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

No, they weren't personally in presence, but the world-famous celebrities were conspicuously included in a slide presentation on social and sweepstakes casinos - the questionable sites using both totally free casino-style games and financially rewarding prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are just 2 cogs in the multibillion-dollar market that now discovers itself besieged by suits. In the eyes of numerous video gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes gambling establishments serve as traditional gambling establishments, just without the oversight, customer securities and tax laws. So not just can they prevent the steep 24-percent federal gambling levy, however 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 allegations of illegal sports betting in a New York lawsuit that claims VGW utilizes celeb 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 trust Paris Hilton" is a winning message for companies operating multibillion-dollar prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a series of stars from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between traditional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments discovered online

Ryan Seacrest prompts fans to play at Chumba Casino, where lots of - however not all - games are free

Drake has a handle social sweeps gambling establishment, Stake, that he frequently touts on social networks

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Instead, advertisements typically focus around the social aspect of the casinos, while omitting the potential for real gaming losses.

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

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

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

The inconsistency between gaming sites and social or sweepstakes casinos is a bit intricate, but operators of the latter insist they're not involved with the previous.

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

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

Social casinos use consumers an opportunity to play casino-style games with pals. Players have the option to buy worthless currency often referred to as 'gold coins,' which can not be exchanged genuine cash, but can be used to open numerous functions within the video games.

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

And therein lies the capacity for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York City. One player 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 event

Social sweeps gambling establishment Stake ran an advertisement displaying Drake's automobiles, 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 prohibited in all however 7 states, which has assisted to fuel the appeal of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, allow clients to send mail-in ask for free sweeps coins, provided the players follow painfully specific directions. What's more, players are often rewarded with sweeps coins just for registering, thereby providing a factor to try their hands at any variety of gambling establishment games for a chance to win - or lose - genuine money.

So why are sweepstakes websites permitted to run in 48 states, while online casinos 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 just a method of promoting their support.

'Social sweepstakes games are just a type of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes rewards. Consumers never need to spend for an opportunity to win rewards. That absence of a purchase requirement - or" factor to consider" - is a crucial distinction in between social sweeps and conventional online gambling websites like gambling establishments.'

Think of the way that McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to bet, 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 'factor to consider', the game itself does not meet the meaning of sports betting in the US.

'Sweepstakes are an enduring approach for promoting all kinds of daily companies in the United States, everything from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA representative informed 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 lots of sports betting industry experts, that argument does not cut it.

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly game does not run forever. Rather, it has a well-defined beginning and end, thus suggesting the sweepstakes is not the fast-food giant's main product. 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 usually not connected to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] have none of the qualities typically related to McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payouts, typically 80 percent or more of profits, whereas the normal payment portion for a momentary marketing sweepstakes is a minor share of the income made by the business [normally less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the internet coffee shops that sprang up in Florida, offering consumers the chance to play casino-style video games for real prizes. Much of those brick-and-mortar facilities have considering that been shuttered over allegations of prohibited gambling.

DJ Khaled is amongst numerous celeb spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos need to face comparable scrutiny.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have consistently been pointed out by courts and state attorney general of the United States as crucial factors in determining that a sweepstakes promo remained in truth a guise for prohibited gambling.'

One of the gambling establishment market's leading trade companies, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being deprived of protections and states are forgoing considerable tax and revenue chances as this sports betting replaces that performed through regulated channels,' read a well-circulated AGA memo.

And then there are the plaintiffs who have actually taken legal action against social casinos in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to avoid legal expenses and continued litigation.

Michael Phelps has actually signed an offer with the VGW Group, which owns Global Poker

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

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

'We usually do not talk about matters before the courts,' a VGW representative told DailyMail.com by means of email. 'However, we keep in mind that this claim has actually only just been submitted with the court and VGW has not been formally served.

'We have complete confidence in our compliance with all laws and guidelines where we run, and remain confident about the future,' the representative continued. 'We continue to use our free-to-play games throughout many of North America, as we have for more than a decade, creating not just great games, user experiences and entertainment, but also ensuring this is done safely, responsibly and at the greatest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly typical throughout the online social games market (and the US more broadly), and our standard practice is that we mean to intensely safeguard any claim which may be brought versus us.'

The problems between traditional online gambling and sweepstakes gambling establishments could prove troublesome for some star endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand while the NBA is partnered with conventional gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking unlawful sports betting wagering 'sweeps' sites while at the very same time the leagues wish to predict a strong position versus unlawful gambling - especially when trying to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

It was simply 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.

Together with VGW, Apple and Google are being sued for hosting allegedly unlawful gambling websites

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

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

Neither an NBA spokesman nor the gamers' agents responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also ignored to react to DailyMail.com emails.

Asked if their celebrity endorsers have an obligation to explain to consumers the distinctions and similarities between iGaming and sweepstakes casinos, VGW insisted there is nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative stated. 'A few of our worths are" our gamers precede" and" we do what's right", and we put our worths at the core of everything we do.'

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

'Celebrities who lend their names to dubious unlawful gaming websites are, at a minimum, putting their credibilities at threat in addition to courting civil and class actions by consumers who allege harm,' Glaser stated. 'There is also some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for assisting in prohibited gambling.'

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