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 attendance, however the world-famous celebrities were conspicuously included in a slide discussion on social and sweepstakes casinos - the controversial websites offering both complimentary casino-style games and financially 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 market that now discovers itself besieged by suits. In the eyes of many gaming corporations, not to point out claim complainants and state regulators, sweepstakes gambling establishments function as conventional gambling establishments, just without the oversight, consumer protections and tax laws. So not only can they prevent the high 24-percent federal gaming levy, however sweepstakes operators aren't based on regulative obstacles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in revenue in 2015 alone. Now the company deals with accusations of prohibited sports betting in a New York suit that claims VGW utilizes celebrity endorsers to 'create a veneer of authenticity' around its item. (See VGW's declaration below)

'I'm not exactly sure" if you don't trust us, you can trust Paris Hilton" is a winning message for companies operating multibillion-dollar unlawful operations out of places 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 consist of a series 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 traditional gaming and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, among lots of sweepstakes gambling establishments found online
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Ryan Seacrest advises fans to dip into Chumba Casino, where numerous - but not all - video games are free

Drake has an offer with social sweeps gambling establishment, Stake, that he frequently promotes on social networks

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Instead, ads usually center around the social aspect of the gambling establishments, while leaving out the potential for actual gambling losses.

Others tempt clients with guarantees of rewards. One such operator, Stake, ran a social media ad revealing off Drake's cars and trucks, planes and estates before rotating to video footage of the rapper playing online casino-style video games.
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'Daddy, why do we have so much cash?' check out the first caption on the screen.

Another caption discussed: 'Because I never gave up.'

The disparity between sports betting sites and social or sweepstakes gambling establishments is a bit intricate, but operators of the latter insist they're not included with the former.

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

'Most social sweeps clients never buy,' the SPGA representative told DailyMail.com. 'The minority of consumers who make purchases do so in amounts far smaller than the normal deposit or wager size at real-money online sports betting websites.'

Social casinos provide consumers a possibility to play casino-style games with friends. Players have the alternative to purchase worthless currency typically referred to as 'gold coins,' which can not be exchanged for real cash, however can be utilized to unlock numerous functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, permitting consumers to obtain other currency referred to as 'sweeps coins' that can be exchanged for money or other prizes.

And therein lies the potential for financial losses, like the ones claimed by plaintiffs in Florida, Georgia, New Jersey and New York. One player told 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 worth.

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

Social sweeps gambling establishment Stake ran an advertisement displaying Drake's cars, aircrafts and estates

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 7 states, which has actually helped to sustain the appeal of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, allow consumers to submit mail-in demands for totally free sweeps coins, supplied the players follow painfully specific guidelines. What's more, players are often rewarded with sweeps coins just for signing up, thus giving them a factor to try their hands at any variety of gambling establishment games for an opportunity to win - or lose - genuine money.

So why are sweepstakes sites enabled to operate in 48 states, while online casinos are banned in all however 7?

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

'Social sweepstakes games are simply a form of online home entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is needed to dip into social gambling establishments with sweepstakes prizes. Consumers never need to pay for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is an important difference between social sweeps and traditional online gambling sites like casinos.'

Consider the way that McDonald's utilizes its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and french fries that provide them the opportunity to win lucrative prizes, such as a $1 million prize.

And without a purchase requirement, or 'factor to consider', the video game itself doesn't fulfill the definition of gaming in the US.

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

But to lots of gambling market experts, that argument doesn't cut it.

For beginners, video gaming lawyer Daniel Wallach mentions, McDonald's Monopoly video game doesn't run forever. Rather, it has a well-defined beginning and end, thereby recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote genuine products like fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [gambling establishments] have none of the characteristics commonly associated with McDonald's-design sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes casinos use" casino-like" payouts, typically 80 percent or more of profits, whereas the common payout portion for a short-lived advertising sweepstakes is an unimportant share of the earnings made by the business [normally less than one percent]'

Wallach is fast to liken the online social sweeps casinos to the web coffee shops that emerged in Florida, using clients the chance to play casino-style games for real rewards. Much of those brick-and-mortar facilities have actually since been shuttered over accusations of illegal gambling.
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DJ Khaled is among numerous 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 actually consistently been pointed out by courts and state attorney general of the United States as essential consider determining that a sweepstakes promo was in fact a guise for unlawful sports betting.'

Among the casino industry's leading trade organizations, the American Gaming Association, is now pushing lawmakers to investigate sweepstakes operators and, in some cases, enact brand-new legislation on the issue.

'Consumers are being deprived of protections and states are passing up significant tax and profits chances as this gambling changes that performed through managed 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 gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without confessing any wrongdoing, according to the Washington Post. Meanwhile VGW agreed to pay $11.75 million in one class-action claim, saying the settlement was made to avoid legal costs and continued lawsuits.

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

In the current claim, which is mainly similar to its predecessors, New York state residents Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited sports betting business. '

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

'We typically do not talk about matters before the courts,' a VGW representative informed DailyMail.com by means of email. 'However, we keep in mind that this claim has only just been submitted with the court and VGW has not been formally served.

'We have full self-confidence in our compliance with all laws and guidelines where we run, and stay positive about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across many of The United States and Canada, as we have for more than a years, developing not just excellent video games, user experiences and entertainment, however also guaranteeing this is done safely, responsibly and at the greatest level of requirements.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are reasonably typical throughout the online social games industry (and the US more broadly), and our standard practice is that we mean to intensely protect any claim which might be brought against us.'

The issues in between conventional online sports betting and sweepstakes casinos might show problematic for some celeb endorsers.

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

'It's ironic that expert athletes are hawking unlawful sports betting 'sweeps' websites while at the same time the leagues wish to predict a strong position versus illegal gaming - especially when attempting to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

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

Together with VGW, Apple and Google are being taken legal action against for hosting supposedly prohibited gambling websites

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

'I 'd anticipate that a league crackdown on athletes endorsing sweepstakes sites refers when, not if,' Glaser included.
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Neither an NBA spokesman nor the gamers' agents reacted to DailyMail.com's demands for remark. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise ignored to react to DailyMail.com emails.

Asked if their star endorsers have a responsibility to explain to customers the differences and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that needs to be done.

'We have full self-confidence in our influencer and ambassadorial partnerships, and our organization practices more broadly,' the representative said. 'Some of our worths are" our players precede" and" we do what's right", and we put our values at the core of whatever we do.'

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

'Celebrities who lend their names to dubious unlawful gaming websites are, at a minimum, putting their reputations at danger along with 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 star endorsers into enforcement efforts for assisting in unlawful sports betting.'

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