Through highly dramatized titles for their YouTube videos, the owners have goaded followers into signing up and playing on CS:GO Lotto under false pretenses by having themselves "win" large payouts through betting.
The two privileged young men, Trevor "TmarTn" Martin and Thomas "Syndicate" Cassell, agreed to a deal with the FTC which requires them to report their financial activity to the commission, and they'll have to disclose any endorsements they enter into going forward.
Now the duo must "clearly and conspicuously disclose any material connections with an endorser or between an endorser and any promoted product or service." .
As part of the FTC complaint, it has also been revealed that Martin and Cassell paid other (unnamed, it seems) YouTube creators "between $2,500 and $55,000" to promote CSGOLotto.
This morning, the FTC announced that it had reached a settlement in its first-ever complaint against individual social media influencers and that it had sent warning letters to other prominent influencers.
Explaining why there was no penalty, the FTC said it normally can't fine defendants for a first offense.
The fallout prompted responses from both Martin and Cassell, with Martin posting a lengthy video apology in the hopes of clearing his name. The order also requires clear and conspicuous disclosures of any unexpected material connections with endorsers.
Martin and Cassell started CSGOLotto, Inc. and its website in 2015.
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.
In June of a year ago, it was revealed that both TmarTn and Syndicate had ownership stakes in CSGO Lotto.
In addition, the FTC have updated their Endorsement Guidelines and, relating to a separate incident, sent "warning letters" to 21 "Influencers" who had previously been contacted in April 2017 with "educational letters".
The Commission today also issued an updated version of The FTC's Endorsement Guides: What People are Asking, a staff guidance document that answers frequently asked questions. Today's consent agreement will be subject to public comment until October 10th, at which point the commission will decide whether to make the order final. The FTC clearly don't have the regulatory muscle to deal with this "new" form of gambling, and USA gambling regulation is also failing to adapt quickly enough to this development.
If they violate the FTC's order, they'll face penalties up to $40,654.