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

No, they weren't personally in attendance, however the world-famous celebs were notably consisted of in a slide presentation on social and sweepstakes casinos - the questionable websites using both free casino-style games and profitable prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are just two cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of numerous video gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes gambling establishments function as conventional gambling establishments, only without the oversight, customer protections and tax laws. So not only can they avoid the high 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulative obstacles 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 accusations of illegal sports betting in a New York suit that declares VGW uses celeb endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's statement below)

'I'm not sure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies operating 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, told DailyMail.com.

Sweepstakes endorsers include a variety of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions between traditional gaming and sweepstakes play.

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

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

Drake has a handle social sweeps casino, Stake, that he regularly touts on social media

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Instead, ads generally center around the social aspect of the gambling establishments, while omitting the capacity for real gaming losses.

Others lure consumers with pledges of rewards. One such operator, Stake, ran a social media advertisement flaunting Drake's cars, planes and estates before rotating to video footage of the rapper playing online casino-style games.

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

Another caption described: 'Because I never gave up.'

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

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

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

Social gambling establishments use clients an opportunity to play casino-style games with good friends. Players have the alternative to purchase worthless currency often referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be used to unlock different functions within the video games.

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

And therein lies the potential 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 past year after continuing to purchase more coins in pursuit of cash and other things of value.

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

Social sweeps casino Stake ran an advertisement displaying Drake's cars, aircrafts and mansions

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

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

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

Many websites, like the crypto-compatible Stake, enable consumers to submit mail-in requests for totally free sweeps coins, supplied the gamers follow painfully particular guidelines. What's more, players are frequently rewarded with sweeps coins just for registering, therefore providing them a factor to try their hands at any variety of gambling establishment video games for a chance to win - or lose - genuine money.

So why are sweepstakes sites allowed to run in 48 states, while online casinos are banned in all but 7?

According to the stakeholders, their product is the totally free casino-style video gaming, and the real-stakes competition is merely a means of promoting their bread and butter.

'Social sweepstakes video games are simply a kind of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. is needed to dip into social casinos with sweepstakes rewards. Consumers never need to pay for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is a vital difference between social sweeps and standard online sports betting websites like casinos.'

Think of the way 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 offer them the possibility to win lucrative rewards, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing approach for promoting all kinds of everyday companies in the United States, whatever from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling market experts, that argument does not cut it.

For beginners, video gaming lawyer Daniel Wallach explains, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a distinct beginning and end, therefore suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real products like french fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [casinos] have none of the characteristics typically associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payments, usually 80 percent or more of revenues, whereas the normal payout percentage for a short-term advertising sweepstakes is an insignificant share of the profits earned by the company [generally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the web coffee shops that sprang up in Florida, providing clients the chance to play casino-style games for genuine prizes. Much of those brick-and-mortar establishments have since been shuttered over allegations of prohibited sports betting.

DJ Khaled is among a number of celeb spokespeople for VGW's Global Poker brand

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

'These distinctions are not arbitrary,' Wallach stated of social sweeps casinos. 'They have actually repeatedly been cited by courts and state chief law officer as essential consider determining that a sweepstakes promotion remained in fact a guise for illegal gambling.'

Among the gambling establishment market's leading trade companies, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, in many cases, enact new legislation on the concern.

'Consumers are being denied of securities and states are giving up substantial tax and revenue opportunities as this gambling changes that conducted through managed channels,' read a well-circulated AGA memo.

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

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

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

In the newest claim, 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 'illegal gaming enterprise. '

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

'We normally do not comment on matters before the courts,' a VGW representative told DailyMail.com by means of e-mail. 'However, we note that this claim has actually only simply been filed with the court and VGW has not been officially served.

'We have complete 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 games across most of The United States and Canada, as we have for more than a decade, developing not only terrific games, user experiences and home entertainment, but likewise ensuring this is done securely, properly and at the greatest level of standards.

'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 vigorously protect any claim which might be brought versus us.'

The issues in between standard online gambling and sweepstakes casinos 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 while the NBA is partnered with traditional video gaming titans like FanDuel and DraftKings.

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

It was simply 8 months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over allegations he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes gambling establishments.

Together with VGW, Apple and Google are being demanded hosting allegedly illegal gambling websites

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

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

Neither an NBA spokesperson nor the gamers' representatives reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to react to DailyMail.com e-mails.

Asked if their celeb endorsers have a responsibility to explain to customers the distinctions and similarities between iGaming and sweepstakes gambling establishments, VGW insisted there is 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 said. 'A few 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 websites, sees things in a different way.

'Celebrities who lend their names to dubious illegal gaming sites are, at a minimum, putting their credibilities at risk as well as courting civil and class actions by consumers who allege damage,' Glaser stated. 'There is also some risk that state regulators and state lawyers basic rope celebrity endorsers into enforcement efforts for facilitating unlawful gambling.'

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