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

No, they weren't personally in attendance, but the world-famous celebrities were conspicuously consisted of in a slide discussion on social and sweepstakes casinos - the controversial sites offering both totally free 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 anybody can 'bet free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just 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 point out suit complainants and state regulators, sweepstakes gambling establishments function as conventional gambling establishments, only without the oversight, customer protections and tax laws. So not just can they avoid the high 24-percent federal gaming levy, however sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the business deals with allegations of unlawful gaming in a New york city lawsuit that claims VGW utilizes celeb endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm not exactly sure" if you do not trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar illegal 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 variety of celebs from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom offer any differences between traditional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among numerous sweepstakes casinos found online

Ryan Seacrest prompts fans to play at Chumba Casino, where many - but not all - games are complimentary

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

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Instead, ads typically focus around the social aspect of the casinos, while omitting the capacity for actual gambling losses.

Others lure customers with guarantees of rewards. One such operator, Stake, ran a social networks ad showing off Drake's cars and trucks, airplanes and estates before pivoting to footage of the rap artist playing online casino-style video games.

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

Another caption explained: 'Because I never quit.'

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

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

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

Social casinos offer clients a chance to play casino-style games with good friends. Players have the alternative to buy worthless currency typically described as 'gold coins,' which can not be exchanged genuine money, but can be used to open numerous functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, enabling customers to get other currency referred to as 'sweeps coins' that can be exchanged for money 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 player told the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to purchase more coins in pursuit of cash and other things of value.

The Philadelphia 76ers' Paul George is seen promoting a Worldwide Poker event

Social sweeps gambling establishment Stake ran an advertisement revealing off 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 prohibited in all but seven states, which has actually helped to sustain the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, enable consumers to submit mail-in ask for free sweeps coins, provided the players follow painfully specific guidelines. What's more, gamers are typically rewarded with sweeps coins just for registering, thus giving them a factor to try their hands at any number of gambling establishment video games for a possibility to win - or lose - real money.

So why are sweepstakes websites allowed to operate in 48 states, while online gambling establishments are prohibited in all however 7?

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

'Social sweepstakes video games are just a form of online entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never need to spend for an opportunity to win rewards. That absence of a purchase requirement - or" factor to consider" - is a vital difference between social sweeps and traditional online gaming 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 bet, but rather they're buying hamburgers and french fries that offer them the chance to win lucrative prizes, such as a $1 million prize.

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

'Sweepstakes are an enduring technique for promoting all sort of daily companies in the United States, whatever from burgers to magazine memberships to coffee and home enhancement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promotions are regularly used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many gambling industry experts, that argument doesn't cut it.

For starters, gaming attorney Daniel Wallach points out, McDonald's Monopoly game does not run forever. Rather, it has a well-defined beginning and end, thus suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote genuine items like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're normally not tied to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're just money giveaways.

'The sweepstakes [gambling establishments] have none of the attributes frequently connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos provide" casino-like" payments, typically 80 percent or more of revenues, whereas the normal payout portion for a momentary marketing sweepstakes is a minor share of the revenue made by the business [usually less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that emerged in Florida, offering customers the chance to play casino-style games for real prizes. Many of those brick-and-mortar facilities have actually given that been shuttered over allegations of illegal gaming.

DJ Khaled is among a number of star spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps gambling establishments must face comparable scrutiny.

'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have consistently been cited by courts and state chief law officer as essential elements in figuring out that a sweepstakes promotion remained in reality a guise for illegal gaming.'

Among the casino market's leading trade organizations, the American Gaming Association, is now pushing legislators to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the issue.

'Consumers are being denied of defenses and states are giving up considerable tax and profits opportunities as this sports betting replaces that conducted through managed channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have taken legal action against social gambling establishments in more than a dozen states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misdeed, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal expenses and continued lawsuits.

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

In the latest suit, which is mainly comparable to its predecessors, New york city state citizens 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 'illegal gambling business. '

Apple and Google have actually likewise been called as defendants in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech company responded to DailyMail.com's ask for comment.

'We usually do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com via email. 'However, we keep in mind that this claim has actually only simply been filed with the court and VGW has actually not been officially served.

'We have complete self-confidence in our compliance with all laws and guidelines where we operate, and remain confident about the future,' the representative continued. 'We continue to use our free-to-play games across the majority of North America, as we have for more than a years, developing not only excellent video games, user experiences and entertainment, but likewise guaranteeing this is done safely, properly and at the highest level of requirements.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are relatively typical throughout the online social 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 concerns between traditional online gambling and sweepstakes casinos could prove troublesome 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 traditional video gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking illegal sports betting 'sweeps' websites while at the same time the leagues wish to predict a strong position against prohibited sports betting - specifically when attempting to tamp down the occasional gambling scandal,' Glaser informed DailyMail.com.

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

In addition to VGW, Apple and Google are being demanded hosting apparently unlawful sports betting websites

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 sites refers when, not if,' Glaser added.

Neither an NBA spokesperson nor the players' agents reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to respond to DailyMail.com emails.

Asked if their star endorsers have an obligation to discuss to clients the distinctions and resemblances between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete confidence in our influencer and ambassadorial collaborations, and our organization practices more broadly,' the spokesperson stated. 'A few of our values are" our gamers come initially" and" we do what's right", and we put our values at the core of whatever we do.'

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

'Celebrities who provide their names to dubious illegal gaming websites are, at a minimum, putting their track records at threat in addition to 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 helping with illegal gambling.'

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