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

No, they weren't personally in presence, however the world-famous celebrities were notably consisted of in a slide discussion on social and sweepstakes gambling establishments - the questionable websites providing both complimentary casino-style video games and financially rewarding prizes, such as money, present cards or cryptocurrency. In one ad, 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 sites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of many gaming corporations, not to point out claim plaintiffs and state regulators, sweepstakes casinos serve as traditional gambling establishments, just without the oversight, consumer defenses and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the business deals with allegations of prohibited sports betting in a New York claim that claims VGW uses celebrity endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's statement listed below)

'I'm uncertain" if you do not trust us, you can rely on 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 consist of a range of stars from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between conventional gaming and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where lots of - however not all - video games are complimentary

Drake has a deal with social sweeps casino, Stake, that he routinely touts on social networks

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Instead, ads normally center around the social aspect of the gambling establishments, while leaving out the capacity for real gambling losses.

Others tempt consumers with pledges of prizes. One such operator, Stake, ran a social networks ad flaunting Drake's automobiles, planes and estates before rotating to video footage of the rapper playing online casino-style video games.

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

Another caption discussed: 'Because I never quit.'

The inconsistency between gambling websites and social or sweepstakes gambling establishments is a bit complex, but 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), described its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the players on social-sweepstakes gambling establishments are playing for complimentary.

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

Social casinos provide consumers an opportunity to play casino-style games with buddies. Players have the choice to purchase worthless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, however can be used to open various features within the video games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting customers to get other currency referred to as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for monetary losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York. One gamer told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous year after continuing to purchase more coins in pursuit of money and other things of value.

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

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

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 but seven states, which has helped to sustain the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in ask for complimentary sweeps coins, provided the players follow painfully particular guidelines. What's more, players are frequently rewarded with sweeps coins merely for signing up, thus providing a reason to try their hands at any variety of casino games for a possibility to win - or lose - genuine cash.

So why are sweepstakes websites enabled to run in 48 states, while online gambling establishments are prohibited in all but 7?

According to the stakeholders, their item is the free casino-style video gaming, and the real-stakes competition is simply a way of promoting their bread and butter.

'Social sweepstakes games are merely a kind of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is required to dip into social casinos with sweepstakes rewards. Consumers never have to pay for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is an important distinction between social sweeps and conventional online gambling sites like gambling establishments.'

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

And without a purchase requirement, or 'factor to consider', the video game itself does not satisfy the definition of gaming in the US.

'Sweepstakes are an enduring approach for promoting all sort of everyday services in the United States, everything from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling industry experts, that argument does not cut it.

For starters, gaming attorney Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct start and end, thus suggesting 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 do not last permanently and they're typically not tied to casino-style games of possibility,' Wallach told DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [gambling establishments] possess none of the qualities typically related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments provide" casino-like" payouts, typically 80 percent or more of profits, whereas the normal payment percentage for a temporary advertising sweepstakes is an unimportant share of the earnings earned by the company [normally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the web coffee shops that emerged in Florida, providing clients the opportunity to play casino-style games for real prizes. A lot of those brick-and-mortar establishments have because been shuttered over allegations of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos must deal with similar scrutiny.

'These distinctions are not arbitrary,' Wallach said of social sweeps casinos. 'They have consistently been cited by courts and state attorney general of the United States as key consider figuring out that a sweepstakes promotion was in reality a guise for illegal gambling.'

One of the casino market's leading trade organizations, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in many cases, enact brand-new legislation on the issue.

'Consumers are being deprived of protections and states are forgoing substantial tax and profits opportunities as this gambling changes that performed through controlled channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have taken legal action against social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action lawsuit, stating the settlement was made to prevent legal costs and continued lawsuits.

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

In the most current suit, which is mainly similar to its predecessors, New York state locals 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 gaming business. '

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

'We typically do not talk about matters before the courts,' a VGW representative informed DailyMail.com through e-mail. 'However, we keep in mind that this claim has actually only simply been filed with the court and VGW has not been officially served.

'We have complete confidence in our compliance with all laws and policies 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, creating not only terrific video games, user experiences and entertainment, but likewise ensuring this is done safely, responsibly and at the greatest level of standards.

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

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

'It's paradoxical that expert athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues want to project 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 life time restriction from the NBA over accusations he conspired with bettors. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes casinos.

Along with VGW, Apple and Google are being sued for hosting supposedly illegal sports betting websites

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 backing sweepstakes websites is a matter of when, not if,' Glaser added.

Neither an NBA spokesperson nor the players' representatives reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com emails.

Asked if their star endorsers have a duty to discuss to clients the differences and resemblances between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'A few of our worths are" our players precede" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes sites, sees things differently.

'Celebrities who lend their names to shady illegal gaming sites are, at a minimum, putting their credibilities at danger in addition to courting civil and class actions by customers who allege harm,' Glaser said. 'There is likewise some threat that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for assisting in illegal sports betting.'

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