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 celebs were notably included in a slide presentation on social and sweepstakes casinos - the controversial websites using both totally free casino-style video games and lucrative rewards, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply two cogs in the multibillion-dollar market that now discovers itself besieged by lawsuits. In the eyes of many gaming corporations, not to point out claim plaintiffs and state regulators, sweepstakes casinos function as standard casinos, only without the oversight, customer protections and tax laws. So not just can they prevent the steep 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulative 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 company deals with accusations of illegal sports betting in a New york city claim that claims VGW uses celeb endorsers to 'develop a veneer of authenticity' around its product. (See VGW's statement below)

'I'm uncertain" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar prohibited 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 series of celebs from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions between traditional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes casinos found online

Ryan Seacrest prompts fans to dip into Chumba Casino, where numerous - but not all - games are free

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

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Instead, advertisements typically center around the social element of the casinos, while leaving out the capacity for actual sports betting losses.

Others lure clients with guarantees of prizes. One such operator, Stake, ran a social media ad displaying Drake's vehicles, aircrafts and mansions before pivoting to footage of the rapper playing online casino-style games.

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

Another caption discussed: 'Because I never ever gave up.'

The disparity in between sports betting sites and social or sweepstakes casinos is a bit intricate, but operators of the latter insist they're not included with the former.

A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA data, most of the gamers on social-sweepstakes gambling establishments are sports betting complimentary.

'Most social sweeps consumers never purchase,' the SPGA representative informed DailyMail.com. 'The minority of customers who make purchases do so in amounts far smaller sized than the common deposit or wager size at real-money online sports betting websites.'

Social casinos use consumers a chance to play casino-style games with good friends. Players have the option to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to open numerous features within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing consumers to obtain other currency called 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the potential for financial losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York City. 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 money and other things of value.

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

Social sweeps gambling establishment Stake ran an ad flaunting Drake's cars and trucks, planes and mansions

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

Traditional online gambling establishments are banned in all however 7 states, which has assisted to sustain the appeal of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which don't require usually need identification. However, websites like Chumba will ask for IDs from players trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow customers to send mail-in ask for complimentary sweeps coins, supplied the gamers follow painfully specific instructions. What's more, players are typically rewarded with sweeps coins just for registering, thus providing them a factor to attempt their hands at any variety of gambling establishment games for an opportunity to win - or lose - real cash.

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

According to the stakeholders, their product is the complimentary casino-style video gaming, and the real-stakes competition is just a method of promoting their bread and butter.

'Social sweepstakes games are just a kind of online entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never ever have to spend for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an important difference in between social sweeps and conventional online gambling sites like gambling establishments.'

Think about the method that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that use them the opportunity to win lucrative rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the video game itself does not fulfill the meaning of gaming in the US.

'Sweepstakes are a long-standing approach for promoting all kinds of everyday businesses in the United States, everything from burgers to magazine subscriptions to coffee and home improvement stores,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are routinely utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling industry experts, that argument doesn't cut it.

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game doesn't run forever. Rather, it has a distinct start and end, thereby suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're normally not tied to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the qualities commonly related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, typically 80 percent or more of incomes, whereas the common payment percentage for a temporary advertising sweepstakes is a minor share of the revenue earned by the business [typically less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the web cafes that sprang up in Florida, using consumers the opportunity to play casino-style video games for real prizes. A lot of those brick-and-mortar facilities have actually because been shuttered over claims of prohibited gaming.

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

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

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually repeatedly been pointed out by courts and state attorney general of the United States as essential consider figuring out that a sweepstakes promotion remained in truth a guise for prohibited gaming.'

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

'Consumers are being denied of securities and states are forgoing substantial tax and earnings chances as this gambling replaces that carried out through regulated channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have taken legal action against social casinos in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four separate cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal costs and continued lawsuits.

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

In the latest lawsuit, which is largely similar to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'illegal gaming enterprise. '

Apple and Google have likewise been named as accuseds in suits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for remark.

'We generally don't talk about matters before the courts,' a VGW spokesperson told DailyMail.com by means of email. 'However, we keep in mind that this claim has 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 guidelines where we run, and remain positive about the future,' the representative continued. 'We continue to provide our free-to-play video games across the majority of The United States and Canada, as we have for more than a decade, producing not only great games, user experiences and entertainment, however likewise ensuring this is done safely, properly and at the greatest level of requirements.

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

The problems between traditional online gaming and sweepstakes casinos 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 while the NBA is partnered with conventional video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting 'sweeps' websites while at the very same time the leagues wish to forecast a strong position versus prohibited gambling - especially when trying to tamp down the periodic gambling scandal,' Glaser told DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter got a lifetime ban from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes casinos.

In addition to VGW, Apple and Google are being sued for hosting presumably unlawful sports betting websites

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

'I 'd anticipate that a league crackdown on professional athletes backing sweepstakes websites refers when, not if,' Glaser added.

Neither an NBA representative 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 overlooked to react to DailyMail.com e-mails.

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

'We have full confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the representative stated. 'A few of our values are" our gamers come initially" 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.

'Celebrities who lend their names to dubious illegal gaming websites are, at a minimum, putting their track records at threat in addition to courting civil and class actions by customers who declare harm,' Glaser said. 'There is likewise some threat that state regulators and state lawyers general rope celebrity endorsers into enforcement efforts for facilitating illegal gambling.'

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