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

No, they weren't personally in participation, however the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the questionable websites providing both totally free casino-style video games and financially rewarding prizes, such as cash, gift cards or cryptocurrency. In one advertisement, 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 websites are simply two cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of many video gaming corporations, not to point out claim complainants and state regulators, sweepstakes gambling establishments act as traditional casinos, just without the oversight, consumer securities and tax laws. So not just can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulative obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the business deals with accusations of illegal gaming in a New York suit that claims VGW uses star endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's statement listed below)

'I'm unsure" if you do not trust us, you can rely on 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 presenter, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a series of stars 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 provide any differences between traditional gambling and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where many - but not all - games are free

Drake has an offer with social sweeps gambling establishment, Stake, that he frequently touts on social media

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Instead, advertisements typically center around the social aspect of the casinos, while omitting the capacity for actual gaming losses.

Others tempt consumers with promises of rewards. One such operator, Stake, ran a social networks advertisement revealing off Drake's cars and trucks, aircrafts and mansions before rotating to video footage of the rap artist playing online casino-style games.

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

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

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

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

Social gambling establishments provide clients a possibility to play casino-style games with pals. Players have the alternative to purchase worthless currency frequently referred to as 'gold coins,' which can not be exchanged genuine money, but can be utilized to open numerous features within the games.

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

And therein lies the potential for financial losses, like the ones declared by complainants in Florida, Georgia, New Jersey and New York City. One player informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to buy more coins in pursuit of money and other things of value.

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

Social sweeps casino Stake ran an ad displaying Drake's automobiles, aircrafts and estates

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 seven states, which has assisted to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit customers to send mail-in ask for totally free sweeps coins, offered the gamers follow painfully specific directions. What's more, players are typically rewarded with sweeps coins merely for registering, consequently providing a reason to try their hands at any number of gambling establishment games for a chance to win - or lose - genuine money.

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

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

'Social sweepstakes video games are simply a form of online home entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is needed to play at social casinos with sweepstakes rewards. Consumers never have to spend for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is a crucial distinction between social sweeps and traditional online sports betting websites like gambling establishments.'

Think of the method that McDonald's utilizes its annual Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and fries that provide them the opportunity to win rewarding prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the video game itself does not meet the meaning of sports betting in the US.

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

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

For starters, gaming attorney Daniel Wallach points out, McDonald's Monopoly game does not run forever. Rather, it has a distinct beginning and end, thus recommending the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being utilized to promote real items like fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [gambling establishments] possess none of the attributes commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in all time, the sweepstakes casinos provide" casino-like" payments, typically 80 percent or more of profits, whereas the normal payment percentage for a short-lived marketing sweepstakes is a trivial share of the revenue earned by the company [usually less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the internet coffee shops that sprang up in Florida, offering clients the possibility to play casino-style video games for genuine prizes. A lot of those brick-and-mortar facilities have actually given that been shuttered over allegations of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos should face similar scrutiny.

'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state chief law officer as key factors in identifying that a sweepstakes promo was in reality a guise for illegal sports betting.'

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

'Consumers are being denied of securities and states are forgoing substantial tax and profits opportunities as this sports betting changes that carried out through controlled channels,' read a well-circulated AGA memo.

And after that there are the complainants who have sued social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action claim, stating the settlement was made to prevent legal costs and continued litigation.

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

In the current lawsuit, which is largely comparable to its predecessors, New york city state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful sports betting enterprise. '

Apple and Google have likewise been called as accuseds in suits for hosting the sweepstakes websites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for comment.

'We typically don't comment on matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we note that this claim has only simply been filed with the court and VGW has not been officially served.

'We have full confidence in our compliance with all laws and policies where we run, and remain confident about the future,' the representative continued. 'We continue to offer our free-to-play video games across the majority 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 also ensuring this is done safely, responsibly and at the greatest level of standards.

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

The problems in between conventional online gaming and sweepstakes gambling establishments might show troublesome for some celeb 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 traditional gaming titans like FanDuel and DraftKings.

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

It was simply eight months ago that Toronto Raptors forward Jontay Porter received a life time restriction from the NBA over claims he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being sued for hosting supposedly unlawful gambling sites

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

'I 'd expect that a league crackdown on athletes endorsing sweepstakes websites is a matter of when, not if,' Glaser included.

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

Asked if their star endorsers have a responsibility to explain to customers the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the spokesperson stated. 'A few of our worths 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 sites, sees things differently.

'Celebrities who provide their names to shady illegal gambling websites are, at a minimum, putting their credibilities at danger along with courting civil and class actions by customers who declare damage,' Glaser stated. 'There is likewise some risk that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for facilitating unlawful sports betting.'

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