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 attendance, but the world-famous celebs were notably included in a slide discussion on social and sweepstakes gambling establishments - the controversial websites providing both complimentary 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 claims. In the eyes of lots of gaming corporations, not to mention claim plaintiffs and state regulators, sweepstakes casinos function as standard gambling establishments, just without the oversight, customer securities and tax laws. So not only can they prevent the steep 24-percent federal gaming levy, however sweepstakes operators aren't subject to regulatory obstacles 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 business deals with allegations of illegal gambling in a New York lawsuit that claims VGW utilizes star endorsers to 'develop a veneer of authenticity' around its item. (See VGW's statement listed below)

'I'm unsure" if you do not trust us, you can rely on Paris Hilton" is a winning message for companies operating multibillion-dollar illegal operations out of locations 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 variety of celebs from gambling lovers 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 between standard gaming and sweepstakes play.

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

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

Drake has a deal with social sweeps gambling establishment, Stake, that he routinely touts on social media

Learn more

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

Instead, ads normally center around the social aspect of the gambling establishments, while leaving out the potential for actual gaming losses.

Others tempt clients with pledges of prizes. One such operator, Stake, ran a social networks advertisement flaunting Drake's cars and trucks, aircrafts and mansions before pivoting to video 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 discussed: 'Because I never ever provided up.'

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

A spokesperson 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, the majority of the players on social-sweepstakes casinos are sports betting free.

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

Social casinos provide customers a possibility to play casino-style games with friends. Players have the choice to buy valueless currency frequently referred to as 'gold coins,' which can not be exchanged genuine cash, but can be used to open numerous functions within the games.

But within the world of social casinos exists sweepstakes gaming, permitting clients to get other currency referred to as 'sweeps coins' that can be exchanged for cash or other prizes.

And therein lies the potential for monetary losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One gamer 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 money and other things of value.

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

Social sweeps gambling establishment Stake ran an ad flaunting Drake's cars and trucks, planes and estates

Karl-Anthony Towns of the New York Knicks is another NBA star plugging VGW's Global Poker

Traditional online casinos are banned in all however seven states, which has actually assisted to fuel the appeal of sweepstakes gambling establishments.

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

Many sites, like the crypto-compatible Stake, permit clients to send mail-in ask for complimentary sweeps coins, supplied the players follow painfully specific guidelines. What's more, players are typically rewarded with sweeps coins simply for registering, thus providing a reason to attempt their hands at any variety of casino games for a chance to win - or lose - real money.

So why are sweepstakes sites permitted to run in 48 states, while online casinos are prohibited in all however 7?

According to the stakeholders, their item is the complimentary casino-style gaming, and the real-stakes competition is merely a way of promoting their bread and butter.

'Social sweepstakes games are merely a kind of online home entertainment,' an SPGA spokesperson informed DailyMail.com by e-mail. 'No purchase is required to dip into social casinos with sweepstakes prizes. Consumers never ever have to pay for an opportunity to win prizes. That lack of a purchase requirement - or" factor to consider" - is an important difference in between social sweeps and conventional online gaming websites like casinos.'

Consider the way that McDonald's uses its yearly Monopoly game to promote its food: Customers aren't paying to gamble, but rather they're purchasing hamburgers and fries that offer them the opportunity to win profitable prizes, such as a $1 million jackpot.

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

'Sweepstakes are a long-standing technique for promoting all type of daily services in the United States, whatever from hamburgers to publication subscriptions to coffee and home enhancement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promos are frequently utilized by a who's who of family names like AT&T, Chase, Home Depot, Marriott, Starbucks, and Wal-Mart.'

But to lots of sports betting industry experts, that argument does not cut it.

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

'They do not last permanently and they're normally not tied to casino-style games of chance,' Wallach informed DailyMail.com. 'They're simply money free gifts.

'The sweepstakes [gambling establishments] have none of the characteristics typically related to McDonald's-style sweepstakes promos,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payments, typically 80 percent or more of profits, whereas the typical payout portion for a temporary promotional sweepstakes is a trivial share of the profits earned by the business [generally less than one percent]'

Wallach is quick to liken the online social sweeps gambling establishments to the internet cafes that emerged in Florida, offering clients the chance to play casino-style games for genuine prizes. Many of those brick-and-mortar facilities have actually considering that been shuttered over accusations of unlawful gambling.

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

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

'These differences are not approximate,' Wallach stated of social sweeps gambling establishments. 'They have consistently been pointed out by courts and state chief law officer as essential factors in figuring out that a sweepstakes promo remained in truth a guise for unlawful gaming.'

Among the gambling establishment industry's leading trade organizations, the American Gaming Association, is now pressing lawmakers to examine sweepstakes operators and, in some cases, enact brand-new legislation on the problem.

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

And after that there are the complainants who have actually sued social gambling establishments in more than a dozen states.

Sweepstakes casino 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 lawsuits.

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

In the most recent claim, which is mainly similar 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 described in the filing as an 'unlawful gambling enterprise. '

Apple and Google have also been named as defendants in lawsuits for hosting the sweepstakes sites. But unlike VGW, neither tech company reacted to DailyMail.com's request for remark.

'We generally don't discuss matters before the courts,' a VGW representative informed DailyMail.com by means of e-mail. 'However, we note that this claim has actually only just been filed with the court and VGW has not been officially served.

'We have full self-confidence in our compliance with all laws and regulations where we operate, and stay positive about the future,' the representative continued. 'We continue to use our free-to-play video games throughout most of The United States and Canada, as we have for more than a decade, developing not just excellent games, user experiences and entertainment, but likewise ensuring this is done safely, responsibly and at the highest level of requirements.

'More broadly, we 'd restate that class actions and other litigations and arbitrations are fairly typical throughout the online social games market (and the US more broadly), and our basic practice is that we mean to strongly protect any claim which might be brought against us.'

The issues in between traditional online gambling 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 name while the NBA is partnered with standard video gaming titans like FanDuel and DraftKings.

'It's ironic that expert athletes are hawking unlawful sports betting 'sweeps' sites while at the exact same time the leagues wish to forecast a strong stance versus unlawful gaming - particularly when trying to tamp down the occasional sports betting scandal,' Glaser told DailyMail.com.

It was just 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 casinos.

Along with VGW, Apple and Google are being demanded hosting apparently unlawful sports betting websites

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

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

Neither an NBA representative nor the gamers' representatives reacted to DailyMail.com's ask for comment. For that matter, spokespeople for Drake, DJ Khaled, Hilton, Seacrest and Phelps likewise disregarded to react to DailyMail.com emails.

Asked if their celeb endorsers have a responsibility to discuss to customers the differences and similarities in between iGaming and sweepstakes casinos, VGW firmly insisted there is absolutely nothing more that requires to be done.

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

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

'Celebrities who provide their names to shady unlawful sports betting websites are, at a minimum, putting their reputations at risk along with courting civil and class actions by customers who allege harm,' Glaser said. 'There is also some risk that state regulators and state attorney generals of the United States rope celeb endorsers into enforcement efforts for facilitating illegal gaming.'

New YorkNBADrakeParis Hilton