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

No, they weren't personally in participation, but the world-famous celebrities were notably consisted of in a slide presentation on social and sweepstakes casinos - the questionable websites providing both free casino-style games and financially rewarding prizes, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for totally 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 lawsuits. In the eyes of many gaming corporations, not to mention lawsuit complainants and state regulators, sweepstakes casinos function as standard gambling establishments, only without the oversight, consumer defenses and tax laws. So not only can they prevent the steep 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company faces allegations of illegal gambling in a New york city claim that claims VGW uses celeb endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm uncertain" if you do not trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar prohibited 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 series of stars from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences between conventional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes casinos discovered online

Ryan Seacrest advises 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 frequently promotes on social media

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Instead, ads generally center around the social aspect of the gambling establishments, while leaving out the potential for actual gambling losses.

Others tempt consumers with pledges of prizes. One such operator, Stake, ran a social media advertisement flaunting Drake's automobiles, aircrafts and mansions before pivoting to footage of the rap artist playing online casino-style video games.

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

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

The inconsistency between sports betting websites and social or sweepstakes casinos is a bit complex, however operators of the latter insist they're not included with the former.

A representative for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, many of the players on social-sweepstakes casinos are sports betting free.

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

Social casinos offer consumers an opportunity to play casino-style games with pals. Players have the choice to purchase valueless currency often referred to as 'gold coins,' which can not be exchanged genuine money, however can be utilized to open different features within the video games.

But within the world of social casinos exists sweepstakes gaming, enabling consumers to acquire other currency called 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the potential for financial 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 casinos in the previous year after continuing to buy more coins in pursuit of cash and other things of value.

The Philadelphia 76ers' Paul George is seen promoting an International Poker event

Social sweeps casino Stake ran an ad flaunting Drake's cars, aircrafts and estates

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 but 7 states, which has actually assisted to sustain the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes websites, which do not need normally require identification. However, sites like Chumba will request IDs from gamers trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in requests for complimentary sweeps coins, supplied the gamers follow painfully specific directions. What's more, gamers are typically rewarded with sweeps coins just for registering, thereby providing a reason to attempt their hands at any variety of casino games for a possibility to win - or lose - genuine money.

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

According to the stakeholders, their product is the complimentary casino-style video gaming, and the real-stakes competitors is simply a means of promoting their support.

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

Think of the manner in which McDonald's utilizes its yearly 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 profitable prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the game itself doesn't meet the definition of sports betting in the US.

'Sweepstakes are a long-standing technique for promoting all type of daily businesses in the United States, whatever from hamburgers to magazine subscriptions to coffee and home improvement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are routinely used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling market insiders, that argument does not cut it.

For starters, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined beginning and end, consequently suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine products like french fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're normally not connected to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] have none of the attributes commonly associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments provide" casino-like" payments, usually 80 percent or more of earnings, whereas the common payment percentage for a momentary promotional sweepstakes is a trivial share of the profits earned by the company [usually less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the web cafes that sprang up in Florida, using clients the chance to play casino-style video games for real rewards. Much of those brick-and-mortar facilities have actually considering that been shuttered over accusations of illegal gaming.

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

Now, Wallach argues, social sweeps gambling establishments ought to face similar examination.

'These distinctions are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually consistently been cited by courts and state attorney general of the United States as crucial factors in figuring out that a sweepstakes promo was in fact a guise for unlawful sports betting.'

One of the casino industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being denied of defenses and states are forgoing significant tax and profits opportunities as this gaming changes that conducted through managed channels,' read 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 casino operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, stating the settlement was made to avoid legal expenses and continued litigation.

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

In the current suit, which is mainly comparable to its predecessors, New York state locals Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited sports betting enterprise. '

Apple and Google have also been named as accuseds in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company responded to DailyMail.com's ask for comment.

'We normally do not talk about matters before the courts,' a VGW spokesperson informed DailyMail.com via e-mail. 'However, we note that this claim has only simply been submitted with the court and VGW has actually not been formally served.

'We have complete self-confidence in our compliance with all laws and guidelines where we operate, and stay positive about the future,' the representative continued. 'We continue to use our free-to-play video games across the majority of North America, as we have for more than a years, producing not only great video games, user experiences and home entertainment, however also guaranteeing this is done safely, responsibly and at the greatest level of requirements.

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

The issues in between traditional online sports betting and sweepstakes gambling establishments could show bothersome 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 traditional video gaming titans like FanDuel and DraftKings.

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

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

Along with VGW, Apple and Google are being demanded hosting supposedly illegal gambling websites

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

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

Neither an NBA representative nor the players' representatives reacted to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com emails.

Asked if their star endorsers have an obligation to discuss to clients the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the spokesperson stated. 'Some of our values are" our players come first" and" we do what's right", and we put our values at the core of everything we do.'

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

'Celebrities who lend their names to dubious illegal sports betting websites are, at a minimum, putting their credibilities at risk as well as courting civil and class actions by customers who declare harm,' Glaser stated. 'There is also some risk that state regulators and state lawyers general rope star endorsers into enforcement efforts for assisting in prohibited gaming.'

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