The case regarding Counter Strike Global Offensive’s Lotto lawsuit has been settled with the FTC.
Last year, two YouTubers by the name of Trevor Martin and Tom Cassell, better known as TmarTn” and “Syndicate” respectively, were indicated by Valve with a cease and desist letter due to their promotion of CSGO Lotto on their respective YouTube channels. Both Martin and Cassell, who have a combined subscriber base of close to 10 million viewers, failed to disclose that they were both founders of the CSGO Lotto, which was revealed by several other YouTube channels.
The scandal would see both men be the primary target from Valve, who vowed to eliminate gambling and Lotto sites that would be involved in their games, including Counter Strike. Valve has been struggling with online gambling for a long time, including issues with the Washington Gambling Commission. As a result of this action, the Federal Trade Commission filed a suit against both Martin and Cassell regarding their involvement with the CSGO Lotto, and the failure to enclose their role as the Lotto’s founders to the general public until the scandal broke.
CSGO Lotto is one of many sites that allow players to bet real world money or skins for a chance at winning virtual Counter Strike: Global Offensive Skins. The skins – which can be earned in the game by paying $2.50 for an unlock key that grants a random item – are often sold for large sums of money, sometimes upwards of $10,000 dollars. The winner, selected by a roulette wheel spin, receives a specific item gambled upon, while the website itself takes a cut of the bets.
Both Martin and Cassell have posted videos of not only using the CSGO Lotto website, but of winning on them, including a playlist of videos featuring the Lotto website, indicating them in the scandal as willingly not disclosing their ownership of the company. Those videos have since been taken down on Youtube.
The settlement with the FTC states that both Martin and Cassell must “clearly and conspicuously” disclose any material connections with an endorser or between an endorser and any promoted product of service. In other words, both men must make it visibly clear that they are not only the owners of CSGO Lotto, but provide full disclosure to their viewership that they have a stake in CSGO Lotto in the future. There is no fine levied on either Martin or Cassell as a result of this, but they will be closely monitored in the future.
The decision is the first time that the FTC has ruled in regards to “individual influencers” such as YouTube stars. “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, as reported on the official FTC website. “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.”
As a result of this ruling, the FTC has drafted an educational letter to send to influencers on social media, explaining that any endorsements of a brand that have a “material connection” to the marketer must be clearly disclosed to the public. The FTC also updated their own endorsement guides, which is a staff-guided FAQ regarding the guidelines those who use social media should follow when discussing or disclosing endorsements.
The FTC has been involved in several cases regarding video game companies and social media in the past. Most notably, the FTC would be involved in the settlement between Warner Bros. over paid YouTube videos, when Warner Bros. failed to “adequately disclose that it paid it paid online influencers.”
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