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 presence, but the world-famous celebs were notably consisted of in a slide discussion on social and sweepstakes casinos - the questionable websites offering both complimentary casino-style games and profitable rewards, 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 just 2 cogs in the multibillion-dollar market that now finds itself besieged by suits. In the eyes of numerous video gaming corporations, not to mention suit complainants and state regulators, sweepstakes casinos serve as conventional gambling establishments, just without the oversight, customer protections and tax laws. So not just can they prevent the high 24-percent federal gaming levy, but 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 in 2015 alone. Now the business faces accusations of prohibited sports betting in a New york city claim that claims VGW uses celeb endorsers to 'create a veneer of legitimacy' around its item. (See VGW's declaration below)

'I'm unsure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business running 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 include a variety of stars from gambling lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom provide any differences in between conventional gaming and sweepstakes play.

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

Ryan Seacrest urges fans to play at Chumba Casino, where lots of - however not all - games are totally free

Drake has a deal with social sweeps casino, Stake, that he frequently touts on social media

Read More

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

Instead, advertisements typically focus around the social aspect of the gambling establishments, while leaving out the capacity for real gambling losses.

Others lure consumers with guarantees of prizes. One such operator, Stake, ran a social networks advertisement revealing off Drake's automobiles, planes and mansions before rotating to footage of the rapper playing online casino-style games.

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

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

The disparity between gambling sites and social or sweepstakes gambling establishments is a bit complex, but operators of the latter insist they're not involved with the previous.

A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), discussed its members are not in direct competitors with online casinos and sportsbooks. Furthermore, according to SPGA information, many of the gamers on social-sweepstakes gambling establishments are playing for totally free.

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

Social gambling establishments use consumers an opportunity to play casino-style games with buddies. Players have the choice to purchase worthless currency often described as 'gold coins,' which can not be exchanged genuine cash, but can be used to unlock various functions within the video games.

But within the world of social gambling establishments exists sweepstakes gaming, allowing clients to obtain other currency called 'sweeps coins' that can be exchanged for money or other rewards.

And therein lies the capacity for monetary losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York City. One player told the Washington Post he lost more than $100,000 on sweepstakes gambling establishments in the previous year after continuing to buy more coins in pursuit of cash and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad displaying Drake's automobiles, aircrafts 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 however 7 states, which has helped to sustain the popularity of sweepstakes casinos.

Anyone over the age of 18 can access the sweepstakes websites, which do not need normally require recognition. However, sites like Chumba will request IDs from gamers attempting to withdraw any funds.

Many sites, like the crypto-compatible Stake, permit customers to submit mail-in demands for free sweeps coins, provided the gamers follow painfully specific instructions. What's more, players are frequently rewarded with sweeps coins merely for signing up, therefore giving them a factor to try their hands at any variety of gambling establishment video games for a chance to win - or lose - genuine money.

So why are sweepstakes websites 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 competitors is just a way of promoting their bread and butter.

'Social sweepstakes games are merely a type of online home entertainment,' an SPGA spokesperson told DailyMail.com by e-mail. 'No purchase is required to play at social gambling establishments with sweepstakes prizes. Consumers never ever have to spend for an opportunity to win rewards. That lack of a purchase requirement - or" consideration" - is an essential distinction between social sweeps and traditional online sports betting sites like gambling establishments.'

Consider the way that McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're purchasing hamburgers and fries that offer them the chance to win profitable rewards, such as a $1 million prize.

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

'Sweepstakes are an enduring approach for promoting all type of everyday businesses in the United States, whatever from burgers to magazine subscriptions to coffee and home improvement shops,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are routinely utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, video gaming lawyer Daniel Wallach points out, McDonald's Monopoly game doesn't run forever. Rather, it has a distinct start and end, consequently recommending the sweepstakes is not the fast-food giant's primary item. Instead, the sweepstakes is being used to promote real products like french fries, shakes, and the Filet-O-Fish.

'They do not last forever and they're typically not connected to casino-style games of chance,' Wallach told DailyMail.com. 'They're simply cash giveaways.

'The sweepstakes [casinos] have none of the characteristics commonly related to McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes gambling establishments use" casino-like" payments, usually 80 percent or more of profits, whereas the common payout portion for a momentary marketing sweepstakes is a minor share of the revenue earned by the business [typically less than one percent]'

Wallach fasts to compare the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, using consumers the chance to play casino-style games for real prizes. Many of those brick-and-mortar facilities have since been shuttered over accusations of illegal sports betting.

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

Now, Wallach argues, social sweeps gambling establishments should deal with similar analysis.

'These distinctions are not arbitrary,' Wallach stated of social sweeps gambling establishments. 'They have consistently been mentioned by courts and state attorney general of the United States as key consider determining that a sweepstakes promotion remained in truth a guise for unlawful sports betting.'

One of the casino market's leading trade companies, the American Gaming Association, is now pressing legislators to examine sweepstakes operators and, sometimes, enact new legislation on the issue.

'Consumers are being deprived of protections and states are giving up considerable tax and profits chances as this sports betting replaces that conducted through regulated channels,' read a well-circulated AGA memo.

And then there are the complainants who have actually taken legal action against social casinos in more than a lots states.

Sweepstakes gambling establishment operators paid a combined $14.2 million in 4 separate cases in Kentucky without admitting any misbehavior, according to the Washington Post. Meanwhile VGW consented to pay $11.75 million in one class-action suit, stating the settlement was made to prevent legal costs and continued litigation.

Michael Phelps has actually signed a handle the VGW Group, which owns Global Poker

In the current claim, which is largely 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 'prohibited sports betting enterprise. '

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

'We normally do not talk about matters before the courts,' a VGW representative told DailyMail.com through email. 'However, we keep in mind that this claim has actually only just been submitted with the court and VGW has actually not been officially served.

'We have complete self-confidence in our compliance with all laws and policies where we run, and remain confident about the future,' the representative continued. 'We continue to use our free-to-play games across the majority of The United States and Canada, as we have for more than a decade, creating not only great video games, user experiences and home entertainment, but also guaranteeing this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd reiterate that class actions and other litigations and arbitrations are reasonably typical across the online social games market (and the US more broadly), and our standard practice is that we mean to strongly protect any claim which may be brought versus us.'

The issues in between standard online sports betting and sweepstakes casinos might prove problematic for some celebrity 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 paradoxical that professional athletes are hawking prohibited sports betting 'sweeps' websites while at the same time the leagues want to project a strong stance against prohibited gaming - specifically when attempting to tamp down the occasional sports betting scandal,' Glaser informed 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 gamblers. However, to be clear, Porter's scandal is unrelated to anything involving social or sweepstakes casinos.

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

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

'I 'd expect that a league crackdown on athletes backing sweepstakes sites refers when, not if,' Glaser added.

Neither an NBA spokesperson 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 neglected to react to DailyMail.com emails.

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

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

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

'Celebrities who lend their names to dubious prohibited gaming websites are, at a minimum, putting their credibilities at threat in addition to courting civil and class actions by customers who declare damage,' Glaser stated. 'There is also some threat that state regulators and state chief law officers rope celeb endorsers into enforcement efforts for helping with illegal gambling.'

New YorkNBADrakeParis Hilton