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 participation, however the world-famous stars were notably included in a slide discussion on social and sweepstakes casinos - the questionable websites offering both free casino-style video games and lucrative prizes, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet totally free,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The sites are simply two cogs in the multibillion-dollar industry that now discovers itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments serve as standard gambling establishments, just without the oversight, customer securities and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, however 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 in 2015 alone. Now the company deals with accusations of illegal gambling in a New york city suit that declares VGW uses celeb endorsers to 'produce a veneer of legitimacy' around its product. (See VGW's declaration below)

'I'm uncertain" if you do not trust us, you can trust Paris Hilton" is a winning message for business operating multibillion-dollar unlawful operations out of locations 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 range of celebrities from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom use any distinctions in between traditional gambling and sweepstakes play.

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

Ryan Seacrest prompts fans to dip into Chumba Casino, where many - however not all - games are free

Drake has a handle social sweeps gambling establishment, Stake, that he regularly touts on social networks

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Instead, advertisements typically center around the social element of the casinos, while leaving out the capacity for real sports betting losses.

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

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

Another caption described: 'Because I never quit.'

The disparity between sports betting sites and social or sweepstakes casinos is a bit complex, 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 data, the majority of the gamers on social-sweepstakes gambling establishments are playing for complimentary.

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

Social gambling establishments use customers a possibility to play casino-style games with good friends. Players have the choice to purchase worthless currency often described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to open various features within the games.

But within the world of social casinos exists sweepstakes video gaming, enabling consumers to obtain other currency referred to as 'sweeps coins' that can be exchanged for cash 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. One player informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to buy more coins in pursuit of cash and other things of value.

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

Social sweeps casino Stake ran an ad flaunting Drake's automobiles, airplanes and mansions

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

Traditional online casinos are banned in all but seven states, which has actually helped to sustain the popularity of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, permit customers to submit mail-in demands for totally free sweeps coins, supplied the gamers follow painfully specific instructions. What's more, players 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 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 competitors is simply a method of promoting their support.

'Social sweepstakes games are simply a form of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never ever have to spend for a chance to win rewards. That absence of a purchase requirement - or" consideration" - is a vital distinction between social sweeps and standard online gaming websites like casinos.'

Think of the way that McDonald's utilizes its annual Monopoly game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and fries that offer them the opportunity to win profitable rewards, such as a $1 million prize.

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

'Sweepstakes are an enduring method for promoting all type of daily services in the United States, whatever from burgers to publication subscriptions to coffee and home improvement shops,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are frequently used by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, video gaming attorney Daniel Wallach points out, McDonald's Monopoly video game does not run forever. Rather, it has a distinct start and end, thereby suggesting the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote genuine products like fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're usually not connected to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] possess none of the qualities frequently associated with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos offer" casino-like" payouts, usually 80 percent or more of incomes, whereas the common payout portion for a temporary advertising sweepstakes is a trivial share of the revenue made by the company [usually less than one percent]'

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

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

Now, Wallach argues, social sweeps casinos must deal with similar scrutiny.

'These differences are not approximate,' Wallach stated of social sweeps casinos. 'They have consistently been pointed out by courts and state chief law officer as essential elements in identifying that a sweepstakes promo was in reality a guise for unlawful sports betting.'

One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, sometimes, enact new legislation on the issue.

'Consumers are being denied of protections and states are giving up substantial tax and revenue opportunities as this sports betting replaces that conducted through regulated channels,' checked out a well-circulated AGA memo.

And then there are the plaintiffs who have actually taken legal action against social gambling establishments in more than a dozen states.

Sweepstakes casino operators paid a combined $14.2 million in 4 different cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action claim, saying 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 current suit, which is mainly comparable to its predecessors, New york city 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 'prohibited gaming enterprise. '

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

'We typically do not discuss matters before the courts,' a VGW spokesperson informed DailyMail.com via e-mail. 'However, we keep in mind that this claim has only simply been submitted with the court and VGW has not been formally served.

'We have complete confidence in our compliance with all laws and guidelines where we operate, and remain positive about the future,' the representative continued. 'We continue to use our free-to-play video games throughout the majority of North America, as we have for more than a decade, creating not just excellent games, user experiences and home entertainment, however also ensuring this is done securely, properly 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 video games market (and the US more broadly), and our standard practice is that we plan to vigorously protect any claim which might be brought against us.'

The problems in between conventional online gambling and sweepstakes casinos might show problematic for some star endorsers.

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

'It's ironic that professional athletes are hawking prohibited sports betting wagering 'sweeps' websites while at the same time the leagues desire to project a strong position against unlawful gambling - particularly when trying to tamp down the periodic gambling 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 gamblers. However, to be clear, Porter's scandal is unrelated to anything including social or sweepstakes gambling establishments.

In addition to VGW, Apple and Google are being demanded hosting supposedly illegal gambling sites

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

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

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

Asked if their star endorsers have an obligation to discuss to consumers the differences and resemblances between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial partnerships, and our company practices more broadly,' the spokesperson stated. 'A few of our values are" our gamers come first" and" we do what's right", and we put our worths at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes sites, sees things in a different way.

'Celebrities who provide their names to dubious prohibited gambling websites are, at a minimum, putting their credibilities at risk in addition to courting civil and class actions by consumers who declare harm,' Glaser stated. 'There is also some danger that state regulators and state attorney generals of the United States rope celebrity endorsers into enforcement efforts for helping with prohibited sports betting.'

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