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 celebrities were notably consisted of in a slide discussion on social and sweepstakes casinos - the questionable websites providing both complimentary casino-style games and rewarding prizes, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for 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 industry that now finds itself besieged by claims. In the eyes of many video gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes casinos serve as conventional casinos, just without the oversight, consumer securities and tax laws. So not just can they avoid the high 24-percent federal sports betting levy, but sweepstakes operators aren't subject to regulative hurdles like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income last year alone. Now the business faces allegations of illegal gaming in a New York suit 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 don't trust us, you can rely on Paris Hilton" is a winning message for business running 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 variety of celebs from gambling enthusiasts 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 conventional gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes casinos found 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 routinely touts on social networks

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Instead, advertisements normally center around the social element of the gambling establishments, while omitting the potential for actual gaming losses.

Others lure customers with pledges of rewards. One such operator, Stake, ran a social media advertisement flaunting Drake's vehicles, planes and estates before rotating to footage of the rap artist playing online casino-style video games.

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

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

The inconsistency between sports betting 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 spokesperson for an industry trade group, the Social and Promotional Gaming Association (SPGA), described its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the players on social-sweepstakes gambling establishments are playing for totally free.

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

Social gambling establishments offer consumers an opportunity to play casino-style games with buddies. Players have the alternative to buy valueless currency often described as 'gold coins,' which can not be exchanged genuine money, however can be used to open various functions within the games.

But within the world of social gambling establishments exists sweepstakes gaming, enabling consumers to get other currency called 'sweeps coins' that can be exchanged for cash 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. One gamer informed 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 value.

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

Social sweeps gambling establishment Stake ran an advertisement flaunting Drake's automobiles, airplanes and estates

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 but seven states, which has assisted to sustain the appeal of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, enable clients to send mail-in ask for totally free sweeps coins, offered the players follow painfully particular directions. What's more, gamers are typically rewarded with sweeps coins merely for signing up, therefore providing a factor to try their hands at any variety of gambling establishment video games for a possibility to win - or lose - genuine money.

So why are sweepstakes websites allowed to run in 48 states, while online casinos are prohibited in all but 7?
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According to the stakeholders, their product is the free casino-style gaming, and the real-stakes competition is simply a way of promoting their bread and butter.

'Social sweepstakes video games are simply a form of online home entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to play at social gambling establishments with sweepstakes rewards. Consumers never ever need to pay for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is a crucial difference in between social sweeps and traditional online gaming websites like casinos.'

Consider the way that 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 offer them the chance to win rewarding rewards, such as a $1 million prize.

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

'Sweepstakes are an enduring approach for promoting all sort of everyday businesses in the United States, everything from hamburgers to magazine memberships to coffee and home improvement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are frequently utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of sports betting market insiders, that argument does not cut it.

For beginners, gaming attorney Daniel Wallach mentions, McDonald's Monopoly video game does not run indefinitely. Rather, it has a distinct start and end, thus recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being utilized to promote real items like french fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're generally not tied to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're just cash giveaways.

'The sweepstakes [gambling establishments] have none of the characteristics frequently related to McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments offer" casino-like" payouts, generally 80 percent or more of incomes, whereas the normal payment portion for a short-lived advertising sweepstakes is a trivial share of the income earned by the business [usually less than one percent]'

Wallach is quick to liken the online social sweeps casinos to the web coffee shops that sprang up in Florida, using customers the chance to play casino-style video games for genuine prizes. A number of those brick-and-mortar establishments have actually since been shuttered over claims of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos should face comparable examination.

'These differences are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have consistently been pointed out by courts and state lawyer generals as key aspects in identifying that a sweepstakes promotion was in fact a guise for prohibited gambling.'

Among the casino market'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 deprived of defenses and states are forgoing substantial tax and earnings chances as this sports betting replaces that conducted through managed channels,' read a well-circulated AGA memo.

And after that there are the complainants who have taken legal action against 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 admitting any wrongdoing, according to the Washington Post. Meanwhile VGW concurred to pay $11.75 million in one class-action suit, stating 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 largely comparable 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 gaming business. '

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

'We typically don't comment on matters before the courts,' a VGW spokesperson informed DailyMail.com by means of email. '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 self-confidence in our compliance with all laws and guidelines where we run, and stay positive about the future,' the representative continued. 'We continue to use our free-to-play video games across many of The United States and Canada, as we have for more than a decade, developing not only excellent video games, user experiences and entertainment, but also guaranteeing this is done securely, responsibly and at the greatest level of standards.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are reasonably typical across the online social games industry (and the US more broadly), and our basic practice is that we intend to vigorously safeguard any claim which may be against us.'

The problems between conventional online sports betting and sweepstakes gambling establishments might show bothersome for some star 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 traditional video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking unlawful sports betting wagering 'sweeps' websites while at the very same time the leagues wish to project a strong position against prohibited gambling - especially when trying to tamp down the occasional 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 claims he conspired with gamblers. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes gambling establishments.

In addition to VGW, Apple and Google are being demanded hosting allegedly unlawful sports betting sites

Regardless, Glaser sees sweepstakes gambling establishments as a major problem for leagues such as the NBA.

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

Neither an NBA spokesperson nor the gamers' representatives responded to DailyMail.com's requests for remark. 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 describe to consumers the differences and resemblances 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 collaborations, and our business practices more broadly,' the representative said. 'Some of our worths are" our gamers come initially" 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.
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'Celebrities who provide their names to dubious illegal sports betting websites are, at a minimum, putting their track records at danger in addition to courting civil and class actions by customers who allege damage,' Glaser stated. 'There is also some risk that state regulators and state lawyers basic rope celebrity endorsers into enforcement efforts for facilitating illegal sports betting.'

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