.
'We have full self-confidence in our influencer and ambassadorial partnerships, and our company practices more broadly,' the spokesperson said. 'Some of our values are" our players 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 differently.

'Celebrities who lend their names to shady illegal gambling websites are, at a minimum, putting their reputations at threat along with courting civil and class actions by consumers who allege damage,' Glaser stated. 'There is likewise some risk that state regulators and state attorneys basic rope celebrity endorsers into enforcement efforts for facilitating prohibited sports betting.'
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