The FTC and the CSGOLotto case
Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell have settled with the FTC after having been accused of using their sizable social media presences to direct new users to CSGO Lotto, a skin betting platform in which both Martin and Cassell had undisclosed stakes.
The settlement requires Martin and Cassell to abide strict guidelines in how they represent any products and services in the future.
More from the FTC:
“Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts,” said FTC Acting Chairman Maureen Ohlhausen in a press release. “This action, the FTC’s first against individual influencers, should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions.”
Social media fame used to improperly advertise
Martin and Cassell’s prominence coincided with the growth and elevation of a gambling marketplace specific to Counter-Strike: Global Offensive’s in-game goods. These digital goods, generally in the form of colorful weapon skins, can be traded between users.
As the CS:GO player base expanded, so too did the opportunities to gamble with in-game skins and their real-world value. Martin and Cassell seized on the opportunity, backing the CSGO Lotto gambling platform, designed specifically to encourage skin gambling.
The pair then took to their popular YouTube channels to create videos in which they gambled, and won, through their own platform. These videos would sometimes come with titles promising viewers the means to quickly earn thousands of dollars.
Neither Martin nor Cassell properly disclosed their involvement with CSGO Lotto during their promotion of the service. That promotion crept across multiple social media outlets and generated millions of views.
Not long after the pair were outed as being involved with CSGOLotto, the betting platform shut down. But that wasn’t the end of things.
The FTC gets involved
The Federal Trade Commission’s mission is to protect domestic consumers in the United States. As such, it opened an investigation into Martin and Cassell’s activities.
That investigation led to this week’s settlement. It dictated that the pair must clearly disclose any material connections with products and services they endorse. Also, they may not misrepresent their independence from any such product or service.
The entire episode has highlighted just how much power social media influencers wield in the nascent esports industry. That influence is particularly powerful when it comes to activities such as gambling. The very nature and legality of gambing in and around esports is still developing. This involvement from the FTC, which marks the first time the FTC has ever acted against individual social media influencers, is likely a sign of things to come.
As the industry continues to grow and the importance of esports betting grows along with it, watchdog agencies such as the FTC will increasingly make their presence felt.
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More from the FTC
The FTC went into great detail about its issues with what Martin and Cassell did:
Martin is the company’s president and Cassell is its vice president. As alleged in the complaint, each posted YouTube videos of themselves gambling on their website and encouraging others to use the service. Martin’s videos had titles such as, “HOW TO WIN $13,000 IN 5 MINUTES (CS-GO Betting)” and “$24,000 COIN FLIP (HUGE CSGO BETTING!) + Giveaway.”
Cassell posted videos with titles such as “INSANE KNIFE BETS! (CS:GO Betting),” and “ALL OR NOTHING! (CS:GO Betting).” In all, Cassell’s videos promoting the CSGO Lotto website were viewed more than 5.7 million times. Martin and Cassell allegedly also promoted the site on Twitter without adequately disclosing their connection to CSGO Lotto.
According to the FTC’s complaint, Martin, Cassell, and their company also had an “influencer program” and paid other gaming influencers between $2,500 and $55,000 to promote the CSGO Lotto website to their social media circles, while prohibiting them from saying anything negative about the site.