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, but the world-famous celebrities were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the controversial websites using both free casino-style games and lucrative rewards, such as money, present 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 simply two cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of lots of gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments function as traditional gambling establishments, just without the oversight, customer securities and tax laws. So not only can they avoid the steep 24-percent federal gambling levy, but sweepstakes operators aren't subject to regulative difficulties 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 business deals with accusations of illegal gaming in a New York suit that declares VGW utilizes celebrity endorsers to 'produce a veneer of authenticity' around its product. (See VGW's declaration below)

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

Sweepstakes endorsers consist of a variety of celebs from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, along with NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences between conventional sports betting and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of lots of sweepstakes casinos found online

Ryan Seacrest urges fans to dip into Chumba Casino, where many - but not all - games are complimentary

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

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

Others tempt customers with guarantees of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's vehicles, aircrafts and mansions before rotating to video footage of the rap artist playing online casino-style video games.

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

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

The discrepancy between gambling websites and social or sweepstakes casinos is a bit intricate, 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), discussed 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 casinos are sports betting complimentary.

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

Social casinos offer clients an opportunity to play casino-style video games with good friends. Players have the alternative to buy worthless currency often described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to unlock different functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, enabling clients 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 City. 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 cash and other things of value.

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

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 prohibited in all but 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 normally need identification. However, sites like Chumba will request for IDs from gamers trying to withdraw any funds.

Many websites, like the crypto-compatible Stake, allow clients to submit mail-in ask for complimentary sweeps coins, supplied the players follow painfully specific instructions. What's more, gamers are often rewarded with sweeps coins merely for signing up, thereby giving them a reason to try their hands at any variety of casino video games for an opportunity to win - or lose - genuine cash.

So why are sweepstakes websites permitted to operate in 48 states, while online casinos are prohibited in all however 7?

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

'Social sweepstakes video games are simply a kind of online entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never ever have to pay for an opportunity to win prizes. That absence of a purchase requirement - or" consideration" - is a vital distinction in between social sweeps and standard online gambling websites like gambling establishments.'

Consider the method that McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that provide them the opportunity to win financially rewarding prizes, 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 an enduring approach for promoting all sort of everyday services in the United States, whatever from burgers to publication memberships to coffee and home enhancement stores,' the SPGA representative told DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous gambling market experts, that argument does not cut it.

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

'They do not last permanently and they're normally not connected to casino-style video games of chance,' Wallach informed DailyMail.com. 'They're just money giveaways.

'The sweepstakes [casinos] have none of the attributes frequently connected with McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos provide" casino-like" payouts, generally 80 percent or more of profits, whereas the normal payment portion for a temporary advertising sweepstakes is a minor share of the earnings earned by the business [generally less than one percent]'

Wallach is fast to compare the online social sweeps casinos to the internet coffee shops that sprang up in Florida, using customers the opportunity to play casino-style video games for genuine prizes. Much of those brick-and-mortar facilities have given that been shuttered over accusations of illegal sports betting.

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

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

'These distinctions are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have repeatedly been pointed out by courts and state chief law officer as key aspects in determining that a sweepstakes promotion remained in truth a guise for unlawful sports betting.'

One of the gambling establishment industry's leading trade companies, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, in some cases, enact brand-new legislation on the problem.

'Consumers are being deprived of protections and states are forgoing substantial tax and profits chances as this gambling replaces 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 separate cases in Kentucky without admitting any misdeed, 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 lawsuits.

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

In the current claim, which is mainly comparable to its predecessors, New york city state locals Lamar Prater and Rebecca Pratt both declare to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gambling enterprise. '

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

'We usually do not comment on matters before the courts,' a VGW spokesperson told DailyMail.com through email. 'However, we note that this claim has only just 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 positive about the future,' the representative continued. 'We continue to provide our free-to-play games across the majority of The United States and Canada, as we have for more than a years, developing not just excellent games, user experiences and home entertainment, but likewise ensuring this is done safely, responsibly and at the greatest level of standards.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are fairly common across the online social games industry (and the US more broadly), and our standard practice is that we intend to strongly defend any claim which may be brought versus us.'

The issues between standard online gaming and sweepstakes casinos might prove 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 conventional video gaming titans like FanDuel and DraftKings.

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

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

Along with VGW, Apple and Google are being taken legal action against for hosting allegedly unlawful gambling websites

Regardless, Glaser sees sweepstakes casinos 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 added.

Neither an NBA spokesperson nor the players' representatives reacted to DailyMail.com's requests for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also neglected to react to DailyMail.com e-mails.

Asked if their celeb endorsers have a duty to discuss to consumers the distinctions and resemblances in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have complete confidence in our influencer and ambassadorial partnerships, and our business practices more broadly,' the representative stated. 'A few of our values are" our players come first" and" we do what's right", and we put our worths at the core of everything we do.'

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

'Celebrities who provide their names to dubious unlawful sports betting websites are, at a minimum, putting their track records at risk along with courting civil and class actions by consumers who allege harm,' Glaser said. 'There is also some danger that state regulators and state chief law officers rope star endorsers into enforcement efforts for helping with unlawful gaming.'

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