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

No, they weren't personally in participation, but the world-famous celebrities were notably included in a slide presentation on social and sweepstakes casinos - the questionable sites providing both totally free casino-style video games and financially rewarding rewards, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet 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 finds itself besieged by suits. In the eyes of lots of gaming corporations, not to mention claim complainants and state regulators, sweepstakes casinos function as traditional casinos, only without the oversight, consumer defenses and tax laws. So not only can they prevent the steep 24-percent federal sports betting levy, but sweepstakes operators aren't based on regulative 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 business deals with accusations of prohibited gambling in a New York suit that declares VGW uses star endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's statement below)

'I'm unsure" if you do not trust us, you can trust Paris Hilton" is a winning message for business running multibillion-dollar illegal operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a variety 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 use any differences between standard gaming and sweepstakes play.

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

Ryan Seacrest urges fans to dip into Chumba Casino, where numerous - but not all - video games are complimentary

Drake has a handle social sweeps casino, Stake, that he routinely promotes on social networks

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Instead, advertisements usually center around the social element of the casinos, while leaving out the capacity for actual gambling losses.

Others lure clients with guarantees of rewards. One such operator, Stake, ran a social networks advertisement showing off Drake's cars and trucks, airplanes and estates before rotating to footage of the rap artist playing online casino-style video games.

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

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

The inconsistency in between gaming sites and social or sweepstakes gambling establishments is a bit complex, but operators of the latter insist they're not included with the former.

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), described 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 gambling establishments are playing for free.

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

Social casinos offer clients an opportunity to play casino-style games with buddies. Players have the choice to purchase valueless currency often referred to as 'gold coins,' which can not be exchanged for real money, however can be used to open various features within the games.

But within the world of social casinos exists sweepstakes gaming, permitting clients to acquire other currency called 'sweeps coins' that can be exchanged for cash or other prizes.

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

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

Social sweeps casino Stake ran an advertisement displaying Drake's cars and trucks, airplanes and estates

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 but seven states, which has actually assisted to sustain the appeal of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, enable clients to send mail-in requests for totally free sweeps coins, provided the players follow painfully particular instructions. What's more, gamers are often rewarded with sweeps coins merely for registering, thus providing a reason to attempt their hands at any number of gambling establishment video games for an opportunity to win - or lose - real cash.

So why are sweepstakes sites allowed to run in 48 states, while online gambling establishments are prohibited in all but 7?

According to the stakeholders, their item is the free casino-style gaming, and the real-stakes competitors is simply a way of promoting their support.

'Social sweepstakes video games are just a type of online home entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes rewards. Consumers never ever need to pay for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an important difference in between social sweeps and conventional online sports betting sites like casinos.'

Think of the manner in which McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and french fries that provide them the opportunity to win rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the game itself does not satisfy the meaning of gaming in the US.

'Sweepstakes are an enduring method for promoting all kinds of everyday services in the United States, whatever from burgers to magazine memberships to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are routinely used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling industry insiders, that argument doesn't cut it.

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run indefinitely. Rather, it has a well-defined start and end, thus recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're normally not connected to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [gambling establishments] have none of the attributes commonly connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payouts, typically 80 percent or more of incomes, whereas the typical payment percentage for a temporary marketing sweepstakes is an insignificant share of the profits earned by the business [normally less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the web coffee shops that emerged in Florida, providing consumers the chance to play casino-style games for genuine rewards. Many of those brick-and-mortar establishments have considering that been shuttered over allegations of unlawful gambling.

DJ Khaled is among numerous star spokespeople for VGW's Global Poker brand

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

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been pointed out by courts and state attorney generals as essential consider determining that a sweepstakes promo remained in fact a guise for prohibited gambling.'

One of the casino market's leading trade organizations, the American Gaming Association, is now pushing legislators to examine sweepstakes operators and, sometimes, enact new legislation on the problem.

'Consumers are being denied of protections and states are passing up considerable tax and profits opportunities as this sports betting replaces that carried out through managed channels,' checked out a well-circulated AGA memo.

And then there are the plaintiffs 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 admitting any wrongdoing, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal expenses and continued lawsuits.

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

In the newest claim, which is mostly 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 'unlawful gaming enterprise. '

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

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

'We have complete confidence in our compliance with all laws and guidelines where we run, and stay confident about the future,' the representative continued. 'We continue to provide our free-to-play video games throughout the majority of North America, as we have for more than a decade, creating not only terrific video games, user experiences and entertainment, but likewise ensuring this is done securely, responsibly and at the highest level of requirements.

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

The issues between standard online gambling and sweepstakes gambling establishments could show 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 standard video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting 'sweeps' sites while at the exact same time the leagues wish to predict a strong position versus illegal gaming - especially when attempting to tamp down the occasional gaming scandal,' Glaser told DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter received a lifetime restriction 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.

In addition to VGW, Apple and Google are being demanded hosting supposedly prohibited sports betting websites

Regardless, Glaser sees sweepstakes gambling establishments as a significant 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 spokesperson nor the gamers' agents reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise neglected to react to DailyMail.com e-mails.

Asked if their star endorsers have a duty to discuss to clients the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson said. 'A few of our worths are" our players precede" and" we do what's right", and we put our worths at the core of whatever we do.'

Glaser, an outspoken challenger of sweepstakes websites, sees things differently.

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

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