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

No, they weren't personally in participation, however the world-famous stars were notably consisted of in a slide presentation on social and sweepstakes gambling establishments - the controversial websites providing both free casino-style games and rewarding rewards, such as cash, gift cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'play for 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 gaming corporations, not to discuss lawsuit complainants and state regulators, sweepstakes gambling establishments act as conventional gambling establishments, just without the oversight, customer protections and tax laws. So not only can they prevent the high 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulatory hurdles like anti-money laundering and responsible-gaming securities.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings in 2015 alone. Now the company faces accusations of unlawful sports betting in a New york city claim that declares VGW uses celebrity endorsers to 'produce a veneer of authenticity' around its product. (See VGW's statement below)
bet9ja.com
'I'm not sure" if you do not trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar prohibited operations out of places like Malta, Isle of Man, or US mail drops,' Friday's presenter, Howard Glaser of video gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a series of celebrities from sports betting lovers Drake and DJ Khaled to swimmer Michael Phelps, as well as NBA stars Karl-Anthony Towns and Paul George - none of whom use any differences in between conventional gambling and sweepstakes play.

Paris Hilton is seen plugging Wow Vegas, one of numerous sweepstakes gambling establishments found online

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

Drake has a handle social sweeps casino, Stake, that he regularly touts on social media

Learn more

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

Instead, advertisements normally focus around the social element of the casinos, while omitting the capacity for real gaming losses.

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

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

Another caption explained: 'Because I never quit.'

The discrepancy between gaming sites and social or sweepstakes gambling establishments is a bit complicated, but operators of the latter insist they're not included with the former.

A representative for an industry trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, most of the players on social-sweepstakes gambling establishments are sports betting free.
bet9ja.com
'Most social sweeps customers never purchase,' the SPGA representative informed DailyMail.com. of consumers who make purchases do so in quantities far smaller than the normal deposit or bet size at real-money online gambling websites.'

Social casinos use customers an opportunity to play casino-style games with friends. Players have the option to buy worthless currency often described as 'gold coins,' which can not be exchanged for real cash, however can be used to open numerous functions within the games.

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

And therein lies the capacity for monetary losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer 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 occasion

Social sweeps gambling establishment Stake ran an advertisement showing off 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 banned in all but 7 states, which has helped to sustain the appeal of sweepstakes casinos.

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

Many websites, like the crypto-compatible Stake, enable consumers to send mail-in ask for complimentary sweeps coins, provided the players follow painfully specific directions. What's more, players are frequently rewarded with sweeps coins merely for signing up, consequently providing a factor to try their hands at any variety of casino video games for a possibility to win - or lose - real money.

So why are sweepstakes websites permitted to operate in 48 states, while online gambling establishments are banned in all but 7?
bit.ly
According to the stakeholders, their product is the free casino-style video gaming, and the real-stakes competitors is simply a means of promoting their bread and butter.

'Social sweepstakes video games are just a kind of online home entertainment,' an SPGA representative informed DailyMail.com by email. 'No purchase is needed to dip into social casinos with sweepstakes prizes. Consumers never ever have to spend for a chance to win prizes. That absence of a purchase requirement - or" consideration" - is a crucial distinction in between social sweeps and conventional online gambling websites like gambling establishments.'

Think about the way that McDonald's utilizes its annual Monopoly video game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and fries that provide them the possibility to win rewarding prizes, such as a $1 million jackpot.

And without a purchase requirement, or 'consideration', the video game itself doesn't satisfy the definition of gaming in the US.

'Sweepstakes are a long-standing technique for promoting all sort of everyday organizations in the United States, whatever from hamburgers to magazine memberships to coffee and home enhancement stores,' the SPGA representative informed DailyMail.com. 'Sweepstakes promos are frequently utilized by a who's who of home names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to numerous sports betting industry insiders, that argument doesn't cut it.

For starters, video gaming lawyer Daniel Wallach explains, McDonald's Monopoly video game doesn't run indefinitely. 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 fries, shakes, and the Filet-O-Fish.

'They don't last permanently and they're generally not tied to casino-style video games of opportunity,' Wallach informed DailyMail.com. 'They're just money giveaways.

'The sweepstakes [casinos] possess none of the attributes frequently associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in eternity, the sweepstakes casinos offer" casino-like" payments, usually 80 percent or more of revenues, whereas the common payment percentage for a short-lived marketing sweepstakes is a trivial share of the revenue earned by the business [generally less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the web cafes that emerged in Florida, using customers the chance to play casino-style games for real prizes. A number of those brick-and-mortar establishments have actually given that been shuttered over accusations of unlawful gambling.

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

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

'These distinctions are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have repeatedly been cited by courts and state chief law officer as essential consider determining that a sweepstakes promo was in truth a guise for prohibited gaming.'

Among the casino market'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 problem.

'Consumers are being denied of securities and states are forgoing considerable tax and earnings opportunities as this gambling replaces that carried out through regulated channels,' checked out a well-circulated AGA memo.

And after that there are the plaintiffs who have actually taken legal action against social gambling establishments in more than a dozen states.

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

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

In the most recent claim, which is mostly comparable to its predecessors, New york city state homeowners Lamar Prater and Rebecca Pratt both claim to have lost well over $1,000 to VGW, which is described in the filing as an 'prohibited gambling enterprise. '

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

'We normally don't discuss matters before the courts,' a VGW spokesperson told DailyMail.com through e-mail. 'However, we keep in mind that this claim has only just been filed with the court and VGW has not been officially served.

'We have complete self-confidence in our compliance with all laws and policies where we operate, and stay confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play games throughout many of The United States and Canada, as we have for more than a decade, creating not just great games, user experiences and entertainment, however likewise ensuring this is done safely, properly and at the greatest level of standards.

'More broadly, we 'd repeat that class actions and other litigations and arbitrations are relatively typical across the online social video games industry (and the US more broadly), and our standard practice is that we plan to strongly defend any claim which might be brought versus us.'

The problems between conventional online gaming and sweepstakes casinos could prove bothersome for some celeb 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 standard gaming titans like FanDuel and DraftKings.

'It's ironic that professional athletes are hawking prohibited sports betting 'sweeps' sites while at the exact same time the leagues wish to project a strong stance versus unlawful gaming - specifically when attempting to tamp down the periodic gaming scandal,' Glaser informed DailyMail.com.

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

Along with VGW, Apple and Google are being taken legal action against for hosting apparently illegal sports betting 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 websites refers when, not if,' Glaser included.

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

Asked if their celeb endorsers have an obligation to explain to clients the distinctions and similarities in between iGaming and sweepstakes gambling establishments, VGW firmly insisted there is nothing more that needs to be done.

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

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

'Celebrities who lend their names to shady illegal sports betting sites are, at a minimum, putting their track records at threat along with courting civil and class actions by consumers who declare damage,' Glaser stated. 'There is also some risk that state regulators and state attorneys basic rope celebrity endorsers into enforcement efforts for assisting in unlawful gambling.'

New YorkNBADrakeParis Hilton