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 presence, but the world-famous stars were notably included in a slide discussion on social and sweepstakes casinos - the questionable websites providing both totally free casino-style video games and profitable prizes, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for 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 finds itself besieged by suits. In the eyes of many gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments serve as conventional casinos, only without the oversight, customer securities and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, but sweepstakes operators aren't subject to regulative difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits in 2015 alone. Now the business faces accusations of illegal sports betting in a New york city lawsuit that claims VGW utilizes celebrity endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's declaration listed below)

'I'm uncertain" if you do not trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar unlawful operations out of locations 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 series of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions in 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 numerous - but not all - video games are free

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

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Instead, ads generally focus around the social aspect of the casinos, while leaving out the potential for real sports betting losses.

Others lure customers with promises of rewards. One such operator, Stake, ran a social media advertisement revealing off Drake's automobiles, airplanes and mansions before rotating to video footage of the rapper playing online casino-style video games.

'Daddy, why do we have a lot money?' read the first caption on the screen.

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

The disparity between gambling sites and social or sweepstakes casinos is a bit intricate, 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), described its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes casinos are sports betting free.

'Most social sweeps customers never ever buy,' the SPGA representative told DailyMail.com. 'The minority of customers who make purchases do so in quantities far smaller sized than the typical deposit or wager size at real-money online gaming websites.'

Social casinos use customers a possibility to play casino-style games with buddies. Players have the alternative to buy valueless currency typically described as 'gold coins,' which can not be exchanged genuine money, however can be used to unlock numerous features within the video games.

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

And therein lies the potential for monetary losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York. One player told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous 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 event

Social sweeps gambling establishment Stake ran an ad showing off Drake's vehicles, aircrafts 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 however 7 states, which has assisted to sustain the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which don't need normally need recognition. However, websites 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 demands for free sweeps coins, offered the gamers follow painfully specific directions. What's more, players are typically rewarded with sweeps coins simply for signing up, therefore providing a reason to attempt their hands at any variety of casino video games for a chance to win - or lose - genuine cash.

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

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

'Social sweepstakes video games are merely a type of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never have to spend for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is a vital distinction between social sweeps and traditional online sports betting sites like gambling establishments.'

Think of the manner in which McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that use them the chance to win rewarding prizes, such as a $1 million jackpot.

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

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

But to lots of sports betting industry experts, that argument doesn't cut it.

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

'They do not last permanently and they're typically not connected to casino-style video games of chance,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] have none of the attributes frequently connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payments, generally 80 percent or more of earnings, whereas the common payout portion for a short-lived promotional sweepstakes is an insignificant share of the revenue made by the business [normally less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the web cafes that emerged in Florida, offering customers the chance to play casino-style games for real rewards. A number of those brick-and-mortar facilities have given that been shuttered over claims of illegal gambling.

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

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

'These distinctions are not arbitrary,' Wallach said of social sweeps casinos. 'They have actually repeatedly been cited by courts and state attorney general of the United States as essential factors in identifying that a sweepstakes promotion remained in fact a guise for illegal sports betting.'

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

'Consumers are being deprived of defenses and states are forgoing significant tax and earnings chances as this gambling changes that conducted through controlled channels,' checked out a well-circulated AGA memo.

And then 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 separate cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal expenses and continued litigation.

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

In the current suit, which is largely similar to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'unlawful gambling enterprise. '

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

'We normally do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we note that this claim has actually only just been filed with the court and VGW has actually not been formally 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 use our free-to-play video games throughout most of North America, as we have for more than a years, producing not just excellent video games, user experiences and home entertainment, but also guaranteeing this is done safely, properly and at the greatest level of requirements.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are relatively common across the online social video games market (and the US more broadly), and our standard practice is that we intend to strongly defend any claim which might be brought against us.'

The concerns in between traditional online sports betting and sweepstakes gambling establishments might show problematic for some celeb endorsers.

Towns, a star center with the Knicks, and the 76ers' George both back VGW's Global Poker brand name 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 wagering 'sweeps' websites while at the very same time the leagues wish to project a strong position versus unlawful gaming - particularly when trying to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

It was simply eight months ago that Toronto Raptors forward Jontay Porter got a lifetime restriction from the NBA over accusations he conspired with gamblers. However, to be clear, Porter's scandal is unassociated to anything involving social or sweepstakes casinos.

In addition to VGW, Apple and Google are being taken legal action against for hosting supposedly unlawful sports betting websites

Regardless, Glaser sees sweepstakes gambling establishments as a major issue for leagues such as the NBA.

'I 'd expect that a league crackdown on athletes endorsing sweepstakes sites refers 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 emails.

Asked if their celebrity endorsers have an obligation to describe to consumers the distinctions and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative said. 'A few of our worths are" our gamers come initially" and" we do what's right", and we put our worths at the core of whatever we do.'

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

'Celebrities who lend their names to dubious unlawful gambling sites are, at a minimum, putting their reputations at threat along with courting civil and class actions by consumers who declare damage,' Glaser said. 'There is likewise some risk that state regulators and state chief law officers rope star endorsers into enforcement efforts for facilitating prohibited gambling.'

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