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

No, they weren't personally in presence, but the world-famous celebs were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable sites providing both complimentary casino-style video games and financially rewarding prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just 2 cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of many video gaming corporations, not to point out claim complainants and state regulators, sweepstakes casinos serve as traditional gambling establishments, only without the oversight, customer securities and tax laws. So not only can they avoid the steep 24-percent federal gambling levy, but sweepstakes operators aren't based on regulative obstacles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with allegations of prohibited sports betting in a New York lawsuit that claims VGW utilizes star endorsers to 'develop a veneer of authenticity' around its item. (See VGW's statement below)

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

Sweepstakes endorsers consist of a variety of celebrities from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions in between traditional sports betting and sweepstakes play.

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

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

Drake has an offer with social sweeps casino, Stake, that he frequently promotes on social networks

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Instead, advertisements usually center around the social element of the casinos, while omitting the capacity for real sports betting losses.

Others tempt customers with guarantees of prizes. One such operator, Stake, ran a social media ad displaying Drake's vehicles, planes and estates before pivoting to video footage of the rap artist playing online casino-style video games.

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

Another caption discussed: 'Because I never quit.'

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

A spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the players on social-sweepstakes casinos are playing for totally free.

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

Social gambling establishments provide clients a possibility to play casino-style games with friends. Players have the choice to purchase worthless currency often referred to as 'gold coins,' which can not be exchanged for genuine money, however can be utilized to unlock various features within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling consumers to acquire other currency called 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the capacity for monetary losses, like the ones claimed 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 casinos in the previous year after continuing to purchase more coins in pursuit of cash and other things of worth.

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

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

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

Traditional online gambling establishments are banned in all but 7 states, which has actually helped to fuel the appeal of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which don't need typically require recognition. However, websites like Chumba will ask for IDs from gamers trying to withdraw any funds.

Many sites, like the crypto-compatible Stake, enable consumers to send mail-in requests for totally free sweeps coins, provided the gamers follow painfully specific instructions. What's more, gamers are frequently rewarded with sweeps coins just for signing up, therefore giving them a reason to attempt their hands at any number of gambling establishment video games for a possibility to win - or lose - real money.

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

According to the stakeholders, their product is the complimentary casino-style gaming, and the real-stakes competition is just a way of promoting their support.

'Social sweepstakes games are simply a form of online entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is needed to dip into social casinos with sweepstakes rewards. Consumers never need to pay for a chance to win rewards. That absence of a purchase requirement - or" factor to consider" - is a crucial distinction in between social sweeps and traditional online gambling sites like casinos.'

Think of the way that McDonald's uses its yearly Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're purchasing hamburgers and fries that use them the opportunity to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the game itself doesn't meet the meaning of gambling in the US.

'Sweepstakes are an enduring method for promoting all type of everyday organizations in the United States, whatever from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are frequently utilized by a who's who of family 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 beginners, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct beginning and end, thus recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being utilized to promote real items like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're typically not tied to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] possess none of the characteristics typically connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payouts, normally 80 percent or more of profits, whereas the normal payment percentage for a momentary promotional sweepstakes is an unimportant share of the revenue earned by the business [generally less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, providing customers the chance to play casino-style games for genuine prizes. Much of those brick-and-mortar establishments have considering that been shuttered over accusations of unlawful gambling.

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

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

'These distinctions are not arbitrary,' Wallach said of social sweeps casinos. 'They have consistently been cited by courts and state attorney generals as crucial consider identifying that a sweepstakes promo was in truth a guise for unlawful sports betting.'

One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, in many cases, enact brand-new legislation on the problem.

'Consumers are being denied of securities and states are forgoing substantial tax and earnings chances as this gambling changes that conducted through controlled channels,' read 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 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 avoid legal costs and continued lawsuits.

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

In the current lawsuit, which is mainly comparable to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gambling enterprise. '

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

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

'We have full self-confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,' the spokesperson continued. 'We continue to use our free-to-play games across many of The United States and Canada, as we have for more than a decade, developing not only fantastic games, user experiences and entertainment, but also ensuring this is done securely, properly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are reasonably typical throughout 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 issues between traditional online gambling and sweepstakes gambling establishments might prove troublesome 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 standard gaming titans like FanDuel and DraftKings.

'It's paradoxical that professional athletes are hawking illegal sports betting 'sweeps' sites while at the same time the leagues desire to forecast a strong position against prohibited gaming - especially when attempting to tamp down the occasional gaming scandal,' Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter got a life time ban from the NBA over accusations he conspired with bettors. 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 presumably prohibited gambling sites

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

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

Neither an NBA spokesman nor the players' agents responded to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com emails.

Asked if their star endorsers have a responsibility to explain to customers the distinctions and resemblances in between iGaming and sweepstakes casinos, 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 company practices more broadly,' the representative stated. '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 in a different way.

'Celebrities who lend their names to dubious prohibited gambling websites are, at a minimum, putting their track records at danger along with courting civil and class actions by customers who declare damage,' Glaser stated. 'There is also some danger that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for facilitating unlawful gambling.'

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