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

No, they weren't personally in presence, but the world-famous celebrities were conspicuously included in a slide discussion on social and sweepstakes casinos - the questionable websites providing both complimentary casino-style games and lucrative rewards, such as money, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet complimentary,' 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 discovers itself besieged by suits. In the eyes of many gaming corporations, not to mention claim complainants and state regulators, sweepstakes gambling establishments serve as conventional casinos, only without the oversight, customer securities and tax laws. So not only can they avoid the high 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company deals with accusations of illegal sports betting in a New York suit that claims VGW utilizes celebrity endorsers to 'produce a veneer of legitimacy' around its item. (See VGW's declaration listed below)

'I'm not exactly sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for companies operating multibillion-dollar unlawful operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a range of celebrities 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 in between conventional sports betting and sweepstakes play.

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

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

Drake has an offer with social sweeps casino, Stake, that he routinely touts on social media

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Instead, advertisements generally center around the social aspect of the casinos, while omitting the potential for real sports betting losses.

Others lure consumers with guarantees of prizes. One such operator, Stake, ran a social media advertisement displaying Drake's cars, aircrafts and mansions before rotating to video of the rap artist playing online casino-style games.

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

Another caption described: 'Because I never provided up.'

The discrepancy between gaming 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), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, many of the gamers on social-sweepstakes gambling establishments are playing for totally free.

'Most social sweeps customers never buy,' the SPGA spokesperson informed DailyMail.com. 'The minority of clients who make purchases do so in amounts far smaller sized than the normal deposit or wager size at real-money online sports betting websites.'

Social gambling establishments provide consumers a chance to play casino-style video games with buddies. Players have the option to buy worthless currency typically described as 'gold coins,' which can not be exchanged genuine money, but can be utilized to open different features within the video games.

But within the world of social casinos exists sweepstakes gaming, enabling clients to acquire 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 declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the past 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 Global Poker occasion

Social sweeps gambling establishment Stake ran an ad displaying Drake's cars and trucks, planes and mansions

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

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

Anyone over the age of 18 can access the sweepstakes websites, which don't require normally require recognition. However, sites like Chumba will ask for IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, allow customers to submit mail-in ask for free sweeps coins, offered the players follow painfully particular instructions. What's more, players are typically rewarded with sweeps coins merely for registering, consequently giving them a reason to attempt their hands at any variety of gambling establishment games for a possibility to win - or lose - genuine money.

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

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

'Social sweepstakes games are just a form of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is required to dip into social gambling establishments with sweepstakes rewards. Consumers never ever need to spend for an opportunity to win rewards. That lack of a purchase requirement - or" factor to consider" - is a vital difference between social sweeps and standard online gambling sites like casinos.'

Think about the way that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and french fries that provide them the opportunity to win lucrative prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the game itself doesn't satisfy the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all sort of daily organizations in the United States, whatever from hamburgers to magazine memberships to coffee and home enhancement stores,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are frequently 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 does not cut it.

For starters, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly video game does not run indefinitely. 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 utilized to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They don't last forever and they're generally not connected to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] have none of the attributes frequently related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payouts, generally 80 percent or more of revenues, whereas the normal payment portion for a short-term advertising sweepstakes is an unimportant share of the revenue earned by the company [usually less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the web coffee shops that sprang up in Florida, using consumers the chance to play casino-style games for genuine rewards. A number of those brick-and-mortar facilities have considering that been shuttered over claims of prohibited sports betting.

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

Now, Wallach argues, social sweeps casinos need to face similar analysis.

'These distinctions are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually repeatedly been cited by courts and state chief law officer as key consider determining that a sweepstakes promotion remained in reality a guise for illegal gambling.'

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

'Consumers are being deprived of securities and states are forgoing considerable tax and income opportunities as this gambling replaces that conducted through controlled channels,' read a well-circulated AGA memo.

And then there are the complainants who have actually sued social gambling establishments in more than a dozen states.

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

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

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

Apple and Google have also been named as defendants in suits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's demand for comment.

'We usually do not discuss matters before the courts,' a VGW spokesperson informed DailyMail.com by means of e-mail. 'However, we note that this claim has only simply been submitted with the court and VGW has actually not been officially served.

'We have full self-confidence in our compliance with all laws and regulations where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout the majority of North America, as we have for more than a years, producing not only fantastic video games, user experiences and home entertainment, however also ensuring this is done securely, properly and at the greatest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are relatively typical throughout the online social video games industry (and the US more broadly), and our standard practice is that we mean to strongly protect any claim which might be brought against us.'

The issues between standard online gaming and sweepstakes gambling establishments might prove problematic for some star 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 standard gaming titans like FanDuel and DraftKings.

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

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

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

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

'I 'd expect that a league crackdown on professional athletes backing sweepstakes sites refers when, not if,' Glaser added.

Neither an NBA spokesperson nor the gamers' representatives responded to DailyMail.com's requests 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 responsibility to explain to consumers 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 partnerships, and our company practices more broadly,' the spokesperson 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 opponent of sweepstakes sites, sees things in a different way.

'Celebrities who provide their names to shady prohibited gambling sites are, at a minimum, putting their track records at risk as well as courting civil and class actions by customers who allege harm,' Glaser said. 'There is likewise some risk that state regulators and state lawyers general rope star endorsers into enforcement efforts for helping with illegal sports betting.'

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