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 conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the controversial sites offering both free casino-style games and profitable rewards, such as money, gift cards or cryptocurrency. In one ad, 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 sites are simply two cogs in the multibillion-dollar industry that now discovers itself besieged by suits. In the eyes of many video gaming corporations, not to point out claim complainants and state regulators, sweepstakes gambling establishments function as traditional casinos, just without the oversight, customer protections and tax laws. So not just can they avoid the steep 24-percent federal gambling levy, but sweepstakes operators aren't based on regulative hurdles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the company deals with accusations of prohibited gambling in a New york city lawsuit that claims VGW uses star endorsers to 'create a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm not sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business running 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 consist of a series of stars from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any distinctions in between standard gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among many sweepstakes casinos discovered online

Ryan Seacrest advises fans to play at Chumba Casino, where numerous - however not all - video games are complimentary

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

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Instead, advertisements usually center around the social element of the gambling establishments, while omitting the potential for real gaming losses.

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

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

Another caption discussed: 'Because I never quit.'

The disparity between sports betting websites and social or sweepstakes gambling establishments is a bit complicated, but operators of the latter insist they're not involved with the previous.

A spokesperson for an industry 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, most of the gamers on social-sweepstakes casinos are playing for totally free.

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

Social casinos use customers a chance to play casino-style video games with good friends. Players have the choice to purchase valueless currency typically described as 'gold coins,' which can not be exchanged genuine money, but can be used to unlock numerous features within the video games.

But within the world of social casinos exists sweepstakes video gaming, allowing customers to get other currency called 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for financial losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York. One gamer 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 cash and other things of value.

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

Social sweeps casino Stake ran an ad revealing off Drake's cars, planes and mansions

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

Traditional online casinos are prohibited in all however 7 states, which has helped to fuel the popularity of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, enable customers to submit mail-in requests for complimentary sweeps coins, provided the players follow painfully specific guidelines. What's more, gamers are frequently rewarded with sweeps coins just for signing up, consequently providing them a factor to attempt their hands at any variety of casino games for an opportunity to win - or lose - real money.

So why are sweepstakes sites allowed 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 method of promoting their support.

'Social sweepstakes video 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 need to pay for an opportunity to win rewards. That absence of a purchase requirement - or" consideration" - is an essential distinction in between social sweeps and traditional online gambling websites like gambling establishments.'

Consider the manner in which McDonald's utilizes its annual Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and fries that use them the possibility to win lucrative rewards, such as a $1 million prize.

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

'Sweepstakes are a long-standing method for promoting all kinds of daily businesses in the United States, everything from hamburgers to publication subscriptions to coffee and home enhancement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting market insiders, that argument does not cut it.

For starters, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run forever. Rather, it has a well-defined start and end, therefore suggesting 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 forever and they're generally not connected to casino-style video games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the qualities commonly related to McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payouts, generally 80 percent or more of revenues, whereas the common payment percentage for a short-term advertising sweepstakes is a trivial share of the earnings earned by the company [usually less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, providing clients the opportunity to play casino-style video games for genuine rewards. Much of those brick-and-mortar facilities have actually considering that been shuttered over accusations of prohibited gaming.

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

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

'These differences are not arbitrary,' Wallach stated of social sweeps casinos. 'They have repeatedly been pointed out by courts and state lawyer generals as key consider determining that a sweepstakes promotion was in reality a guise for unlawful gaming.'

One of the casino industry's leading trade organizations, the American Gaming Association, is now pushing legislators to investigate sweepstakes operators and, in many cases, enact brand-new legislation on the problem.

'Consumers are being deprived of protections and states are giving up considerable tax and profits chances as this gambling changes that performed through controlled channels,' checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in four separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, saying the settlement was made to prevent legal expenses and continued lawsuits.

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

In the current lawsuit, which is mainly similar to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited sports betting enterprise. '

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

'We generally do not discuss matters before the courts,' a VGW spokesperson informed DailyMail.com through email. 'However, we note that this claim has only simply been submitted with the court and VGW has actually not been formally served.

'We have full self-confidence in our compliance with all laws and policies where we run, and remain confident about the future,' the representative continued. 'We continue to provide our free-to-play games throughout most of The United States and Canada, as we have for more than a decade, developing not only great games, user experiences and entertainment, but also ensuring this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are reasonably common throughout the online social games industry (and the US more broadly), and our basic practice is that we mean to vigorously protect any claim which may be brought against us.'

The concerns between standard online sports betting and sweepstakes casinos might 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 conventional gaming titans like FanDuel and DraftKings.

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

It was just eight months ago that Toronto Raptors forward Jontay Porter got a lifetime ban from the NBA over accusations he conspired with bettors. However, to be clear, Porter's scandal is unassociated to anything including social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being sued for hosting presumably unlawful sports betting websites

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

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

Neither an NBA spokesman nor the players' agents reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com e-mails.

Asked if their celeb endorsers have a responsibility to discuss to customers the differences and resemblances between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that requires to be done.

'We have full self-confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the spokesperson said. 'Some 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 websites, sees things differently.

'Celebrities who lend their names to dubious unlawful sports betting sites are, at a minimum, putting their credibilities at risk in addition to courting civil and class actions by consumers who declare damage,' Glaser stated. 'There is also some threat that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in prohibited gambling.'

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