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

No, they weren't personally in attendance, but the world-famous stars were notably included in a slide presentation on social and sweepstakes casinos - the controversial sites providing both free casino-style video games and rewarding prizes, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet free,' 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 industry that now finds itself besieged by claims. In the eyes of lots of video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos act as standard casinos, only without the oversight, customer securities and tax laws. So not just can they avoid the high 24-percent federal sports betting levy, but sweepstakes operators aren't subject to regulative difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the company deals with accusations of illegal gaming in a New York lawsuit that declares VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its product. (See VGW's declaration below)

'I'm not sure" 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 speaker, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

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

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

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

Drake has an offer with social sweeps gambling establishment, Stake, that he regularly touts on social networks

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Instead, ads generally focus around the social element of the casinos, while omitting the potential for actual sports betting losses.

Others tempt clients with promises of rewards. One such operator, Stake, ran a social networks advertisement revealing off Drake's cars, airplanes and mansions before pivoting to video of the rapper playing online casino-style games.

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

Another caption explained: 'Because I never ever quit.'

The discrepancy between gambling websites and social or sweepstakes gambling establishments is a bit complicated, however operators of the latter insist they're not included with the former.

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

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

Social casinos offer consumers an opportunity to play casino-style video games with friends. Players have the alternative to purchase worthless currency often described as 'gold coins,' which can not be exchanged genuine money, but can be utilized to unlock numerous functions within the games.

But within the world of social casinos exists sweepstakes gaming, allowing consumers to get other currency referred to as 'sweeps coins' that can be exchanged for cash 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 gamer 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 money and other things of worth.

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

Social sweeps casino Stake ran an ad flaunting Drake's vehicles, planes and estates

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

Traditional online gambling establishments are prohibited in all however seven states, which has actually helped to fuel the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, allow consumers to submit mail-in demands for free sweeps coins, offered the gamers follow painfully particular instructions. What's more, players are typically rewarded with sweeps coins just for registering, thus providing a reason to attempt their hands at any variety of casino video games for an opportunity to win - or lose - genuine cash.

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

According to the stakeholders, their product is the free casino-style gaming, and the real-stakes competitors is just a means of promoting their bread and butter.

'Social sweepstakes games are simply a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social casinos with sweepstakes rewards. Consumers never need to spend for an opportunity 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 casinos.'

Think of the way that McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that use them the chance to win rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself does not fulfill the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all type of everyday organizations in the United States, whatever from hamburgers to publication subscriptions to coffee and home improvement shops,' 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 lots of gambling market insiders, that argument doesn't cut it.

For starters, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct start and end, thus suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're typically not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [gambling establishments] possess none of the qualities commonly connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payments, usually 80 percent or more of revenues, whereas the common payout percentage for a momentary marketing sweepstakes is an unimportant share of the earnings made by the company [usually 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 customers the possibility to play casino-style games for genuine prizes. A lot of those brick-and-mortar establishments have because been shuttered over claims of prohibited gaming.

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

Now, Wallach argues, social sweeps casinos need to deal with comparable analysis.

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have repeatedly been cited by courts and state attorney general of the United States as crucial elements in figuring out that a sweepstakes promo was in reality a guise for unlawful gaming.'

Among the casino market's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in some cases, enact new legislation on the issue.

'Consumers are being deprived of securities and states are passing up significant tax and earnings chances as this gaming changes that performed through managed channels,' checked out a well-circulated AGA memo.

And then there are the complainants who have sued social casinos in more than a dozen 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 consented to pay $11.75 million in one class-action claim, saying the settlement was made to prevent legal expenses and continued litigation.

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

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

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

'We generally don't discuss matters before the courts,' a VGW representative told DailyMail.com by means of email. 'However, we note that this claim has only simply been filed with the court and VGW has actually not been formally served.

'We have complete confidence in our compliance with all laws and regulations where we operate, and remain confident about the future,' the representative continued. 'We continue to use 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 just terrific games, user experiences and home entertainment, but likewise guaranteeing this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are fairly common across the online social video games industry (and the US more broadly), and our standard practice is that we plan to vigorously protect any claim which might be brought versus us.'

The problems in between traditional online gaming and sweepstakes casinos could show troublesome for some celeb 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 professional athletes are hawking prohibited sports betting 'sweeps' websites while at the same time the leagues desire to forecast a strong position against prohibited sports betting - especially when attempting to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

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

Together with VGW, Apple and Google are being sued for hosting allegedly unlawful gambling websites

Regardless, Glaser sees sweepstakes gambling establishments as a significant concern for leagues such as the NBA.

'I 'd anticipate that a league crackdown on athletes endorsing sweepstakes sites refers when, not if,' Glaser added.

Neither an NBA spokesperson nor the players' representatives responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com e-mails.

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

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the representative said. 'A few of our values are" our gamers 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 sites, sees things differently.

'Celebrities who provide their names to shady prohibited gaming websites are, at a minimum, putting their reputations at risk in addition to courting civil and class actions by customers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state chief law officers rope celeb endorsers into enforcement efforts for assisting in prohibited gambling.'

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