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


No, they weren't personally in presence, but the world-famous stars were notably included in a slide presentation on social and sweepstakes gambling establishments - the controversial websites offering both complimentary casino-style video games and lucrative prizes, such as money, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for complimentary,' 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 claims. In the eyes of lots of video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments serve as standard gambling establishments, only without the oversight, consumer protections and tax laws. So not just can they avoid the high 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 earnings last year alone. Now the company faces accusations of prohibited sports betting in a New York lawsuit that claims VGW uses star endorsers to 'develop a veneer of legitimacy' around its item. (See VGW's statement below)


'I'm unsure" if you do not trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar illegal operations out of places 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 range of stars from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between traditional sports betting and sweepstakes play.


Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments found online


Ryan Seacrest advises fans to play at Chumba Casino, where numerous - but not all - games are complimentary


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


Find out more


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


Instead, advertisements typically center around the social element of the casinos, while omitting the potential for real gaming losses.


Others tempt consumers with promises of prizes. One such operator, Stake, ran a social networks ad showing off Drake's vehicles, airplanes and estates before rotating to footage of the rapper playing online casino-style video games.


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


Another caption explained: 'Because I never quit.'


The inconsistency in between gambling sites and social or sweepstakes casinos is a bit complicated, but operators of the latter insist they're not included 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 casinos and sportsbooks. Furthermore, according to SPGA data, the majority of the players on social-sweepstakes gambling establishments are sports betting free.


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


Social gambling establishments provide consumers an opportunity to play casino-style games with good friends. Players have the option to buy worthless currency often referred to as 'gold coins,' which can not be exchanged for genuine cash, however can be utilized to unlock numerous features within the games.


But within the world of social gambling establishments exists sweepstakes gaming, allowing customers 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 previous year after continuing to buy more coins in pursuit of money and other things of value.


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


Social sweeps casino Stake ran an advertisement displaying Drake's cars and trucks, 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 seven states, which has helped to sustain the popularity of sweepstakes gambling establishments.


Anyone over the age of 18 can access the sweepstakes sites, which do not require generally require identification. However, sites like Chumba will request IDs from gamers attempting to withdraw any funds.


Many websites, like the crypto-compatible Stake, permit customers to send mail-in ask for complimentary sweeps coins, offered the gamers follow painfully particular instructions. What's more, gamers are typically rewarded with sweeps coins merely for signing up, consequently providing a factor to attempt their hands at any number of casino video games for a chance to win - or lose - genuine cash.


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


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


'Social sweepstakes 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 have to pay for an opportunity to win rewards. That absence of a purchase requirement - or" factor to consider" - is an important distinction between social sweeps and traditional online gaming websites like casinos.'


Think about the method that McDonald's uses its annual Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're buying hamburgers and fries that provide them the opportunity to win financially rewarding rewards, such as a $1 million jackpot.


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


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


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


For starters, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game does not run forever. Rather, it has a well-defined start and end, thereby suggesting the sweepstakes is not the fast-food giant's primary product. Instead, the sweepstakes is being used to promote real items like fries, shakes, and the Filet-O-Fish.


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


'The sweepstakes [gambling establishments] have none of the qualities commonly associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos offer" casino-like" payments, generally 80 percent or more of earnings, whereas the normal payment portion for a short-lived 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 coffee shops that emerged in Florida, offering consumers the possibility to play casino-style games for genuine rewards. Much of those brick-and-mortar facilities have since been shuttered over claims of illegal sports betting.


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


Now, Wallach argues, social sweeps casinos must deal with comparable analysis.


'These differences are not arbitrary,' Wallach said of social sweeps casinos. 'They have repeatedly been pointed out by courts and state chief law officer as key consider identifying that a sweepstakes promo remained in fact a guise for unlawful sports betting.'


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


'Consumers are being denied of securities and states are giving up considerable tax and earnings chances as this sports betting replaces that performed through managed channels,' checked out a well-circulated AGA memo.


And then there are the plaintiffs who have taken legal action against social casinos in more than a lots states.


Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 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, saying the settlement was made to prevent legal expenses and continued lawsuits.


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


In the current lawsuit, which is mainly comparable to its predecessors, New York state locals 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 actually likewise been called as offenders in claims for hosting the sweepstakes sites. But unlike VGW, neither tech business reacted to DailyMail.com's demand for comment.


'We typically don't discuss matters before the courts,' a VGW representative informed DailyMail.com via e-mail. '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 guidelines where we operate, and remain positive about the future,' the spokesperson continued. 'We continue to use our free-to-play video games across most of The United States and Canada, as we have for more than a decade, developing not only great games, user experiences and entertainment, but likewise guaranteeing this is done safely, properly and at the highest level of standards.


'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly typical across the online social games industry (and the US more broadly), and our basic practice is that we mean to strongly safeguard any claim which may be brought versus us.'


The concerns in between traditional online gambling and sweepstakes gambling establishments could show bothersome for some celebrity 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 standard video gaming titans like FanDuel and DraftKings.


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


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


Along with VGW, Apple and Google are being sued for hosting supposedly prohibited sports betting websites


Regardless, Glaser sees sweepstakes casinos as a significant problem for leagues such as the NBA.


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


Neither an NBA spokesperson nor the players' agents reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to react to DailyMail.com emails.


Asked if their star endorsers have an obligation to discuss to clients the differences and resemblances between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.


'We have full self-confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the representative said. 'A few of our worths are" our gamers come initially" and" we do what's right", and we put our values at the core of everything we do.'


Glaser, an outspoken challenger of sweepstakes sites, sees things differently.


'Celebrities who lend their names to shady unlawful gambling sites are, at a minimum, putting their credibilities at danger along with courting civil and class actions by consumers who allege harm,' Glaser said. 'There is likewise some threat that state regulators and state lawyers basic rope celebrity endorsers into enforcement efforts for facilitating illegal gambling.'


New YorkNBADrakeParis Hilton