FTC settles CS:GO Lotto influencer corruption complaint
You’ll recall that Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell ran afoul of both Valve and the law last year, when the Washington State Gambling Commission began cracking down on Valve for allegedly facilitating gambling via a skin API that allowed websites like CS:GO Lotto to use skins as gambling currency, netting the site a billion bucks last year. Indeed, there was even a class action RICO lawsuit filed against both Valve and several CS:GO gambling website owners, including Martin and Cassell, though that suit was dismissed on jurisdictional grounds.
That wasn’t the end of it, however; last week, the FTC settled its case against the CS:GO Lotto duo for failing to disclose that they owned the website while promoting it through various seemingly unrelated influencer platforms, particularly YouTube, both its own platforms and paid influencers’ platforms.
“The Commission’s complaint alleges that Martin, Cassell, and their company misrepresented that videos of themselves and other influencers gambling on the CSGO Lotto website and their social media posts about the website reflected the independent opinions of impartial users of the service. The complaint charges that, in truth, Martin and Cassell are owners and officers of the company operating the CSGO Lotto website and the other influencers were paid to promote the website and were prohibited from impugning its reputation. Finally, the complaint alleges that a number of Martin’s, Cassell’s, and the gaming influencers’ CSGO Lotto videos and social media posts deceptively failed to adequately disclose that Martin and Cassell are owners and officers of the company operating the gambling service, or that the influencers received compensation to promote it. The proposed order settling the FTC’s charges prohibits Martin, Cassell, and CSGOLotto, Inc. from misrepresenting that any endorser is an independent user or ordinary consumer of a product or service. The order also requires clear and conspicuous disclosures of any unexpected material connections with endorsers.”
The FTC has isolated the case as its “first against individual influencers” for failing to disclose such financial relationships; it has since further updated its endorsement guide with additional rules and clarifications for internet influencers, issuing “letters of warning” to some of the biggest offenders.