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

No, they weren't personally in presence, however the world-famous stars were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable sites providing both free casino-style games and lucrative prizes, such as cash, gift cards or cryptocurrency. In one ad, 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 market that now discovers itself besieged by suits. In the eyes of numerous video gaming corporations, not to discuss lawsuit plaintiffs and state regulators, sweepstakes casinos act as traditional casinos, only without the oversight, consumer protections and tax laws. So not only can they avoid the steep 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the business deals with allegations of unlawful sports betting in a New York claim that declares VGW uses star endorsers to 'develop a veneer of legitimacy' around its product. (See VGW's statement 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 illegal 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 consist of a variety of stars from sports betting 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 conventional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among many sweepstakes casinos discovered online

Ryan Seacrest urges fans to dip into Chumba Casino, where many - but not all - video games are complimentary

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

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Instead, advertisements normally center around the social aspect of the casinos, while omitting the capacity for actual sports betting losses.

Others lure consumers with promises of rewards. One such operator, Stake, ran a social networks advertisement displaying Drake's cars, airplanes and estates before pivoting to video of the rapper playing online casino-style games.

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

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

The inconsistency in between sports betting sites and social or sweepstakes casinos is a bit complex, however 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), explained its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the gamers on social-sweepstakes gambling establishments are sports betting totally free.

'Most social sweeps clients never ever purchase,' the SPGA spokesperson told DailyMail.com. 'The minority of clients who make purchases do so in quantities far smaller sized than the normal deposit or bet size at real-money online sports betting sites.'

Social gambling establishments offer consumers a chance to play casino-style games with good friends. Players have the choice to purchase worthless currency frequently referred to as 'gold coins,' which can not be exchanged genuine money, but can be utilized to unlock various features within the games.

But within the world of social casinos exists sweepstakes gaming, enabling clients to obtain other currency known 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 complainants 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 previous year after continuing to purchase more coins in pursuit of cash and other things of value.

The Philadelphia 76ers' Paul George is seen promoting an International Poker occasion

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

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 fuel the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which don't need usually need identification. However, websites like Chumba will ask for IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, allow customers to submit mail-in requests for complimentary sweeps coins, provided the players follow painfully particular guidelines. What's more, gamers are frequently rewarded with sweeps coins just for registering, thus providing a factor to try their hands at any variety of casino games for a chance to win - or lose - genuine cash.

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

According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competitors is just a method of promoting their support.

'Social sweepstakes games are just a kind of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to dip into social casinos with sweepstakes prizes. Consumers never need to pay for a chance to win prizes. That lack of a purchase requirement - or" factor to consider" - is a crucial distinction in between social sweeps and standard online gambling websites like gambling establishments.'

Think about the method that McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and fries that offer them the opportunity to win lucrative prizes, such as a $1 million prize.

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

'Sweepstakes are a long-standing method for promoting all sort of daily companies in the United States, everything from burgers to magazine subscriptions to coffee and home improvement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are regularly used by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting industry experts, that argument does not cut it.

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

'They do not last permanently and they're normally not tied to casino-style games of possibility,' Wallach informed DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [gambling establishments] possess none of the attributes commonly connected with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payouts, generally 80 percent or more of incomes, whereas the typical payout percentage for a short-lived promotional sweepstakes is a minor share of the earnings made by the business [usually less than one percent]'

Wallach is fast to compare the online social sweeps casinos to the web cafes that emerged in Florida, providing clients the possibility to play casino-style games for real prizes. A number of those brick-and-mortar establishments have because been shuttered over allegations of unlawful gambling.

DJ Khaled is among several celebrity spokespeople for VGW's Global Poker brand

Now, Wallach argues, social sweeps casinos ought to deal with similar examination.

'These distinctions are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually consistently been mentioned by courts and state lawyer generals as key consider figuring out that a sweepstakes promotion remained in truth a guise for unlawful sports betting.'

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

'Consumers are being denied of securities and states are forgoing significant tax and earnings opportunities as this betting changes that performed through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the complainants who have actually sued social gambling establishments in more than a lots states.

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

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

In the latest claim, which is mostly comparable to its predecessors, New york city state citizens 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 'prohibited gambling enterprise. '

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

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

'We have complete self-confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games throughout most of North America, as we have for more than a decade, creating not just excellent games, user experiences and home entertainment, however also guaranteeing this is done safely, properly and at the highest level of requirements.

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

The concerns in between standard online gaming and sweepstakes casinos might show 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 conventional video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking illegal sports betting wagering 'sweeps' sites while at the exact same time the leagues desire to project a strong stance against prohibited sports betting - particularly when trying 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 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.

Together with VGW, Apple and Google are being taken legal action against for hosting presumably illegal sports betting websites

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

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

Neither an NBA spokesman nor the players' representatives reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also ignored to react to DailyMail.com e-mails.

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

'We have complete confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative stated. 'A few 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 lend their names to dubious prohibited gambling websites are, at a minimum, putting their reputations at threat as well as courting civil and class actions by customers who declare damage,' Glaser said. 'There is likewise some threat that state regulators and state attorneys basic rope star endorsers into enforcement efforts for helping with prohibited gambling.'

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