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

No, they weren't personally in participation, however the world-famous celebs were notably included in a slide discussion on social and sweepstakes casinos - the questionable websites using both totally free casino-style games and profitable prizes, such as money, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for 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 market that now discovers itself besieged by lawsuits. In the eyes of many gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes gambling establishments serve as traditional casinos, only without the oversight, customer defenses and tax laws. So not only can they prevent the high 24-percent federal gaming levy, but sweepstakes operators aren't based on regulatory difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company faces allegations of prohibited gaming in a New York claim that declares VGW uses star endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm unsure" if you don't trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar prohibited operations out of locations like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of video gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a series of celebrities from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between standard sports betting and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where lots of - but not all - games are totally free

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

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Instead, ads typically focus around the social aspect of the casinos, while omitting the potential for real sports betting losses.

Others tempt customers with promises of rewards. One such operator, Stake, ran a social media advertisement flaunting Drake's cars, aircrafts and estates before rotating to footage of the rap artist playing online casino-style games.

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

Another caption discussed: 'Because I never ever offered up.'

The disparity between sports betting websites and social or sweepstakes casinos is a bit intricate, however operators of the latter insist they're not included with the former.

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

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

Social gambling establishments provide clients a chance to play casino-style video games with friends. Players have the alternative to purchase worthless currency typically described as 'gold coins,' which can not be exchanged for genuine cash, but can be utilized to unlock different functions within the video games.

But within the world of social casinos exists sweepstakes gaming, permitting consumers to obtain other currency called 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous year after continuing to purchase more coins in pursuit of money and other things of value.

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

Social sweeps gambling establishment Stake ran an ad showing off Drake's cars, planes and estates

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

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

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

Many websites, like the crypto-compatible Stake, allow consumers to send mail-in demands for free sweeps coins, offered the players follow painfully particular directions. What's more, players are typically rewarded with sweeps coins simply for registering, therefore providing a factor to attempt their hands at any number of gambling establishment games for a possibility to win - or lose - real cash.

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 totally free casino-style video gaming, and the real-stakes competitors is simply a method of promoting their support.

'Social sweepstakes games are just a type of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to dip into social casinos with sweepstakes prizes. Consumers never have to spend for a chance to win rewards. That absence of a purchase requirement - or" factor to consider" - is an important distinction in between social sweeps and standard online gambling sites like gambling establishments.'

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

And without a purchase requirement, or 'consideration', the game itself does not satisfy the definition of gambling in the US.

'Sweepstakes are an enduring technique for promoting all kinds of everyday services in the United States, whatever from burgers to magazine subscriptions to coffee and home enhancement stores,' the SPGA representative told DailyMail.com. 'Sweepstakes promotions are regularly 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 does not cut it.

For beginners, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly video game doesn't run indefinitely. Rather, it has a well-defined beginning and end, thus recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote real items like french fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're usually not connected to casino-style video games of possibility,' Wallach told DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [gambling establishments] possess none of the attributes frequently associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos offer" casino-like" payouts, typically 80 percent or more of incomes, whereas the common payout portion for a momentary marketing sweepstakes is a trivial share of the profits earned by the company [generally less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the web cafes that emerged in Florida, offering clients the opportunity to play casino-style games for genuine prizes. Much of those brick-and-mortar establishments have considering that been shuttered over allegations of prohibited gaming.

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

Now, Wallach argues, social sweeps gambling establishments ought to deal with similar analysis.

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been cited by courts and state chief law officer as essential consider figuring out that a sweepstakes promotion was in reality a guise for unlawful gaming.'

One of the gambling establishment industry's leading trade organizations, 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 denied of securities and states are forgoing considerable tax and earnings opportunities as this gaming changes that conducted through managed channels,' read a well-circulated AGA memo.

And then there are the plaintiffs who have sued social casinos in more than a lots states.

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

Michael Phelps has actually signed an offer with the VGW Group, which owns Global Poker

In the most recent lawsuit, which is mainly similar to its predecessors, New York state locals 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 likewise been named as accuseds in suits for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's demand for comment.

'We normally don't discuss matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we keep in mind that this claim has actually only simply been submitted with the court and VGW has not been officially served.

'We have full confidence in our compliance with all laws and policies where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across many of The United States and Canada, as we have for more than a years, developing not just fantastic games, user experiences and entertainment, but likewise ensuring this is done safely, responsibly and at the greatest level of requirements.

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

The problems between traditional online gaming and sweepstakes casinos could prove troublesome for some celebrity 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 conventional video gaming titans like FanDuel and DraftKings.

'It's paradoxical that expert athletes are hawking illegal sports betting 'sweeps' sites while at the same time the leagues wish to forecast a strong position versus prohibited gambling - especially when trying to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

It was simply 8 months ago that Toronto Raptors forward Jontay Porter got a lifetime ban 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 apparently prohibited gambling websites

Regardless, Glaser sees sweepstakes gambling establishments 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 added.

Neither an NBA spokesperson nor the gamers' representatives reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise overlooked to react to DailyMail.com emails.

Asked if their star endorsers have a duty to explain to clients the distinctions and resemblances in between iGaming and sweepstakes gambling establishments, VGW insisted there is nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our company 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 everything we do.'

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

'Celebrities who provide their names to dubious unlawful gaming sites are, at a minimum, putting their credibilities at danger along with courting civil and class actions by consumers who declare damage,' Glaser said. 'There is also some risk that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for helping with illegal sports betting.'

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