The smiling faces of Paris Hilton and Ryan Seacrest made surprise looks before the Louisiana Senate for Friday's hearing on unlawful gaming.

No, they weren't personally in attendance, but the world-famous celebrities were notably included in a slide presentation on social and sweepstakes gambling establishments - the controversial sites offering 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 free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply 2 cogs in the multibillion-dollar market that now discovers itself besieged by suits. In the eyes of numerous gaming corporations, not to point out lawsuit plaintiffs and state regulators, sweepstakes casinos serve as traditional casinos, just without the oversight, consumer securities and tax laws. So not just can they prevent the steep 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with accusations of prohibited gambling in a New York lawsuit that claims VGW utilizes star endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's statement listed below)

'I'm not sure" 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 gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebrities from sports betting enthusiasts 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 in between conventional gambling and sweepstakes play.

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

Ryan Seacrest advises fans to play at Chumba Casino, where many - however not all - games are complimentary

Drake has a handle social sweeps casino, Stake, that he frequently promotes on social networks

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Instead, ads typically focus around the social element of the gambling establishments, while omitting the potential for real gaming losses.

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

'Daddy, why do we have a lot cash?' read the very first caption on the screen.

Another caption discussed: 'Because I never quit.'

The disparity in between gambling websites and social or sweepstakes casinos is a bit complicated, however operators of the latter insist they're not included with the former.

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, the majority of the gamers on social-sweepstakes casinos are playing for complimentary.

'Most social sweeps consumers never make a purchase,' the SPGA representative told DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller than the normal deposit or wager size at real-money online sports betting sites.'

Social gambling establishments provide clients a possibility to play casino-style games with good friends. Players have the option to purchase valueless currency typically described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to open numerous functions within the games.

But within the world of social gambling establishments exists sweepstakes gaming, permitting consumers to acquire 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 declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer 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 cash and other things of worth.

The Philadelphia 76ers' Paul George is seen promoting a Global Poker event

Social sweeps casino Stake ran an advertisement showing off Drake's cars and trucks, 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 7 states, which has assisted to sustain the appeal of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, permit clients to submit mail-in requests for free sweeps coins, provided the gamers follow painfully particular instructions. What's more, gamers are typically rewarded with sweeps coins just for signing up, thus providing them a reason to attempt their hands at any variety of gambling establishment video games for an opportunity to win - or lose - genuine money.

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 gaming, and the real-stakes competitors is just a method of promoting their support.

'Social sweepstakes video games are just a form of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never ever have to pay for a chance to win prizes. That absence of a purchase requirement - or" factor to consider" - is a crucial distinction between social sweeps and conventional online gaming websites like gambling establishments.'

Think of the manner in which McDonald's uses its annual Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're purchasing hamburgers and french fries that use them the opportunity to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the game itself does not satisfy the meaning of sports betting in the US.

'Sweepstakes are a long-standing approach for promoting all kinds of daily services in the United States, everything from burgers to magazine memberships to coffee and home improvement shops,' the SPGA spokesperson 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 many sports betting industry insiders, that argument doesn't cut it.

For starters, gaming attorney Daniel Wallach mentions, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct start and end, therefore recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real items like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're normally not tied to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're just cash free gifts.

'The sweepstakes [casinos] have none of the qualities commonly connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos offer" casino-like" payments, typically 80 percent or more of profits, whereas the common payment portion for a short-lived promotional sweepstakes is a minor share of the earnings made by the business [generally less than one percent]'

Wallach is quick to liken the online social sweeps casinos to the web cafes that sprang up in Florida, providing customers the chance to play casino-style games for genuine prizes. A number of those brick-and-mortar establishments have because been shuttered over allegations of unlawful sports betting.

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

Now, Wallach argues, social sweeps casinos should face similar examination.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have actually repeatedly been pointed out by courts and state attorney general of the United States as essential consider identifying that a sweepstakes promo was in truth a guise for illegal gambling.'

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

'Consumers are being denied of securities and states are forgoing substantial tax and earnings opportunities as this sports betting changes that conducted through managed channels,' read a well-circulated AGA memo.

And after that there are the complainants who have actually sued social gambling establishments in more than a lots states.

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal expenses and continued lawsuits.

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

In the most recent suit, which is mainly 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 described in the filing as an 'unlawful sports betting enterprise. '

Apple and Google have actually also been named as offenders in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's request for remark.

'We normally do not comment on matters before the courts,' a VGW spokesperson told DailyMail.com by means of email. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has actually not been officially served.

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

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are fairly common throughout the online social 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 between conventional online sports betting and sweepstakes gambling establishments could show 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 standard video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking prohibited sports betting wagering 'sweeps' sites while at the same time the leagues want to project a strong stance against unlawful gaming - particularly when attempting to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a life time ban from the NBA over accusations 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 sued for hosting allegedly unlawful gambling sites

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

'I 'd expect that a league crackdown on athletes backing sweepstakes sites is a matter of when, not if,' Glaser added.

Neither an NBA spokesman nor the players' representatives reacted to DailyMail.com's ask 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 star endorsers have an obligation to discuss to customers the distinctions and similarities between iGaming and sweepstakes casinos, VGW insisted there is nothing more that needs to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our company practices more broadly,' the representative stated. 'Some of our worths 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 in a different way.

'Celebrities who lend their names to shady illegal sports betting sites are, at a minimum, putting their track records at danger along with courting civil and class actions by customers who declare harm,' Glaser said. 'There is likewise some danger 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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