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

No, they weren't personally in attendance, but the world-famous stars were conspicuously consisted of in a slide discussion on social and sweepstakes gambling establishments - the controversial websites providing both free casino-style games and rewarding rewards, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply 2 cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to mention suit complainants and state regulators, sweepstakes gambling establishments function as standard gambling establishments, only without the oversight, consumer securities and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, however sweepstakes operators aren't based on regulatory hurdles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits in 2015 alone. Now the business deals with accusations of unlawful gambling in a New york city suit that declares VGW utilizes star endorsers to 'develop a veneer of authenticity' around its product. (See VGW's statement listed below)

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

Sweepstakes endorsers consist of 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 provide any differences between standard gaming and sweepstakes play.

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

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

Drake has an offer with social sweeps casino, Stake, that he frequently touts on social networks

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

Others lure clients with pledges of prizes. One such operator, Stake, ran a social networks ad showing off Drake's automobiles, planes and mansions before rotating to video of the rapper playing online casino-style video games.

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

Another caption explained: 'Because I never offered up.'

The inconsistency between gaming sites and social or sweepstakes gambling establishments is a bit complicated, but operators of the latter insist they're not involved with the former.

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

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

Social casinos offer consumers a possibility to play casino-style video games with friends. Players have the option to buy worthless currency often described as 'gold coins,' which can not be exchanged for real cash, however can be utilized to unlock numerous functions within the games.

But within the world of social gambling establishments exists sweepstakes video gaming, permitting consumers to obtain other currency known as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the potential for financial losses, like the ones declared 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 gambling establishments in the past year after continuing to buy more coins in pursuit of money and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad flaunting Drake's vehicles, airplanes and mansions

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

Traditional online gambling establishments 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 need usually require identification. However, websites like Chumba will request IDs from gamers 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 particular directions. What's more, players are typically rewarded with sweeps coins merely for signing up, therefore offering them a reason to try their hands at any variety of gambling establishment games for an opportunity to win - or lose - real money.

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

According to the stakeholders, their item is the free casino-style video gaming, and the real-stakes competitors is merely a method of promoting their bread and butter.

'Social sweepstakes video games are simply a kind of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to play at social gambling establishments with sweepstakes rewards. Consumers never have to pay for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is an essential distinction in between social sweeps and traditional online gambling websites like gambling establishments.'

Think about the manner in which McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to gamble, however rather they're buying hamburgers and fries that provide them the chance to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself doesn't fulfill the meaning of gaming in the US.

'Sweepstakes are a long-standing technique for promoting all sort of everyday businesses in the United States, everything from burgers to publication memberships to coffee and home enhancement shops,' the SPGA representative told 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 market insiders, that argument doesn't cut it.

For beginners, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly game does not run indefinitely. Rather, it has a well-defined start and end, consequently 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 forever and they're normally not connected to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [gambling establishments] have none of the attributes typically connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes casinos use" casino-like" payments, usually 80 percent or more of incomes, whereas the common payment portion for a temporary marketing sweepstakes is an unimportant share of the profits earned by the company [typically less than one percent]'

Wallach fasts to liken the online social sweeps gambling establishments to the web cafes that emerged in Florida, using customers the opportunity to play casino-style games for genuine rewards. A number of those brick-and-mortar facilities have actually given that been shuttered over claims of unlawful sports betting.

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

Now, Wallach argues, social sweeps gambling establishments ought to deal with comparable scrutiny.

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have actually consistently been mentioned by courts and state chief law officer as essential consider identifying that a sweepstakes promotion was in truth a guise for prohibited gaming.'

Among the casino industry's leading trade organizations, the American Gaming Association, is now pressing legislators to investigate sweepstakes operators and, in many cases, enact new legislation on the concern.

'Consumers are being denied of securities and states are passing up significant tax and revenue opportunities as this gambling replaces that performed through controlled channels,' read a well-circulated AGA memo.

And after that there are the plaintiffs who have taken legal action against 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 misdeed, according to the . Meanwhile VGW concurred to pay $11.75 million in one class-action lawsuit, stating the settlement was made to prevent legal expenses and continued litigation.

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

In the most current suit, which is mostly 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 explained in the filing as an 'illegal sports betting business. '

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

'We generally do not talk about matters before the courts,' a VGW representative informed DailyMail.com via email. 'However, we keep in mind that this claim has only simply been filed with the court and VGW has actually not been formally served.

'We have full confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,' the representative continued. 'We continue to offer our free-to-play games throughout the majority of The United States and Canada, as we have for more than a decade, developing not just terrific video games, user experiences and entertainment, but likewise ensuring this is done securely, properly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are relatively 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 might be brought versus us.'

The concerns between standard online gambling and sweepstakes casinos could prove problematic for some celeb endorsers.

Towns, a star center with the Knicks, and the 76ers' George both endorse VGW's Global Poker brand name while the NBA is partnered with conventional gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking illegal sports betting wagering 'sweeps' sites while at the same time the leagues wish to forecast a strong stance against unlawful gambling - specifically when attempting to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being demanded hosting apparently unlawful gambling sites

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

'I 'd expect that a league crackdown on athletes backing sweepstakes websites is a matter of when, not if,' Glaser added.

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

Asked if their celeb endorsers have a responsibility to discuss to customers the differences and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that needs to be done.

'We have full self-confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the spokesperson stated. 'A few of our values are" our gamers precede" and" we do what's right", and we put our worths at the core of everything we do.'

Glaser, an outspoken challenger of sweepstakes websites, sees things in a different way.

'Celebrities who lend their names to dubious unlawful sports betting sites are, at a minimum, putting their reputations at danger as well as courting civil and class actions by customers who allege damage,' Glaser stated. 'There is likewise some risk that state regulators and state attorney generals of the United States rope star endorsers into enforcement efforts for assisting in unlawful gaming.'

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