CS:GOLotto.com Pushes Legal and Ethical Boundries

YouTube has been lit up with new controversy around two of its stars. ProSyndicate and TmarTn, regular streamers and Counter Strike: Global Offensive players, have allegedly been misleading audiences regarding their endorsements of the popular CS:GO gambling site CSGOLotto.com.  Both creators have posted highly positive videos of the site, winning big and encouraging other players to participate. YouTuber HonorTheCall, however, revealed this week that the site was founded and owned by these two.

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YouTuber H3H3 has also spoken up on the issue, pointing out several discrepancies in TMarTn’s claims of ignorance, such as only updating his YouTube videos to include a disclosure AFTER the initial reveal from HonorTheCall. 

 

TMarTn response to H3H3’s video called it one-sided, stating that “everything we’ve done up until this point has been legal” in a (now removed) TwitLonger.

TMarTn TwitLong

That may be true, but the lack of disclosure is sketchy. It doesn’t confirm wrongdoing such as match fixing or rigging the site to produce favorable promotion. Such Questions which have been raised by several other YouTubers. However, what neither ProSyndicate and TmarTn seem to understand is the difference between what is legal and what is ethical.

 

CSGO Lotto
CS:GO Lotto Home Page

Online gambling is very poorly regulated. Whether it is online poker or fantasy sports leagues, legislators have a hard time regulating the technology. There is a lot of money changing hands with the assertion anyone can be successful, when most of that money ends up in a few select pockets. In the online realm, there is little regard for the regulations that brick and mortar gambling institutions have to deal with that protect people or (at the very least) try to educate people before they lose everything. It’s a very real threat in an industry that’s prone to addition.

In the case of Counter Strike skin gambling, the “industry” is completely unregulated. Cloaked in a niche market that many aren’t even aware of its scale. Some argue there is no need for regulation because there is direct monetary value for digital items such as skins. This has not stopped a thriving economy of virtual goods. Steam, a Valve platform, even features tools for tracking the monetary value of items like these. Organizations like Valve don’t feel the need to regulate this because it’s happening on third party websites like CS:GO Lotto or CS:GO Lounge. Even though Valve gets a percentage of every trade, it gives the implication that they’re putting onus on the website itself.

CSGO Item Steam Value
See, completely worthless.

“Surely, trading skins can’t be that lucrative?” you might ask. Well, these digital items are valued anywhere from a penny to several thousand dollars. Combine that with Bloomberg’s estimate of 2.3 billion bets in 2015, and we can see a substantial market. According to Bloomberg, eSports watchdog SportIM reports that hundreds of thousands of dollars worth of items were wagered on a single Counter Strike match on CS:GO Lounge.  The estimated value of this market is close to two billion dollars.

The opportunity for big payoffs, combined with lack of regulation, creates an environment perfect for abusers to take advantage of.  We have already had examples of match fixing in eSports levels. Valve’s response has been banning players for purported abuse, but not much else. Some facilitators, such as CS:GO Lounge, advise players to abide by their local gambling legislation, washing their hands of people misusing their site. This, by no means, suggests owners such as ProSyndicate and TMarTn are guilty of such behavior. However, their lack of transparency thus far does not create confidence.

These issues are reaching a critical mass, however. As eSports rise in popularity, the economics around them are also attracting attention, most recently in a lawsuit filed against Valve and several third party sites. The lawsuit accuses them of facilitating illegal gambling, in particular for children not old enough to legally gamble. The suit claims these sites “knowingly allowed … and has been complicit in creating, sustaining and facilitating [a] market”. The lawsuit further clarifying Valve’s culpability by saying “In the eSports gambling economy, skins are like casino chips that have monetary value outside the game itself because of the ability to convert them directly into cash,”.

No doubt there is more to come from all parties involved, but what do you think of ProSyndicate & TMarTn? Were they being intentionally misleading or is this a symptom of a larger problem? Let us know in the comments.

Images © CS:GOLotto and Valve

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