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

No, they weren't personally in attendance, but the world-famous stars were conspicuously consisted of in a slide presentation on social and sweepstakes gambling establishments - the questionable sites using both free casino-style video games and profitable prizes, such as cash, present cards or cryptocurrency. In one ad, the fist-pumping Seacrest is seen plugging Chumba Casino, where anybody can 'bet complimentary,' while a crop-topped Hilton holds a chip for sweepstakes operator, Wow Vegas, in the other.

The websites are simply 2 cogs in the multibillion-dollar market that now finds itself besieged by claims. In the eyes of numerous gaming corporations, not to discuss suit plaintiffs and state regulators, sweepstakes gambling establishments act as traditional gambling establishments, only without the oversight, consumer defenses and tax laws. So not just can they avoid the high 24-percent federal gambling levy, however sweepstakes operators aren't subject to regulatory difficulties like anti-money laundering and responsible-gaming defenses.

One operator, Australia-based Virtual Gaming Worlds (VGW), reported $4 billion in earnings last year alone. Now the company deals with accusations of unlawful gambling in a New york city suit that declares VGW uses celebrity endorsers to 'develop a veneer of authenticity' around its product. (See VGW's statement listed below)

'I'm uncertain" if you do not trust us, you can rely on Paris Hilton" is a winning message for business operating multibillion-dollar illegal operations out of locations 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 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 provide any distinctions between traditional gambling and sweepstakes play.

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

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

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

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Instead, ads generally focus around the social element of the gambling establishments, while omitting the potential for actual sports betting losses.

Others tempt clients with guarantees of rewards. One such operator, Stake, ran a social networks ad flaunting Drake's vehicles, aircrafts and estates before pivoting to video footage of the rapper playing online casino-style video games.

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

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

The discrepancy between gaming 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), explained its members are not in direct competition with online gambling establishments and sportsbooks. Furthermore, according to SPGA information, the majority of the players on social-sweepstakes casinos are playing for free.

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

Social casinos offer consumers an opportunity to play casino-style video games with buddies. Players have the option to purchase valueless currency often described as 'gold coins,' which can not be exchanged for genuine cash, but can be used to unlock different features within the games.

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

And therein lies the capacity for financial losses, like the ones declared by plaintiffs in Florida, Georgia, New Jersey and New York. One player told 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 money and other things of worth.

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

Social sweeps gambling establishment Stake ran an ad showing off Drake's cars and trucks, aircrafts and mansions

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

Traditional online gambling establishments are prohibited in all but 7 states, which has actually helped to sustain the popularity of sweepstakes gambling establishments.

Anyone over the age of 18 can access the sweepstakes sites, which don't require usually require recognition. However, sites like Chumba will request for IDs from players attempting to withdraw any funds.

Many websites, like the crypto-compatible Stake, enable customers to submit mail-in ask for complimentary sweeps coins, supplied the players follow painfully specific instructions. What's more, players are often rewarded with sweeps coins merely for signing up, thus providing a factor to try their hands at any variety of casino video games for an opportunity to win - or lose - real cash.

So why are sweepstakes websites allowed to run in 48 states, while online casinos are banned 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 way of promoting their bread and butter.

'Social sweepstakes games are just a kind of online entertainment,' an SPGA spokesperson told DailyMail.com by email. 'No purchase is required to play at social gambling establishments with sweepstakes rewards. Consumers never have to spend for an opportunity to win prizes. That absence of a purchase requirement - or" factor to consider" - is an important difference between social sweeps and standard online gaming sites like gambling establishments.'

Consider the manner in which McDonald's utilizes its yearly Monopoly video game to promote its food: Customers aren't paying to bet, however rather they're buying hamburgers and french fries that use them the opportunity to win lucrative rewards, such as a $1 million jackpot.

And without a purchase requirement, or 'factor to consider', the game itself doesn't meet the meaning of gaming in the US.

'Sweepstakes are an enduring technique for promoting all type of daily organizations in the United States, everything from burgers to publication subscriptions to coffee and home improvement stores,' the SPGA spokesperson told DailyMail.com. 'Sweepstakes promotions 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 industry experts, that argument doesn't cut it.

For beginners, gaming attorney Daniel Wallach explains, McDonald's Monopoly game does not run indefinitely. Rather, it has a distinct beginning and end, thereby recommending the sweepstakes is not the fast-food giant's main product. Instead, the sweepstakes is being used to promote genuine products like fries, shakes, and the Filet-O-Fish.

'They do not last permanently and they're typically not tied to casino-style video games of possibility,' Wallach informed DailyMail.com. 'They're simply cash free gifts.

'The sweepstakes [casinos] have none of the attributes commonly associated with McDonald's-style sweepstakes promotions,' Wallach continued. 'Besides running in perpetuity, the sweepstakes gambling establishments use" casino-like" payments, generally 80 percent or more of revenues, whereas the normal payment portion for a momentary marketing sweepstakes is an unimportant share of the income earned by the company [generally less than one percent]'

Wallach is fast 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 establishments have because been shuttered over accusations of prohibited gaming.

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

Now, Wallach argues, social sweeps gambling establishments ought to deal with comparable analysis.

'These distinctions are not arbitrary,' Wallach said of social sweeps gambling establishments. 'They have actually consistently been pointed out by courts and state lawyer generals as essential consider determining that a sweepstakes promotion remained in truth a guise for prohibited gaming.'

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

'Consumers are being denied of protections and states are passing up substantial tax and earnings chances as this sports betting changes that performed through managed 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 dozen states.

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

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

In the most recent claim, which is largely comparable to its predecessors, New York state homeowners Lamar Prater and Rebecca Pratt both claim to have actually lost well over $1,000 to VGW, which is explained in the filing as an 'prohibited sports betting enterprise. '

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

'We normally don't comment on matters before the courts,' a VGW spokesperson informed DailyMail.com by means of email. 'However, we note that this claim has actually only simply 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 confident about the future,' the spokesperson continued. 'We continue to provide our free-to-play video games throughout many of The United States and Canada, as we have for more than a decade, creating not just excellent video games, user experiences and entertainment, however also guaranteeing this is done safely, responsibly and at the highest level of standards.

'More broadly, we 'd reiterate that class actions and other lawsuits and arbitrations are fairly common throughout the online social games market (and the US more broadly), and our basic practice is that we plan to intensely protect any claim which may be brought versus us.'

The concerns between traditional online gaming and sweepstakes gambling establishments could show troublesome 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 paradoxical that expert athletes are hawking unlawful sports betting 'sweeps' sites while at the same time the leagues want to predict a strong stance against prohibited gambling - particularly when attempting to tamp down the periodic gambling scandal,' Glaser informed DailyMail.com.

It was just eight months ago that Toronto Raptors forward Jontay Porter received a lifetime restriction from the NBA over accusations he conspired with bettors. 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 allegedly illegal gambling websites

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

'I 'd expect that a league crackdown on professional athletes backing sweepstakes websites 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 disregarded to react to DailyMail.com e-mails.

Asked if their celebrity endorsers have a duty to describe to customers the differences and similarities between iGaming and sweepstakes casinos, VGW firmly insisted there is nothing more that needs to be done.

'We have full confidence in our influencer and ambassadorial collaborations, and our service practices more broadly,' the spokesperson said. 'Some of our values are" our players come initially" 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.

'Celebrities who provide their names to dubious illegal gambling sites are, at a minimum, putting their reputations at danger along with courting civil and class actions by customers who declare harm,' Glaser said. 'There is also some threat that state regulators and state chief law officers rope celebrity endorsers into enforcement efforts for assisting in prohibited gambling.'

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