HellRaisers made distinct changes to its sponsored content regarding bitcoin mining and gambling, two weeks after a Slingshot report criticized the organization’s lack of transparency.
The post, which is a clear advertisement for HellRaisers’ sponsor, sportsbet.io, called betting with bitcoins “profitable.” It also suggested users bet on HellRaisers matches using the website, which is a direct conflict of interest. HellRaisers’ play in any Counter-Strike or Dota 2 match could affect how much money the organization or its partner could profit from the betting website, which could be problematic.
Why is it profitable to bet with bitcoins?
We'll tell you why betting with bitcoins is more profitable.
Read here: https://t.co/jnq0bOicKM pic.twitter.com/ifKZm777Xq
— HellRaisers (@HELLRAISERSgg) October 5, 2017
Hellraisers has since added a small disclaimer: “Every user is solely responsible for decisions related to betting. Keep in mind that you perform all gambling actions at your own risk. The article is sponsored content.”
HellRaisers has since published another article advising its audience to mine bitcoin, and it contains the same disclaimer at the bottom. The ad again offers increased payouts for betting on HellRaisers matches, which continues to encourage betting on the team’s own matches.
Aside from any potential legal problems with the post, Ian Smith, commissioner of the Esports Integrity Coalition, outlined two problematic aspects of it.
“First, you’ve already identified the moral issue raised by their promotion – the lack of recognition of their many younger fans, the false idea that betting with bitcoin is somehow more profitable than using other currencies/skins or, indeed, that betting is ‘profitable,’ Smith wrote to Slingshot in an email. “Finally, the lack of disclosure of HellRaisers’ status in this relationship is very problematic – they ought to disclose how they profit from their fans placing bets under this scheme.”
The initial post is also in violation of the ESIC’s anti-corruption code because it is an offense to “Directly or indirectly soliciting, inducing, enticing, instructing, persuading, encouraging, intentionally facilitating or authorizing any other party to enter into a bet in relation to the result, progress, conduct or any other aspect of any match,” Smith said.
If HellRaisers were to post the aforementioned tweet or articles while playing in an ESIC member event (such as ESL or DreamHack, for instance), the organization would face disciplinary action from the ESIC, Smith said. He closed with a polite suggestion for HellRaisers: “I would suggest that HellRaisers seek expert legal advice before repeating this poorly thought out execution of a sponsor/affiliate deal. They may be based in Ukraine, but they have to play all over the world and most countries’ legal systems will not be as accommodating as the Ukrainians.”
HellRaisers’ status as an organization based out of Ukraine makes the legality of its posts unclear in its home country. But it’s possible that even with the added disclosure, HellRaisers’ posts would be still be illegal under U.S. law, esports attorney Roger Quiles said.
The US Federal Trade Commission established rules against deceptive advertising practices that brands must follow in posting sponsored content, including social media.
“The post itself would need to state that it is sponsored content, which it does, albeit at the bottom of the article and in much smaller font,” Quiles said. “By burying the sponsorship of the article and making the text smaller, it can be said that the disclosure made was not sufficiently ‘clear and conspicuous’ as the FTC would require.
“Regarding HellRaisers’ tweet promoting the article, there is no indication that the article is sponsored content. This could have easily been done by adding ‘#ad.’ Not disclosing such in the social media post would be violative of the FTC rules.”
HellRaisers declined comment.