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, however the world-famous celebs were notably included in a slide presentation on social and sweepstakes casinos - the questionable websites using both complimentary casino-style games and financially rewarding prizes, such as cash, gift 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 sites are just 2 cogs in the multibillion-dollar market that now discovers itself besieged by lawsuits. In the eyes of many video gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes gambling establishments function as standard casinos, only without the oversight, customer securities and tax laws. So not only can they avoid the high 24-percent federal gaming levy, but sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the business deals with accusations of unlawful sports betting in a New York claim that declares VGW utilizes celeb 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 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 speaker, Howard Glaser of gaming corporation Light & Wonder, informed DailyMail.com.

Sweepstakes endorsers include a variety of celebs from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between conventional gambling and sweepstakes play.

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

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

Drake has an offer with social sweeps gambling establishment, Stake, that he frequently promotes on social media

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Instead, advertisements normally focus around the social aspect of the gambling establishments, while omitting the capacity for real gambling losses.

Others tempt clients with guarantees of prizes. One such operator, Stake, ran a social media advertisement flaunting Drake's automobiles, airplanes and estates before pivoting to video of the rap artist playing online casino-style games.

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

Another caption explained: 'Because I never ever provided up.'

The disparity in between sports betting sites and social or sweepstakes casinos is a bit complicated, but operators of the latter insist they're not included with the previous.

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

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

Social gambling establishments use clients a chance to play casino-style video games with buddies. Players have the alternative to buy worthless currency often referred to as 'gold coins,' which can not be exchanged for genuine money, however can be utilized to open numerous features within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, enabling 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 City. One player informed the Washington Post he lost more than $100,000 on sweepstakes gambling establishments 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 occasion

Social sweeps casino Stake ran an ad showing off Drake's cars and trucks, planes and mansions

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

Traditional online casinos are prohibited in all however seven states, which has helped to fuel the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, allow consumers to submit mail-in demands for free sweeps coins, provided the gamers follow painfully specific instructions. What's more, gamers are typically rewarded with sweeps coins simply for registering, therefore providing a reason to try their hands at any number of casino games for a possibility to win - or lose - real money.

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 product is the totally free casino-style gaming, and the real-stakes competition is merely a method of promoting their support.

'Social sweepstakes video games are simply a type of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is needed to dip into social gambling establishments with sweepstakes rewards. Consumers never have to spend for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is an important distinction in between social sweeps and traditional online sports betting websites like gambling establishments.'

Consider the manner in which McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and french fries that use them the opportunity to win rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the video game itself does not meet the definition of gambling in the US.

'Sweepstakes are an enduring method for promoting all type of daily services in the United States, whatever from hamburgers to publication memberships to coffee and home improvement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are routinely utilized 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 market experts, that argument doesn't cut it.

For beginners, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game doesn't run forever. Rather, it has a distinct beginning and end, thereby recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real products like fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're generally not tied to casino-style video games of opportunity,' Wallach told DailyMail.com. 'They're just money free gifts.

'The sweepstakes [gambling establishments] possess none of the qualities frequently connected with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payouts, generally 80 percent or more of revenues, whereas the normal payout portion for a temporary advertising sweepstakes is a trivial share of the profits earned by the company [typically less than one percent]'

Wallach fasts to liken the online social sweeps casinos to the internet cafes that emerged in Florida, offering clients the chance to play casino-style video games for real prizes. A number of those brick-and-mortar facilities have given that been shuttered over claims of illegal sports betting.

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

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

'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been cited by courts and state chief law officer as essential consider determining that a sweepstakes promo remained in truth a guise for prohibited gambling.'

Among the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, in some cases, enact brand-new legislation on the issue.

'Consumers are being denied of securities and states are forgoing substantial tax and earnings opportunities as this gaming replaces that carried out through controlled channels,' checked out a well-circulated AGA memo.

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

Sweepstakes casino operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, stating the settlement was made to avoid legal costs and continued lawsuits.

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

In the most current suit, which is largely similar to its predecessors, New York state residents 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 sports betting business. '

Apple and Google have also been named as defendants in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's ask for remark.

'We typically don't discuss matters before the courts,' a VGW spokesperson informed DailyMail.com via email. 'However, we keep in mind that this claim has only simply been submitted with the court and VGW has actually not been officially served.

'We have full confidence in our compliance with all laws and guidelines where we operate, and stay confident about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games throughout the majority of North America, as we have for more than a decade, producing not just terrific games, user experiences and home entertainment, however also ensuring this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are relatively common across the online social games market (and the US more broadly), and our basic practice is that we intend to intensely safeguard any claim which may be brought versus us.'

The concerns between conventional online gaming and sweepstakes casinos might prove problematic for some celebrity 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 ironic that professional athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues wish to forecast a strong stance against illegal sports betting - particularly when attempting to tamp down the periodic gaming scandal,' Glaser told DailyMail.com.

It was just 8 months ago that Toronto Raptors forward Jontay Porter received a life time restriction from the NBA over allegations he conspired with bettors. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes gambling establishments.

Along with VGW, Apple and Google are being demanded hosting supposedly unlawful sports betting websites

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

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

Neither an NBA representative nor the gamers' agents reacted to DailyMail.com's ask for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also ignored to react to DailyMail.com emails.

Asked if their celeb endorsers have a duty to discuss to customers the distinctions and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is 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 said. 'Some of our worths are" our gamers come first" 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 prohibited sports betting websites are, at a minimum, putting their reputations at risk as well as courting civil and class actions by customers who allege damage,' Glaser said. 'There is also some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for facilitating prohibited gambling.'

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