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

No, they weren't personally in presence, but the world-famous stars were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable sites offering both totally free casino-style video games and rewarding rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for complimentary,' 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 industry that now finds itself besieged by claims. In the eyes of numerous video gaming corporations, not to discuss lawsuit plaintiffs and state regulators, sweepstakes casinos act as conventional casinos, only without the oversight, customer defenses and tax laws. So not only can they avoid the high 24-percent federal gambling 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 profits last year alone. Now the company deals with accusations of illegal gaming in a New York claim that claims VGW uses celebrity endorsers to 'create a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm unsure" if you don't trust us, you can rely on Paris Hilton" is a winning message for business running multibillion-dollar illegal operations out of places 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 include a series of stars from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences in between traditional gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments found online

Ryan Seacrest prompts fans to dip into Chumba Casino, where many - however not all - video games are totally free

Drake has a handle social sweeps gambling establishment, Stake, that he routinely promotes on social media

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Instead, advertisements generally center around the social element of the casinos, while omitting the potential for real gambling losses.

Others tempt customers with guarantees of prizes. One such operator, Stake, ran a social networks advertisement revealing off Drake's automobiles, airplanes and estates before rotating to footage of the rapper playing online casino-style video games.

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

Another caption discussed: 'Because I never offered up.'

The inconsistency in between gaming websites and social or sweepstakes gambling establishments is a bit intricate, 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), discussed 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 casinos are sports betting complimentary.

'Most social sweeps clients never ever buy,' the SPGA representative told DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller sized than the normal deposit or wager size at real-money online gambling websites.'

Social casinos provide consumers a possibility to play casino-style games with buddies. Players have the choice to buy valueless currency frequently referred to as 'gold coins,' which can not be exchanged genuine cash, however can be used to unlock different functions within the games.

But within the world of social casinos exists sweepstakes video gaming, permitting customers 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 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 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 revealing off 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 but 7 states, which has helped to fuel the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes sites, which do not require generally require identification. However, sites like Chumba will ask for IDs from players attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in requests for free sweeps coins, supplied the gamers follow painfully particular guidelines. What's more, players are often rewarded with sweeps coins merely for signing up, thus giving them a factor to attempt their hands at any variety of casino video games for a possibility to win - or lose - real cash.

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 merely a way of promoting their support.

'Social sweepstakes games are simply a type of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never have to pay for a chance to win rewards. That absence of a purchase requirement - or" factor to consider" - is a crucial distinction between social sweeps and conventional online sports betting sites like casinos.'

Consider the manner in which McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and french fries that provide them the chance to win lucrative prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the game itself doesn't satisfy the definition of gaming in the US.

'Sweepstakes are an enduring method for promoting all kinds of daily organizations in the United States, whatever from hamburgers to magazine memberships to coffee and home enhancement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are routinely used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a well-defined beginning and end, consequently recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote real products like fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [gambling establishments] have none of the attributes frequently connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments provide" casino-like" payouts, usually 80 percent or more of incomes, whereas the normal payment percentage for a momentary promotional sweepstakes is a minor share of the income earned by the business [usually less than one percent]'

Wallach is fast to compare the online social sweeps casinos to the internet coffee shops that emerged in Florida, providing customers the opportunity to play casino-style video games for real rewards. A number of those brick-and-mortar establishments have given that been shuttered over accusations of prohibited sports betting.

DJ Khaled is amongst a number of celebrity spokespeople for VGW's Global Poker brand

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

'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually consistently been cited by courts and state chief law officer as essential factors in figuring out that a sweepstakes promo remained in reality a guise for prohibited gaming.'

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

'Consumers are being deprived of protections and states are forgoing significant tax and profits chances as this gaming replaces that conducted 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 dozen states.

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

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

In the latest suit, which is mostly similar to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gaming enterprise. '

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

'We generally do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we keep in mind that this claim has actually only just been filed with the court and VGW has actually not been officially served.

'We have complete self-confidence in our compliance with all laws and policies where we run, and stay confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout the majority of The United States and Canada, as we have for more than a decade, creating not only excellent video games, user experiences and home entertainment, however also guaranteeing this is done securely, responsibly and at the greatest level of requirements.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are relatively typical across the online social games market (and the US more broadly), and our basic practice is that we plan to vigorously safeguard any claim which may be brought against us.'

The concerns between traditional online sports betting and sweepstakes casinos might show bothersome for some star endorsers.

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

'It's paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' sites while at the exact same time the leagues desire to predict a strong position against prohibited gambling - particularly 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 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 casinos.

Together with VGW, Apple and Google are being demanded hosting supposedly 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 sites refers when, not if,' Glaser added.

Neither an NBA representative nor the players' representatives reacted to DailyMail.com's requests for comment. 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 explain to consumers the distinctions and similarities in between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'Some of our values are" our gamers precede" 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 sports betting websites are, at a minimum, putting their credibilities at risk as well as courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for assisting in unlawful gaming.'

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