The smiling faces of Paris Hilton and Ryan Seacrest made surprise appearances 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 discussion on social and sweepstakes gambling establishments - the controversial sites offering both free casino-style 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 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 industry that now finds itself besieged by claims. In the eyes of many video gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes casinos serve as conventional casinos, just without the oversight, customer securities and tax laws. So not only can they prevent the steep 24-percent federal gambling levy, however sweepstakes operators aren't based on regulative obstacles 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 company deals with allegations of unlawful sports betting in a New york city claim that claims VGW uses celeb endorsers to 'create a veneer of authenticity' around its product. (See VGW's declaration listed below)


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


Sweepstakes endorsers consist of a range of celebs 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 differences between traditional sports betting and sweepstakes play.


Paris Hilton is seen plugging Wow Vegas, one of many sweepstakes gambling establishments found online


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


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


Find out more


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


Instead, ads generally center around the social aspect of the casinos, while leaving out the potential for actual gaming losses.


Others tempt customers with promises of rewards. One such operator, Stake, ran a social media ad flaunting Drake's vehicles, aircrafts and estates before rotating to video footage of the rapper playing online casino-style games.




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


Another caption discussed: 'Because I never quit.'


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


A spokesperson for a market 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, the majority of the gamers on social-sweepstakes casinos are sports betting totally free.


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


Social gambling establishments use consumers a chance to play casino-style games with good friends. Players have the option to purchase worthless currency typically referred to as 'gold coins,' which can not be exchanged genuine cash, however can be used to open numerous functions within the games.


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


And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer informed the Washington Post he lost more than $100,000 on sweepstakes casinos in the previous year after continuing to purchase more coins in pursuit of cash and other things of value.


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


Social sweeps gambling establishment Stake ran an ad revealing off Drake's cars and trucks, airplanes and mansions


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


Traditional online gambling establishments are banned in all however 7 states, which has assisted to sustain the popularity of sweepstakes casinos.


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


Many sites, like the crypto-compatible Stake, permit consumers to send mail-in requests for complimentary sweeps coins, offered the gamers follow painfully specific instructions. What's more, gamers are typically rewarded with sweeps coins merely for signing up, thereby providing a factor to try their hands at any number of casino video games for a chance to win - or lose - genuine money.


So why are sweepstakes sites permitted to run in 48 states, while online casinos are prohibited in all but 7?


According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competitors is just a means of promoting their bread and butter.


'Social sweepstakes games are simply a kind of online entertainment,' an SPGA spokesperson informed DailyMail.com by email. 'No purchase is needed to dip into social casinos with sweepstakes prizes. Consumers never ever need to spend for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is an essential distinction between social sweeps and standard online gaming websites like gambling establishments.'


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


And without a purchase requirement, or 'consideration', the game itself doesn't fulfill the meaning of sports betting in the US.


'Sweepstakes are a long-standing technique for promoting all type of daily businesses in the United States, whatever from burgers to magazine memberships to coffee and home enhancement stores,' the SPGA spokesperson informed DailyMail.com. 'Sweepstakes promotions are frequently used by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'


But to numerous sports betting industry insiders, that argument doesn't cut it.


For starters, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly game does not run indefinitely. Rather, it has a distinct beginning and end, thereby recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being utilized to promote real products like french fries, shakes, and the Filet-O-Fish.


'They don't last permanently and they're normally not connected to casino-style games of possibility,' Wallach told DailyMail.com. 'They're simply money giveaways.


'The sweepstakes [casinos] possess none of the attributes frequently associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments use" casino-like" payouts, usually 80 percent or more of profits, whereas the typical payout portion for a temporary marketing sweepstakes is an insignificant share of the profits made by the company [usually less than one percent]'


Wallach is quick to compare the online social sweeps gambling establishments to the internet cafes that sprang up in Florida, providing consumers the opportunity to play casino-style video games for genuine prizes. Much of those brick-and-mortar establishments have since been shuttered over allegations of prohibited gambling.


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


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


'These differences are not approximate,' Wallach said of social sweeps casinos. 'They have actually consistently been cited by courts and state attorney general of the United States as essential consider figuring out that a sweepstakes promo remained in truth a guise for prohibited gambling.'


Among the gambling establishment market's leading trade companies, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.


'Consumers are being denied of protections and states are giving up substantial tax and profits opportunities as this gaming changes that conducted through managed channels,' checked out a well-circulated AGA memo.


And then there are the complainants who have actually sued social gambling establishments in more than a lots states.


Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misdeed, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action lawsuit, saying the settlement was made to avoid legal expenses and continued litigation.


Michael Phelps has signed an offer with the VGW Group, which owns Global Poker


In the most current lawsuit, which is mainly comparable to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gaming enterprise. '


Apple and Google have likewise been named as offenders in suits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's ask for comment.


'We typically don't discuss matters before the courts,' a VGW spokesperson informed DailyMail.com via email. 'However, we keep in mind that this claim has actually only just been submitted with the court and VGW has not been officially served.


'We have complete confidence in our compliance with all laws and policies where we run, and remain positive about the future,' the spokesperson continued. 'We continue to offer our free-to-play video games across the majority of The United States and Canada, as we have for more than a years, creating not just excellent video games, user experiences and home entertainment, but likewise guaranteeing this is done securely, responsibly and at the highest level of requirements.


'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are fairly common throughout the online social video games market (and the US more broadly), and our basic practice is that we mean to intensely safeguard any claim which might be brought against us.'


The issues between standard online sports betting and sweepstakes casinos could prove bothersome for some celeb 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 traditional video gaming titans like FanDuel and DraftKings.


'It's ironic that expert athletes are hawking illegal sports betting wagering 'sweeps' websites while at the exact same time the leagues wish to predict a strong stance against unlawful gambling - particularly when trying to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.


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


In addition to VGW, Apple and Google are being sued for hosting apparently 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 endorsing sweepstakes websites is a matter of when, not if,' Glaser included.


Neither an NBA representative nor the players' agents reacted to DailyMail.com's demands for remark. 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 a duty to describe to consumers the differences and similarities between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that requires to be done.


'We have complete self-confidence in our influencer and ambassadorial collaborations, and our company practices more broadly,' the representative said. 'Some of our worths are" our players precede" and" we do what's right", and we put our worths at the core of everything we do.'


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


'Celebrities who provide their names to shady unlawful gambling sites are, at a minimum, putting their reputations at risk in addition to courting civil and class actions by customers who declare damage,' Glaser said. 'There is also some threat that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for facilitating illegal gambling.'


New YorkNBADrakeParis Hilton