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

No, they weren't personally in attendance, however the world-famous stars were conspicuously included in a slide discussion on social and sweepstakes gambling establishments - the controversial websites providing both totally free casino-style games and lucrative rewards, such as cash, gift cards or cryptocurrency. In one advertisement, the fist-pumping Seacrest is seen plugging Chumba Casino, where anyone 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 finds itself besieged by lawsuits. In the eyes of lots of gaming corporations, not to point out suit plaintiffs and state regulators, sweepstakes casinos act as conventional gambling establishments, only without the oversight, customer securities and tax laws. So not just can they avoid the steep 24-percent federal sports betting levy, however sweepstakes operators aren't subject to regulative hurdles 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 faces accusations of prohibited sports betting in a New york city lawsuit that declares VGW uses celeb endorsers to 'create a veneer of authenticity' around its product. (See VGW's declaration below)

'I'm not exactly sure" if you do not 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 speaker, Howard Glaser of gaming corporation Light & Wonder, told DailyMail.com.

Sweepstakes endorsers include a range of celebrities 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 offer any distinctions between traditional sports betting and sweepstakes play.

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

Ryan Seacrest advises fans to dip into Chumba Casino, where lots of - but not all - video games are free

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

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Instead, advertisements usually 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 media advertisement displaying Drake's vehicles, aircrafts and mansions before rotating to video footage of the rapper playing online casino-style video games.

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

Another caption described: 'Because I never ever quit.'

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

A spokesperson for a market trade group, the Social and Promotional Gaming Association (SPGA), explained its members are not in direct competition with online casinos and sportsbooks. Furthermore, according to SPGA data, many of the players on social-sweepstakes casinos are playing for complimentary.

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

Social gambling establishments offer consumers an opportunity to play casino-style video games with pals. Players have the alternative to buy worthless currency frequently described as 'gold coins,' which can not be exchanged genuine cash, but can be utilized to unlock numerous features within the video games.

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

And therein lies the potential for monetary losses, like the ones claimed by complainants in Florida, Georgia, New Jersey and New York. One gamer 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 cash and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad showing off Drake's cars and trucks, airplanes 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 sustain the popularity of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, permit clients to submit mail-in demands for complimentary sweeps coins, supplied the gamers follow painfully particular directions. What's more, players are typically rewarded with sweeps coins simply for registering, thereby providing a factor to attempt their hands at any variety of gambling establishment games for an opportunity to win - or lose - genuine money.

So why are sweepstakes sites to run in 48 states, while online gambling establishments are prohibited in all but 7?

According to the stakeholders, their item is the free casino-style video gaming, and the real-stakes competition is just a means of promoting their support.

'Social sweepstakes video games are simply a kind of online entertainment,' an SPGA representative told DailyMail.com by email. 'No purchase is needed to play at social casinos with sweepstakes prizes. Consumers never need to spend for a chance to win prizes. That lack of a purchase requirement - or" consideration" - is a crucial distinction between social sweeps and conventional online gambling sites like casinos.'

Think about the manner in which McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to bet, but rather they're buying hamburgers and french fries that use them the chance to win financially rewarding rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the game itself does not meet the definition of sports betting in the US.

'Sweepstakes are an enduring method for promoting all type of daily organizations in the United States, everything from hamburgers to magazine memberships to coffee and home enhancement shops,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions are frequently utilized by a who's who of household names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

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

For starters, gaming attorney Daniel Wallach points out, McDonald's Monopoly game doesn't run indefinitely. Rather, it has a well-defined start and end, consequently suggesting the sweepstakes is not the fast-food giant's main item. Instead, the sweepstakes is being utilized to promote real products like french fries, shakes, and the Filet-O-Fish.

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

'The sweepstakes [gambling establishments] have none of the attributes typically related to McDonald's-design sweepstakes promos,' 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 portion for a short-term marketing sweepstakes is an insignificant share of the income made by the company [normally less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the internet coffee shops that sprang up in Florida, providing clients the chance to play casino-style video games for real prizes. A number of those brick-and-mortar establishments have actually because been shuttered over allegations of unlawful gambling.

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

Now, Wallach argues, social sweeps casinos need to face comparable analysis.

'These distinctions are not approximate,' Wallach said of social sweeps casinos. 'They have actually consistently been cited by courts and state attorney generals as crucial consider determining that a sweepstakes promotion was in truth a guise for unlawful sports betting.'

One of the gambling establishment market's leading trade organizations, the American Gaming Association, is now pushing lawmakers to examine sweepstakes operators and, sometimes, enact new legislation on the concern.

'Consumers are being deprived of securities and states are giving up considerable tax and earnings chances as this gambling replaces that performed through managed channels,' read a well-circulated AGA memo.
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And then there are the plaintiffs who have sued 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 confessing any wrongdoing, 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 expenses and continued lawsuits.
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Michael Phelps has signed a handle the VGW Group, which owns Global Poker

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

Apple and Google have actually also been called as accuseds in lawsuits for hosting the sweepstakes websites. But unlike VGW, neither tech business responded to DailyMail.com's demand for remark.

'We normally don't talk about matters before the courts,' a VGW spokesperson informed DailyMail.com by means of email. 'However, we note that this claim has only simply been submitted with the court and VGW has actually not been formally served.

'We have complete self-confidence in our compliance with all laws and guidelines where we operate, and remain confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play games across the majority of The United States and Canada, as we have for more than a decade, producing not just great games, user experiences and home entertainment, however also ensuring this is done securely, properly and at the highest level of requirements.

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

The concerns in between traditional online gaming and sweepstakes casinos could show bothersome 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 traditional 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 desire to forecast a strong stance against illegal gambling - particularly when attempting to tamp down the periodic sports betting scandal,' Glaser told DailyMail.com.

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

Along with VGW, Apple and Google are being taken legal action against for hosting supposedly unlawful gambling sites

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

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

Neither an NBA spokesperson nor the gamers' representatives reacted to DailyMail.com's requests for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps also overlooked to respond to DailyMail.com e-mails.
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Asked if their celebrity endorsers have an obligation to describe to consumers the distinctions and resemblances in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.

'We have complete confidence in our influencer and ambassadorial collaborations, and our business practices more broadly,' the spokesperson stated. 'Some of our worths are" our players come first" and" we do what's right", and we put our values at the core of whatever we do.'

Glaser, an outspoken opponent of sweepstakes sites, sees things differently.
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'Celebrities who lend their names to shady unlawful gambling sites are, at a minimum, putting their reputations at danger in addition to courting civil and class actions by customers who declare damage,' Glaser said. 'There is also some threat that state regulators and state lawyers basic rope star endorsers into enforcement efforts for assisting in unlawful sports betting.'

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