FTC Warns Caesars, MGM And Others About Misleading Endorsements


Dreamstime/James Group Studios Inc.

Online sportsbooks and casinos are becoming almost as popular around the US as the nation’s traditional pastime, baseball. Now, online gambling operators are probably thinking of the famous words of the late New York Yankees player Yogi Berra: “It’s like deja-vu, all over again.”

That’s because the Federal Trade Commission (FTC) is once again putting businesses on notice that anyone they pay to endorse them needs to disclose that paid status to consumers. The FTC has issued similar reminders many times before to other companies in other industries. This time around, those getting the talking to are entities like MGM Resorts International and Caesars Entertainment, known in online gambling circles for their BetMGM and Caesars Sportsbook and Casino products, respectively.

Caesars and MGM were among more than 700 companies the FTC notified last month. The FTC says these businesses are “using endorsements to deceive consumers.”

The deception is in the form of “fake reviews and other misleading endorsements,” according to the FTC.

The FTC announcement said:

“By sending a Notice of Penalty Offenses to more than 700 companies, the agency is placing them on notice they could incur significant civil penalties — up to $43,792 per violation — if they use endorsements in ways that run counter to prior FTC administrative cases.”

However, the FTC announcement also said:

“A recipient’s presence on this list does not in any way suggest that it has engaged in deceptive or unfair conduct.”

FTC media contact for this announcement, Jay Mayfield, didn’t immediately return Online Poker Report‘s request for comment. OPR also contacted representatives of Caesars and MGM for this story.

How the FTC endorsement rules work

The tricky part of this situation is that the companies may not be the ones failing to disclose endorsements. Paid social media influencers, bloggers accepting gifts for coverage, or other advertisers may be failing to properly disclose their relationships. Even so, if the FTC discovers violations, the brands will be the ones paying the fines.

Such rulings are rare, though. When the FTC begins to act on alleged violations, its efforts often result in settlements.

For instance, the now-defunct Machinima – an online entertainment network that was owned by WarnerMedia – settled with the FTC in 2015.

According to the FTC:

“[Machinima allegedly] engaged in deceptive advertising by paying ‘influencers’ to post YouTube videos endorsing Microsoft’s Xbox One system and several games. The influencers paid by Machinima, Inc., failed to adequately disclose that they were being paid for their seemingly objective opinions, the FTC charged.”

Caesars, MGM are far from alone in receiving notifications

The Oct. 13 FTC announcement may be the first notice for a lot of the companies, including names familiar to retail gamblers (Las Vegas Sands Corporation) and gamers (Epic Games).

However, among the more than 700 businesses on the FTC list are those where company leaders theoretically already know the commission’s rules on third-party endorsements. In addition to retailers and manufacturers, the lists contains companies that are literally in the business of communication. Examples include advertising, marketing and public relations agencies.

Then there are brands that have been warned before.

For example, it’d be difficult for Airbnb executives to claim they don’t know about the FTC rules.

Per an Adweek article from February 2016:

“Beyoncé may be landing on the hot seat along with Airbnb. On Wednesday, Queen Bey was trending on Facebook for singing the praises of Airbnb on Monday in her post about where she stayed during the Super Bowl. At issue: Did the brand pay her for the endorsement? If so, FTC regulations dictate disclosure.”

However, the vacation rental company is on the Oct. 13, 2021, list from the FTC.

How US online gambling operators can stay on the right side of the FTC

In social media posts and online reviews, the FTC says anyone accepting payment from those companies needs to disclose that fact. That way, consumers can weigh the advice they’re receiving.

For instance, Berra’s home state of New York just selected operators to license for mobile sports betting. If any notable sports figures agree to endorse those operators, they’ll need to tell consumers if they’re being paid to do so.

The FTC rules suggest adding disclosure elements to tweets, like “#ad” and “#sponsored” hashtags.

Paid or money-making online reviews need to include disclosures up high or even at the top of reviews – not below money-making links or reviews.

The FTC suggests wording like:

“I get commissions for purchases made through links in this post.”

There are more complex areas, including affiliate marketing sites*. The FTC’s FAQ includes the following entry on those:

“It’s clear that what’s on my website is a paid advertisement, not my own endorsement or review of the product. Do I still have to disclose that I get a commission if people click through my website to buy the product?

If it’s clear that what’s on your site is a paid advertisement, you don’t have to make additional disclosures. Just remember that what’s clear to you may not be clear to everyone visiting your site, and the FTC evaluates ads from the perspective of reasonable consumers.”

Considering entities other than the FTC are closely monitoring online gambling operators’ marketing actions lately, with state gaming officials considering additional enforcement, another Berra quote may be apt for this situation.

Berra said:

“When you come to a fork in the road, take it.”

* Note that Online Poker Report falls into this category. However, we take payment for signup links only, never for the content of any of our articles or reviews. For more information, see our Editorial Policy page.

Author: wpadmin

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