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A number of well-known, gaming-focused YouTube personalities are in trouble over videos relating to gambling in Counter-Strike: Global Offensive. They all shared positive videos about third-party betting sites without disclosing their relationships to those sites.

It amounts to a transparency issue: these guys ran what amounted to ads on their channels without letting viewers know about their financial involvement with the subjects of those videos. Not only is that unethical by most standards, it's also a breach of the Federal Trade Commission's endorsement guidelines.

The whole affair is a big, complicated mess, so we're taking some time to break it all down. What is the background? Who are the key figures? Read on to better understand the wrongdoings that were committed and the wider issues at play.

There's gambling in Counter-Strike?

Sort of. The gambling that's at issue with these YouTubers doesn't happen inside of Counter-Strike, but it's both inspired and fueled by an in-game unlock system that channels the thrill of hitting casino jackpots.

It's also important to note: while Valve's popular online shooter does big business in the esports world, the gambling in this case has no connection to Counter-Strike professional play. It's actually about weapon skins, cosmetic upgrades that don't enhance play.

Image: Valve Software

In Counter-Strike: Global Offensive, players earn crates as they play that can only be unlocked by spending real money, at $2.50 per crate. These crates contain skins — paint jobs for your guns and knives, essentially — of varying, clearly marked rarity.

Opening a crate brings up what amounts to a slot machine that spins through a set of possible skins. Wherever it lands is what you unlock. The crates could just as easily spit out a random skin, but the slot machine presentation makes unlocking a new one more exciting.

At this stage of the process, the only money changing hands goes from the player to Valve directly. They're in-app purchases. The slot machine thing is just a special effect; your $2.50 is effectively buying a new, randomly selected weapon skin.

How are others making money when Valve's getting paid?

Counter-Strike exists on Valve's Steam service, which also includes a community marketplace where players can sell digital items from supported games — such as Counter-Strike weapon skins — to other players. It's like an eBay for in-game unlocks.

Due to the varying rarity of Counter-Strike weapon skins, a living economy has taken shape. More common skins sell for pocket change, but the rarest of the rare can cost hundreds of dollars in real, actual money.

A screenshot of some of the more expensive skins currently available in the Steam Market for 'CS:GO'. Image: Valve Software

Valve takes a cut of every sale, which is an important fact for understanding why the company is cool with the reseller marketplace, and the third-party alternatives — which are at the heart of this scandal — that have sprung up around it.

The more perceived value a skin has, the more money Valve stands to make every time one sells on Steam. Why would the company want to stand in the way of that?

But selling secondhand digital goods isn't the same as gambling.

That's true, but it's important to understand all of these factors as we get to the root of the current problem: third-party gambling.

These third-party sites can skirt around numerous gambling regulations.

Sites like CSGOLotto.com let players compete for skins in what amounts to a coin toss. A player wagers one or more of their own skins against other players' skins and then a computer brain behind the scenes selects a winner. Simple.

It's not technically gambling with real money, which means these third-party sites can skirt around numerous gambling regulations (including those that prohibit minors from participating). And since Valve lets players assign value in a reseller market, the Steam gatekeeper is in the clear as well.

But there's still money to be made. You could spend $2.50 to unlock a crate and, by chance, get an exceedingly rare skin that you could then turn around and sell for a profit on Steam. Alternatively, you can wager it on a third-party site and potentially boost your profit even more by winning a huge jackpot.

Where do the YouTubers come in?

Now we come to the heart of this scandal. Or really, two scandals that flared up in close proximity to one another.

First there's the case of CSGOLotto and its connection to YouTube personalities Tom "ProSyndicate" Cassell and Trevor "TmarTn" Martin. Both have shared videos featuring their CSGOLotto wins, like the Syndicate video below.

There's just one problem here: Cassell and Martin are both owners of CSGOLotto.They both have an ownership stake in CSGOLotto, a site where they've "won," on video, thousands of dollars worth of skins.

Now if you click through to the YouTube source on the above video and read the description, you'll see a note at the bottom that mentions it's a sponsored piece. There's nothing in the video to suggest it's an ad. Further, Cassell's disclosure in the description allegedly wasn't there prior to this scandal emerging.

Martin has a number of CSGOLotto videos as well, but they've all been set to private. A few were captured and saved by other YouTubers, however, and you can see one below.

Cassell has almost 10 million YouTube subscribers and Martin has close to 2 million. The millions who watch their videos see these very exciting, highly positive CSGOLotto experiences with — at best — minimal indication that said experiences are rigged.

This is against the endorsement guidelines laid out by the FTC. You can't hype the gambling site you own by pretending to win big while not letting people know it's all a crock. That's called deceptive advertising.

Separate from the Cassell/Martin situation is another YouTuber involved with another Counter-Strike gambling site. YouTuber Lewis "PsiSyndicate" Stewart (yes, a different Syndicate) has come forward to admit that two of his own videos were rigged.

Unlike Cassell and Martin, Stewart isn't an owner of Steamloto, the site he's involved with. He admits in a new YouTube post that they approached him about creating videos to hype the business, which is more of a blind auction site compared to CSGOLotto's slot machine wagers.

That distinction doesn't really matter; it's enough to know that Steamloto and CSGOLotto both give users the chance to gamble on better skins. What's important is Stewart's undisclosed relationship with Steamloto.

