The site run by the pair, CSGO Lotto, allowed players to bet gun "skins" from the game Counter-Strike: Global Offensive that alter the look, but not the function, of weapons. Such skins can essentially be used as gambling chips, since they can exchanged at Valve's Steam Marketplace for real cash, with Valve taking a 15 percent cut.
Martin and Cassell ran YouTube segments showing themselves "winning" skins at CSGO Lotto, when in fact they owned the site. They also reportedly paid YouTube personalities up to $55,000 for faked-up videos also showing them winning valuable loot.
Explaining why there was no penalty, the FTC said it normally can't fine defendants for a first offense. However, it did said that the pair could face amends of more than $40,000 per violation if they fail to "clearly and conspicuously disclose" any future activity.
The commission has updated its guidelines to make clear that social media influencers must disclose any financial or other connections to sites they endorse. It also sent warning letters to 21 social media personalities about their Instagram posts. "Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts," Chairman Maureen Ohlhausen said in a statement.
So far, the pair have essentially escaped punishment, and the FTC's decision is likely to anger parents of minors that lost hundreds of dollars or more. Valve and CSGO Lotto (and other gambling sites) have both faced lawsuits, but so far, the cases have been dismissed, bounced around different courts, and moved to arbitration.
Last year, Valve sent cease-and-desist orders to 23 gambling sites after news of the CSGO Lotto scandal broke. It was later ordered by Washington State's gambling commission to stop gun skin transfer activities, but vehemently denied any culpability, saying it does not engage in, promote or facilitate gambling. "If there is a specific criminal statute or regulation you believe Valve is violating, please provide a citation. We are not aware of any such law that Steam or its games are violating," company counsel Liam Lavery said.