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 conspicuously consisted of in a slide presentation on social and sweepstakes casinos - the questionable sites offering both free casino-style video games and lucrative prizes, such as cash, present cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone can 'bet 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 finds itself besieged by lawsuits. In the eyes of numerous gaming corporations, not to discuss suit complainants and state regulators, sweepstakes gambling establishments act as standard gambling establishments, only without the oversight, customer securities and tax laws. So not just can they prevent the high 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulative obstacles like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in income in 2015 alone. Now the company faces allegations of illegal sports betting in a New york city suit that declares VGW utilizes celeb endorsers to 'create a veneer of authenticity' around its product. (See VGW's declaration listed below)

'I'm not exactly sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for companies running multibillion-dollar unlawful 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 consist of a range of celebrities from sports betting enthusiasts Drake and DJ Khaled to swimmer Michael Phelps, in addition to NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between standard gambling and sweepstakes play.

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

Ryan Seacrest advises fans to play at Chumba Casino, where many - but not all - video games are totally free

Drake has a handle social sweeps gambling establishment, Stake, that he routinely promotes on social networks

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Instead, advertisements normally center around the social element of the gambling establishments, while omitting the capacity for actual gaming losses.

Others lure clients with pledges of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's automobiles, airplanes and estates before pivoting to footage of the rapper playing online casino-style games.

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

Another caption described: 'Because I never quit.'

The inconsistency between sports betting websites and social or sweepstakes gambling establishments is a bit intricate, but operators of the latter insist they're not involved with the previous.

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 players on social-sweepstakes gambling establishments are playing for totally free.

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

Social casinos provide customers a possibility to play casino-style games with pals. Players have the alternative to buy valueless currency typically referred to as 'gold coins,' which can not be exchanged for real cash, but can be used to unlock various functions within the video games.

But within the world of social casinos exists sweepstakes video gaming, enabling clients to acquire other currency called 'sweeps coins' that can be exchanged for cash or other rewards.

And therein lies the potential for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York City. One player told the Washington Post he lost more than $100,000 on sweepstakes casinos in the past year after continuing to buy more coins in pursuit of money and other things of worth.

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

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

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 however 7 states, which has assisted to fuel the popularity of sweepstakes gambling establishments.

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

Many websites, like the crypto-compatible Stake, allow clients to send mail-in demands for totally free sweeps coins, provided the players follow painfully particular guidelines. What's more, players are typically rewarded with sweeps coins simply for signing up, thus providing them a factor to attempt their hands at any variety of gambling establishment video games for an opportunity to win - or lose - real money.

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 product is the totally free casino-style gaming, and the real-stakes competitors is just a way of promoting their bread and butter.

'Social sweepstakes video games are just a kind of online home entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is required to play at social casinos with sweepstakes rewards. Consumers never have to spend for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is a crucial distinction between social sweeps and standard online gambling sites like gambling establishments.'

Consider the manner in which McDonald's utilizes its annual Monopoly video game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and french fries that provide them the possibility to win financially rewarding rewards, such as a $1 million prize.

And without a purchase requirement, or 'consideration', the video game itself does not meet the definition of gaming in the US.

'Sweepstakes are an enduring method for promoting all sort of daily services in the United States, whatever from burgers to publication subscriptions to coffee and home improvement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are regularly utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to many sports betting market experts, that argument doesn't cut it.

For starters, gaming lawyer Daniel Wallach explains, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a distinct beginning and end, consequently recommending the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being utilized to promote genuine items like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're usually not tied to casino-style games of opportunity,' Wallach told DailyMail.com. 'They're simply money giveaways.

'The sweepstakes [casinos] have none of the attributes frequently connected with McDonald's-design sweepstakes promotions,' Wallach continued. 'Besides running in all time, the sweepstakes gambling establishments provide" casino-like" payments, typically 80 percent or more of incomes, whereas the typical payout percentage for a temporary promotional sweepstakes is an insignificant share of the profits made by the business [usually less than one percent]'

Wallach is quick to compare the online social sweeps casinos to the internet cafes that emerged in Florida, offering consumers the opportunity to play casino-style video games for real rewards. A lot of those brick-and-mortar facilities have because been shuttered over claims of illegal sports betting.

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

Now, Wallach argues, social sweeps casinos ought to face comparable examination.

'These differences are not approximate,' Wallach said of social sweeps gambling establishments. 'They have actually repeatedly been pointed out by courts and state attorney general of the United States as key aspects in determining that a sweepstakes promotion remained in reality a guise for illegal sports betting.'

Among the casino industry's leading trade companies, the American Gaming Association, is now pushing legislators to investigate sweepstakes operators and, in some cases, enact new legislation on the problem.

'Consumers are being deprived of securities and states are giving up substantial tax and profits opportunities as this gaming replaces that conducted through controlled channels,' read a well-circulated AGA memo.

And after that there are the plaintiffs who have sued social gambling establishments in more than a lots states.

Sweepstakes casino operators paid a combined $14.2 million in 4 different cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW accepted pay $11.75 million in one class-action lawsuit, saying the settlement was made to prevent legal costs and continued lawsuits.

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

In the newest lawsuit, which is mostly comparable to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both declare to have lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited gambling business. '

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

'We generally don't talk about matters before the courts,' a VGW representative informed DailyMail.com through e-mail. 'However, we note that this claim has only just been submitted with the court and VGW has not been officially 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 offer our free-to-play video games throughout most of The United States and Canada, as we have for more than a years, developing not only excellent games, user experiences and home entertainment, however also guaranteeing this is done securely, responsibly and at the greatest level of requirements.

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

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

'It's ironic that professional athletes are hawking illegal sports betting 'sweeps' websites while at the very same time the leagues wish to forecast a strong position against prohibited sports betting - specifically when trying to tamp down the periodic sports betting scandal,' Glaser informed DailyMail.com.

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

Along with VGW, Apple and Google are being sued for hosting allegedly illegal gambling sites

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

'I 'd anticipate that a league crackdown on professional athletes backing sweepstakes sites is a matter of when, not if,' Glaser added.

Neither an NBA spokesman nor the players' agents reacted to DailyMail.com's ask 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 celebrity endorsers have a responsibility to describe to clients the differences and resemblances between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete self-confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the representative stated. 'Some of our values are" our players come initially" and" we do what's right", and we put our values 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 dubious unlawful sports betting websites are, at a minimum, putting their reputations at danger in addition to courting civil and class actions by consumers who allege damage,' Glaser said. 'There is also some risk that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for helping with prohibited gaming.'

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