Together, they rigged two videos to hype the site that together have attracted more than 1.5 million views. He openly admits to the wrongdoing in the above video.

Much like Cassell's CSGOLottery ads, Stewart's Steamloto video descriptions have since been updated to disclose that they are paid ads.

Have they had anything to say in their defense?

Stewart posted his video unprompted, after the CSGOLotto news emerged. It's a confession.

He also spoke with Eurogamer about the rigged videos, striking a tone similar to the one in his confession video.

"Everything I gained from videos I gave away to prove to people it wasn't rigged... but it was. I'm not saying I'm an angel," Stewart said. "I'm not. I am only human."

Cassell issued a statement in a series of tweets.

I apologize to anyone who feels mislead regarding the ownership of @CSGOLotto. I will always be more transparent from here on out! — Mr. Syndicate (@ProSyndicate) July 4, 2016

I do however stand very firmly behind the fact that @CSGOLotto has never & will never scam/steal from players. — Mr. Syndicate (@ProSyndicate) July 4, 2016

I've always disclosed that my CSGO videos were sponsored & even asked a YouTube employee if anything more was needed & they said it wasn't. — Mr. Syndicate (@ProSyndicate) July 4, 2016

Transparency from here on out! 👏 — Mr. Syndicate (@ProSyndicate) July 4, 2016

Martin also addressed the scandal on Twitter, but with more of a personal account of how the news is affecting him. A later tweet promised to address the news more directly in a video to be posted on Wednesday.

I'll make a response to all this tomorrow. Unfortunately considering the situation it needs to be all official and stuff.



❤️ you guys. — TmarTn (@TmarTn) July 4, 2016

Forreal, YouTube and making content is my passion. Has been for over 6 years. Still continues to be. Y'all mean the world to me. — TmarTn (@TmarTn) July 4, 2016

I love those who are supporting me thru this, but understand those who are upset/hurt. It'll all be laid out tomorrow ❤️ — TmarTn (@TmarTn) July 4, 2016

Martin published his own video statement on Wednesday afternoon.

He offers a brief apology, then speaks at length to address allegations that CSGOLotto encourages gambling in minor, as discussed in the h3h3 Productions video at the bottom of this post.

Martin removed the video not long after he shared it, presumably due to the response it was met with. Many observed his lack of remorse in the video, and were critical of the fact that his apology — which was roughly "I'm sorry to those who felt I was misleading" — felt more like a justification that partially blamed his viewers.

Martin has yet to address the video's removal or offer up a more thorough explanation of his actions.

Of course, nothing ever fully disappears from the internet, as you can plainly see.

Martin may try to re-write the script on his actions in a subsequent confessional, but his original video was re-uploaded by other YouTube users shortly after it was pulled.

So three dudes misled their viewers. What's the bigger picture?

As the notion of YouTube "influencers" — online personalities who speak to a wide audience — have caught the attention of businesses that sell products, media watchdogs have begun to wonder about the relationships between these parties.

Cassell and Martin are both owners of CSGOLotto.

If you're an upstanding member of the press, disclosure is as reflexive as breathing. When you're writing or speaking about a subject with whom you have a prior relationship, you let your audience know.

Influencers aren't a part of the traditional media, however. Many lack the training, the years of having college professors and full-time editors hammer home the importance and the particulars of ethical conduct.

That's not to suggest Cassell, Martin or Stewart are victims of the system they've unintentionally become a part of. It doesn't take much more than common sense to know that rigging a wager to make your website look more awesome isn't okay.

More than that, this has happened before. Cassell himself was once part of a larger dust-up involving Microsoft and Machinima. Cassell wasn't the only one involved, but he specifically received $30,000 in 2014 for producing two Xbox One videos that carried one notable requirement: they had to frame Microsoft's product in a positive light.

Cassell expresses excitement after "winning" a big CSGOLotto jackpot in one of his YouTube videos. Image: Tom 'ProSyndicate' Cassell

A subsequent FTC complaint took Machinima to task for failing to disclose the endorsement. The company ended up settling, avoiding fines but agreeing to 20 years of FTC oversight — monitored probation.

These latest wrongdoings are just more examples that illustrate how YouTube (and the streaming video space as a whole) is still an untamed frontier when it comes to product endorsements. It's very easy to skirt around the rules and claim ignorance, especially when you're a private citizen.

No one's suggesting you stop watching YouTube videos, but it's important to be wary. The appeal of YouTube's "citizen journalism" and the so-called "real" perspective it provides is very easily exploited by the ignorant and the clever. It's not clear which of those umbrellas Cassell, Martin and Stewart fall under, and it's really not important. Just consider what they've done and learn from it.

If you're looking for additional context on the Cassell/Martin situation, check out this breakdown from h3h3 Productions, which disseminates YouTuber HonorTheCall's research (Part 1, Part 2, Part 3) into CSGOLotto gambling, which first uncovered the YouTubers' ownership stake.

Have something to add to this story? Share it in the comments.

Updated July 7 at 5:28 p.m. ET with Martin's video statement addressing the CSGOLotto scandal.

Updated July 8 at 7:00 a.m. ET to note the removal of Martin's video.