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, however the world-famous celebs were notably included in a slide presentation on social and sweepstakes gambling establishments - the questionable websites using both complimentary casino-style games and lucrative prizes, such as cash, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'play for free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are just 2 cogs in the multibillion-dollar market that now finds itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to point out lawsuit complainants and state regulators, sweepstakes casinos function as conventional gambling establishments, only without the oversight, consumer defenses and tax laws. So not only can they prevent the high 24-percent federal gambling levy, but sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming securities.

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

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

Sweepstakes endorsers include a variety of stars 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 use any distinctions in between conventional sports betting and .

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

Ryan Seacrest advises fans to play at Chumba Casino, where numerous - however not all - games are totally free

Drake has a handle social sweeps casino, Stake, that he regularly promotes on social media

Learn more

Donald Trump 'set to call NBA group owner as US ambassador to Italy'

Instead, advertisements usually center around the social element of the casinos, while leaving out the potential for actual gambling losses.

Others lure consumers with guarantees of prizes. One such operator, Stake, ran a social media ad displaying Drake's vehicles, airplanes and mansions before pivoting to video footage of the rapper playing online casino-style video games.

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

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

The discrepancy between gaming sites and social or sweepstakes gambling establishments is a bit complicated, however operators of the latter insist they're not included with the previous.

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

'Most social sweeps clients never buy,' the SPGA spokesperson informed DailyMail.com. 'The minority of consumers who make purchases do so in quantities far smaller than the common deposit or wager size at real-money online gambling sites.'

Social casinos use clients a chance to play casino-style video games with pals. Players have the option to purchase valueless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to open various functions within the games.

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

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 gambling establishments in the past 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 occasion

Social sweeps casino Stake ran an advertisement 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 prohibited in all however 7 states, which has actually helped to sustain the popularity of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, permit consumers to submit mail-in requests for totally free sweeps coins, offered the gamers follow painfully particular guidelines. What's more, players are frequently rewarded with sweeps coins just for signing up, thus providing them a factor to attempt their hands at any number of gambling establishment video games for an opportunity to win - or lose - real money.

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

According to the stakeholders, their item is the totally free casino-style gaming, and the real-stakes competition is simply a method of promoting their support.

'Social sweepstakes video games are merely a kind of online home entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is required to play at social gambling establishments with sweepstakes prizes. Consumers never ever need to pay for a chance to win rewards. That absence of a purchase requirement - or" factor to consider" - is a crucial difference between social sweeps and standard online gaming sites like gambling establishments.'

Consider 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 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 game itself does not fulfill the meaning of sports betting in the US.
bit.ly
'Sweepstakes are an enduring approach for promoting all kinds of daily services in the United States, everything from hamburgers to publication memberships to coffee and home improvement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling industry insiders, that argument does not cut it.

For beginners, gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a well-defined start and end, thus recommending 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 permanently and they're generally not tied to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [gambling establishments] possess none of the qualities frequently associated with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payments, generally 80 percent or more of incomes, whereas the common payment percentage for a temporary marketing sweepstakes is a minor share of the revenue earned by the business [usually less than one percent]'

Wallach fasts to compare the online social sweeps casinos to the internet cafes that sprang up in Florida, offering consumers the possibility to play casino-style games for real prizes. A number of those brick-and-mortar establishments have actually considering that been shuttered over allegations of unlawful gambling.

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

Now, Wallach argues, social sweeps gambling establishments ought to face similar examination.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually consistently been cited by courts and state chief law officer as key consider identifying that a sweepstakes promo was in reality a guise for prohibited gaming.'
bet9ja.com
One of the casino industry's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in many cases, enact brand-new legislation on the issue.

'Consumers are being denied of defenses and states are giving up considerable tax and income chances as this gaming replaces that carried out through managed channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs who have sued social gambling establishments in more than a dozen states.

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

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

In the latest lawsuit, which is mainly similar to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited sports betting enterprise. '

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

'We typically don't talk about matters before the courts,' a VGW representative informed DailyMail.com via e-mail. 'However, we note that this claim has actually only simply been submitted with the court and VGW has actually not been formally served.

'We have full confidence in our compliance with all laws and policies where we operate, and remain confident about the future,' the representative 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, creating not just fantastic games, user experiences and entertainment, however also ensuring this is done safely, responsibly and at the highest level of requirements.
bit.ly
'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are reasonably common across the online social video games market (and the US more broadly), and our standard practice is that we mean to intensely protect any claim which might be brought versus us.'

The concerns between standard online gambling and sweepstakes gambling establishments might prove troublesome for some star 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 ironic that expert athletes are hawking unlawful sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to project a strong position versus illegal gambling - particularly when attempting to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

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

Together with VGW, Apple and Google are being taken legal action against for hosting allegedly prohibited gambling sites

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

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

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

Asked if their celeb endorsers have an obligation to discuss to customers the differences and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial partnerships, and our service practices more broadly,' the representative said. 'Some of our worths are" our players 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 websites, sees things in a different way.
bit.ly
'Celebrities who lend their names to dubious unlawful gambling websites are, at a minimum, putting their credibilities at risk as well as courting civil and class actions by consumers who declare damage,' Glaser said. 'There is likewise some risk that state regulators and state attorneys basic rope celeb endorsers into enforcement efforts for assisting in prohibited gaming.'

New YorkNBADrakeParis Hilton