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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 gambling.

No, they weren't personally in attendance, however the world-famous celebs were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the questionable websites using both free casino-style video games and lucrative rewards, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.
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The websites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to discuss claim plaintiffs and state regulators, sweepstakes gambling establishments act as conventional gambling establishments, just without the oversight, consumer protections and tax laws. So not only can they prevent the high 24-percent federal sports betting 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 profits in 2015 alone. Now the company faces accusations of illegal gaming in a New york city claim that claims VGW utilizes star endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's statement below)

'I'm unsure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar unlawful operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of stars from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars and Paul George - none of whom provide any differences in between conventional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes casinos found online

Ryan Seacrest prompts fans to play at Chumba Casino, where many - but not all - video games are totally free

Drake has a handle social sweeps casino, Stake, that he routinely promotes on social media

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Instead, advertisements normally center around the social element of the casinos, while leaving out the capacity for real gambling losses.

Others lure consumers with promises of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's vehicles, aircrafts and mansions before pivoting to video of the rap artist playing online casino-style games.

'Daddy, why do we have a lot money?' check out the first caption on the screen.
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Another caption discussed: 'Because I never quit.'

The disparity in between gaming websites and social or sweepstakes gambling establishments is a bit intricate, however operators of the latter insist they're not included with the previous.

A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), described 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 totally free.

'Most social sweeps customers never make a purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in quantities far smaller sized than the common deposit or bet size at real-money online gaming sites.'

Social casinos use clients a possibility to play casino-style video games with good friends. Players have the choice to purchase valueless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, however can be utilized to open various features within the video games.

But within the world of social casinos exists sweepstakes video gaming, enabling customers to get other currency understood as 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the capacity for financial losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York. One player informed 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 money and other things of value.

The Philadelphia 76ers' Paul George is seen promoting an International Poker event
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Social sweeps gambling establishment Stake ran an advertisement displaying Drake's cars and trucks, planes and estates

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

Traditional online casinos are prohibited in all however 7 states, which has actually helped to fuel the appeal of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable customers to send mail-in requests for complimentary sweeps coins, supplied the players follow painfully particular guidelines. What's more, gamers are frequently rewarded with sweeps coins just for signing up, thereby providing a reason to attempt their hands at any variety of casino video games for a possibility to win - or lose - genuine cash.

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

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

'Social sweepstakes games are merely a form of online entertainment,' an SPGA representative informed DailyMail.com by e-mail. 'No purchase is needed to play at social gambling establishments with sweepstakes rewards. Consumers never need to spend for an opportunity to win prizes. That lack of a purchase requirement - or" consideration" - is an essential difference in between social sweeps and traditional online gambling sites like casinos.'

Think about the way 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 fries that offer them the possibility to win rewarding rewards, such as a $1 million prize.
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And without a purchase requirement, or 'factor to consider', the game itself doesn't fulfill the definition of gambling in the US.

'Sweepstakes are an enduring approach for promoting all sort of everyday services in the United States, everything from burgers to publication subscriptions to coffee and home enhancement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, gaming attorney Daniel Wallach mentions, McDonald's Monopoly video game does not run forever. Rather, it has a well-defined beginning and end, therefore recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real items like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're typically not tied to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] possess none of the attributes typically related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments provide" casino-like" payouts, generally 80 percent or more of earnings, whereas the typical payout portion for a momentary advertising sweepstakes is a minor share of the earnings earned by the company [typically less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the internet cafes that sprang up in Florida, using clients the chance to play casino-style games for real rewards. A number of those brick-and-mortar establishments have actually since been shuttered over allegations of unlawful gambling.

DJ Khaled is amongst several celebrity spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps gambling establishments should face comparable analysis.

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have repeatedly been pointed out by courts and state lawyer generals as key consider identifying that a sweepstakes promo remained in truth a guise for illegal gaming.'

Among the gambling establishment market's leading trade companies, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, in some cases, enact brand-new legislation on the problem.

'Consumers are being denied of protections and states are passing up substantial tax and revenue chances as this gaming changes that conducted through regulated 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 4 different cases in Kentucky without confessing any wrongdoing, 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 litigation.

Michael Phelps has signed a handle the VGW Group, which owns Global Poker

In the most recent lawsuit, which is largely comparable to its predecessors, New york city state residents 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 gambling business. '

Apple and Google have also been called as defendants in suits for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's request for remark.

'We generally don't discuss matters before the courts,' a VGW representative informed DailyMail.com via email. 'However, we note that this claim has only just been filed with the court and VGW has not been formally served.

'We have complete confidence in our compliance with all laws and policies where we run, and remain confident about the future,' the representative continued. 'We continue to use our free-to-play video games throughout most of North America, as we have for more than a decade, producing not just terrific video games, user experiences and entertainment, but also guaranteeing this is done securely, properly and at the highest level of standards.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are fairly common throughout the online social video games market (and the US more broadly), and our standard practice is that we intend to intensely protect any claim which may be brought against us.'

The issues between conventional online gambling and sweepstakes gambling establishments could 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 traditional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking unlawful sports betting 'sweeps' sites while at the very same time the leagues desire to project a strong stance against unlawful gambling - specifically when attempting to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA over accusations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes gambling establishments.
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Along with VGW, Apple and Google are being sued for hosting allegedly illegal sports betting sites

Regardless, Glaser sees sweepstakes gambling establishments as a major issue for leagues such as the NBA.

'I 'd expect that a league crackdown on professional 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 ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also disregarded to respond to DailyMail.com e-mails.

Asked if their celeb endorsers have a responsibility to explain to consumers the differences and resemblances in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative stated. 'A few of our worths are" our players come first" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes sites, sees things in a different way.

'Celebrities who provide their names to dubious illegal gambling sites are, at a minimum, putting their reputations at risk in addition to courting civil and class actions by customers who declare damage,' Glaser stated. 'There is also some risk that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for helping with prohibited gaming.'

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