Two CSGO Lotto skin-betting site owners, who posed as US-based YouTubers blogging about their exploits without declaring that they actually owned the site, were spared fines by the Federal Trade Commission (FTC) this week.
Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell would promote CSGO Lotto with videos bearing titles such as “How to Win $13,000 in 5 Minutes,” until they were exposed last May by one anonymous eSports watchdog and fellow YouTuber, known only as “Honor TheCall.”
HonorTheCall produced documents showing Martin and Cassell were listed as president and vice-president, respectively, of the company they were promoting. The pair regularly uploaded videos of themselves appearing to win large prizes on the site, prompting accusations that the videos were rigged for promotional purposes.
Community Let Down
CSGO Lotto enables lottery-style gambling using “skins,” colorful weapons that act as the in-game currency in the video game Counter Strike: Global Offensive. But because they can be transferred out of the game itself and onto third-party sites, skins have assumed a real-world value as a kind of digital currency.
Skin-gambling exists in a regulatory gray area, since in most jurisdictions it is not clear whether gambling with in-game digital items constitutes gambling at all, although efforts have recently been made in the UK and the Isle of Man to bring their regulatory frameworks up to speed.
In fact, the FTC said the case was the first it had ever received against “social media influencers” and, lacking formal regulatory guidelines on this new form of gambling, it may have been confused about how to proceed.
The commission merely ordered that the pair must, in the future, “clearly and conspicuously disclose any material connections with an endorser or between an endorser and any promoted product or service.”
But to the CS:GO community and the vloggers’ one-million-plus subscribers who’d felt cheated by the deception, that constituted no punishment whatsoever.
Prosecution in the UK
In February of this year, the UK Gambling Commission secured the world’s first prosecution for charges related to gambling with in-game items. In a remarkably similar case, two YouTubers and owners of the site FUT Galaxy, which offers gambling using FIFA Coins, were found guilty of offenses under the Gambling Act.
Craig “NepentheZ” Douglas and Dylan Rigby were fined a total of £265,000 ($349,000) for offenses that included inciting children to gamble, after the court was shown footage of a 12-year-old boy using the site.
Meanwhile, the FTC said it has written to 21 “social media influencers” warning that all “material connections” between an endorser of a product and the product itself should be “clearly and conspicuously disclosed.”
But with apparently little risk of prosecution in the US, there seems to be minimal incentive for them to do so.