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

No, they weren't personally in attendance, but the world-famous celebrities were notably consisted of in a slide presentation on social and sweepstakes casinos - the controversial sites offering both totally free casino-style video games and profitable prizes, such as money, present cards or cryptocurrency. In one advertisement, 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 websites are just two cogs in the multibillion-dollar market that now discovers itself besieged by suits. In the eyes of lots of video gaming corporations, not to discuss lawsuit plaintiffs and state regulators, sweepstakes gambling establishments act as traditional gambling establishments, just without the oversight, consumer securities and tax laws. So not just can they avoid the high 24-percent federal sports betting levy, however sweepstakes operators aren't based on regulative difficulties like anti-money laundering and responsible-gaming protections.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in profits last year alone. Now the company deals with accusations of prohibited sports betting in a New york city claim that claims VGW uses celebrity endorsers to 'create 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 trust Paris Hilton" is a winning message for companies operating multibillion-dollar prohibited 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 celebrities from gambling enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom offer any distinctions between traditional gaming and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where numerous - however not all - games are complimentary

Drake has a deal with social sweeps gambling establishment, Stake, that he frequently promotes on social networks

Learn more

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

Instead, advertisements normally center around the social aspect of the casinos, while omitting the capacity for actual gambling losses.

Others tempt customers with promises of prizes. One such operator, Stake, ran a social networks advertisement showing off Drake's cars, aircrafts and mansions before rotating to video of the rapper playing online casino-style games.

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

Another caption discussed: 'Because I never quit.'

The inconsistency between sports betting websites and social or sweepstakes gambling establishments is a bit intricate, however operators of the latter insist they're not involved 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 data, many of the players on social-sweepstakes casinos are sports betting totally free.

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

Social gambling establishments use consumers an opportunity to play casino-style games with friends. Players have the choice to buy worthless currency typically described as 'gold coins,' which can not be exchanged genuine money, however can be utilized to open numerous functions within the video games.

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

And therein lies the capacity for monetary losses, like the ones declared 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 purchase more coins in pursuit of money 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 flaunting Drake's automobiles, planes and estates

Karl-Anthony Towns of the New York City 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 fuel the appeal of sweepstakes casinos.

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

Many sites, like the crypto-compatible Stake, enable customers to submit mail-in requests for totally free sweeps coins, offered the players follow painfully particular directions. What's more, players are typically rewarded with sweeps coins just for registering, therefore providing a reason to try their hands at any variety of casino games for a chance to win - or lose - genuine money.

So why are sweepstakes websites allowed 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 competitors is just a means of promoting their support.

'Social sweepstakes games are merely a type of online entertainment,' an SPGA representative told DailyMail.com by e-mail. 'No purchase is required to play at social casinos with sweepstakes prizes. Consumers never ever need to pay for a chance to win rewards. That lack of a purchase requirement - or" factor to consider" - is a vital distinction between social sweeps and traditional online gambling websites like casinos.'

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

And without a purchase requirement, or 'consideration', the game itself doesn't satisfy the meaning of gaming in the US.
bet9ja.com
'Sweepstakes are a long-standing approach for promoting all sort of daily organizations in the United States, everything from burgers to magazine memberships to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For beginners, video gaming attorney Daniel Wallach points out, 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 real items like french fries, shakes, and the Filet-O-Fish.
bit.ly
'They do not last forever and they're usually not connected to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're simply money free gifts.
bet9ja.com
'The sweepstakes [casinos] possess none of the qualities commonly associated with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payments, usually 80 percent or more of revenues, whereas the common payment portion for a short-term marketing sweepstakes is a trivial share of the revenue earned by the business [usually less than one percent]'
bet9ja.com
Wallach is fast to liken the online social sweeps casinos to the internet coffee shops that emerged in Florida, offering clients the possibility to play casino-style games for genuine prizes. Much of those brick-and-mortar facilities have considering that been shuttered over allegations of prohibited gambling.

DJ Khaled is amongst a number of celebrity spokespeople for VGW's Global Poker brand

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

'These differences are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have actually repeatedly been mentioned by courts and state chief law officer as key consider determining that a sweepstakes promotion remained in fact a guise for illegal sports betting.'
bit.ly
One of the gambling establishment market's leading trade companies, the American Gaming Association, is now pressing lawmakers to investigate sweepstakes operators and, sometimes, enact brand-new legislation on the concern.

'Consumers are being denied of defenses and states are giving up considerable tax and income opportunities as this gaming changes that carried out through managed channels,' read a well-circulated AGA memo.

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

Sweepstakes gambling establishment operators paid a combined $14.2 million in four different cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW concurred 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 handle 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 claim to have actually lost well over $1,000 to VGW, which is described in the filing as an 'unlawful gambling enterprise. '

Apple and Google have also been called as offenders in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company responded to DailyMail.com's ask for comment.

'We normally do not discuss matters before the courts,' a VGW spokesperson told DailyMail.com via email. 'However, we note that this claim has actually only just been submitted with the court and VGW has actually not been officially served.
bet9ja.com
'We have complete self-confidence in our compliance with all laws and guidelines where we operate, and stay positive about the future,' the representative continued. 'We continue to offer our free-to-play video games across the majority of North America, as we have for more than a decade, producing not just excellent games, user experiences and entertainment, however also ensuring this is done securely, responsibly and at the highest level of standards.

'More broadly, we 'd restate that class actions and other lawsuits and arbitrations are reasonably typical across the online social video games market (and the US more broadly), and our basic practice is that we intend to intensely protect any claim which may be brought against us.'

The problems in between conventional online gaming and sweepstakes casinos might prove bothersome 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 conventional gaming titans like FanDuel and DraftKings.

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

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

Together with VGW, Apple and Google are being sued for hosting apparently illegal sports betting websites

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

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

Neither an NBA representative nor the players' representatives reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise overlooked to react to DailyMail.com e-mails.

Asked if their celeb endorsers have an obligation to explain to clients the differences and similarities in between iGaming and sweepstakes casinos, VGW insisted there is absolutely nothing more that requires to be done.

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

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

'Celebrities who lend their names to dubious prohibited gaming sites are, at a minimum, putting their reputations at risk as well as courting civil and class actions by consumers who declare harm,' Glaser stated. 'There is also some threat that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for assisting in prohibited gambling.'

New YorkNBADrakeParis Hilton