On September 7, 2017, the Federal Trade Commission announced that two social media influencers, who are popular among the online gaming community, agreed to settle FTC charges that they deceptively endorsed an online gambling service. Thomas “Syndicate” Cassell and Trevor “TmarTn” Martin were accused of endorsing CSGO Lotto, without disclosing that they jointly owned the company.
The couple was also accused of paying other social media influencers on YouTube, Twitter, Twitch, and Facebook to promote the service. They did so, without requiring these influencers to disclose the payments in their social media posts. As a part of the settlement agreement, the defendants will be required to clearly and conspicuously disclose any material connections with endorsers in the future. They’ll need to do the same for endorser and any product or service promoted.
Also today, the Federal Trade Commission announced that staff had sent warning letters to 21 social media influencers it had contacted earlier in the year regarding their Instagram posts. The agency also updated staff guidance for social media influencers and endorsers. The FTC alleged that Martin, Cassell and CSGOLotto Inc. operated and advertised the csglotto.com website. The service allowed consumers to gamble utilizing CS: GO skins as a virtual currency.
Martin serves as the company’s president, while Cassell serves as the vice president. The complaint alleged that both posted videos of themselves gambling on the site, while encouraging others to do the same. Both also promoted the site through Twitter, without providing adequate disclosure of their business relationship with CSGO Lotto.
The FTC complaint also alleges that the defendants paid other influencers between $2,500 and $55,000 to promote the service. The complaint suggests that the defendants failed to adequately disclose that the two men were owners and officers of the company or that influencers were given compensation to promote it.
The proposed order will prohibit the defendants from misrepresenting that any endorser is independent or an ordinary consumer of a product or service. The defendants will also be required to clearly and conspicuously disclose any unexpected material connections with endorsers.