Luxury loot box sponsorships are tearing YouTube apart

Some of YouTube’s biggest channels are facing backlash from both viewers and other YouTube creators after promoting a form of loot box-style gambling with a company called Mystery Brand. Both Jake Paul and Brian “RiceGum” Le have run sponsored videos promoting Mystery Brand — a $100,000 offer that other YouTube creators said they’ve also received and turned down.

The sponsored videos show Paul and Le clicking on a variety of mystery boxes looking to win top prizes. Much like loot boxes in gaming, the format lets players spend anywhere from $12.99 to $100 on boxes and open them up to win an unidentified prize. Prizes differ from USB cords and fidget spinners to designer clothes, cars, and houses, according to the site.

In the videos, Paul and Le spend thousands of dollars on boxes, and winning everything from $4 fidget spinners and $60 Converse sneakers to AirPods, an iPhone XS, and sneakers worth $1,000. The thumbnails on the creators’ videos include expensive items like designer shoes, iPhones, and iPads. Le’s video is titled simply “How I got AirPods for $4.”

But three days after Le’s video went up, something changed. Within 24 hours, he and Paul were facing callout videos from Ethan Klein, Kavos and, perhaps most damaging, PewDiePie, who named the sponsorship as an “oopsie,” and called promoting the website “a bad idea in general,” especially considering both Le and Paul have young fans.

Le’s caption on his original video calling the website a scam.

Le responded with a short response video about his Mystery Brand sponsorship, telling fans he was sorry and asking for their forgiveness. He also ended the video with codes for Amazon gift cards as a way to further extend his apology. Le told viewers they should do additional research for themselves, but stood by his former videos winnings.

“I do feel bad,” Le said in the video. “I’m kind of defending myself, but I do know that I’m somewhat in the wrong.”

Le also added captions to the video, seen in the photo below, which warn viewers, “This is a scam!” However, there is no similar message in the annotations or the video description, and the warning would be invisible to any user without closed-captioning turned on.

The warning comes too late for some Mystery Brand buyers, who say they bought into the company’s promise and received inferior goods. Le’s video put forward designer shoes like Nike’s Air Max 97 Off-White Black ($835) as a possible prize, but a Mystery Brand buyer who nominally won a designer hoodie said they actually received “a fake Bape shirt.” According to the post, Mystery Brand “said that they also had ‘unbranded items’ with authentic items,” which neither Le or Paul ever spoke about.

A number of other Mystery Brand users have made similar complaints in public forums. Buyers report receiving fake tracking numbers after a purchase, or simply never receiving products for months after winning.

“I won a tracking device for my phone and when I got the email for the tracking number it turned out to be a number for a package delivered two years ago,” one Reddit user wrote. “The site is a scam and not worth using. Save your money.”

“My experience with Mystery Brand: I spent $350 on items and $38 on shipping,” another commenter wrote. “That was October 14, 2018. And that same day, I ordered my Supreme x Louis Vuitton Pocket Knife. One month and three weeks later, I have not received anything, and the status hasn’t changed to shipped. It is still in work since almost that day, so for me, this is a huge scam!”

Many of the most lavish prizes seem to have been fabricated by the company. One video promotes a $250 million mansion as a possible prize, but the house doesn’t appear to be owned by Mystery Brand. A New York Times real estate listing values the house at $188 million, and reports that it’s been on the market for just under 300 days. According to Zillow, the house is still for sale.

The company’s terms of service has raised more doubts stating that those who participate may sometimes not receive the products they’ve won.

“During using the services of the website You may encounter circumstances in which Your won items will not be received,” the terms of service reads.

The terms also say the company will try to rectify the situation. “In this case, the Web site will make every effort to resolve this situation and try as soon as possible to resolve Your problem. The maximum term of consideration of the defect/error is 45 working days.” The document also notes that Mystery Brand operates under Polish law.

In many of the cases, it’s hard to distinguish between bad customer service from malicious intent. But according to YouTube’s policies, as long as the promotions are clearly disclosed, Paul and Le are in the clear.

“YouTube believes that creators should be transparent with their audiences if their content includes paid promotion of any kind,” a YouTube spokesperson told The Verge before Le’s apology video was posted. “Our policies make it clear that YouTube creators are responsible for ensuring their content complies with local laws, regulations and YouTube Community Guidelines. If content is found to violate these policies, we take action to ensure the integrity of our platform, which can include removing content.”

YouTube’s policy allows for responsible gambling ads, with restrictions and protections for those watching, but the site doesn’t consider Mystery Brands or loot box-style games as gambling. Essentially, Paul’s and Le’s videos exist in a very specific gray area. YouTube’s policies do state that creators can not promote spam, deceptive practices, or scams, even through partnerships. If YouTube determines a company is taking advantage of users, its policy is to take down sponsored videos for violating the company’s community guidelines — but so far, it’s not clear whether Mystery Brand has broken those rules. But those policy nuances haven’t stopped other creators from calling out Paul and Le for intentionally misleading their followers.

The Verge reached out to representatives for both Paul and Le, as well as Mystery Brand itself — none responded to a request for comment.

A major faux pas

Antonio Chavez is a popular YouTube creator who operates the Memology 101 channel. He was one of the first creators to produce a video on Paul’s and Le’s controversies, and has a history of investigating potentially shady YouTube sponsorship deals. Chavez first made a name for himself investigating a series of BetterHelp sponsorship videos in 2018, which led to creators like Philip DeFranco ending his relationship with the company and opened a dialogue about transparency within the YouTube community.

Chavez, like so many of his fellow YouTube creators, considers Paul’s and Le’s decision to partner with Mystery Brands as a reckless and selfish move.

“They’re just desperate for money and views,” Chavez told The Verge. “The channels have been going down for a while now, as far as analytics go. Their channels are big channels still, but they’re used to this kind of money — maybe six figure sponsorships all the time — and when they see that going down, they’ll take any kind of sponsorship.”

Following Paul’s and Le’s videos, which have more than 3.5 million views combined, multiple YouTube creators have come out with their own stories involving Mystery Brand. Daniel “Keemstar” Keem, a popular YouTube creator and host of DramaAlert, tweeted that he was offered $100,000 for a similar sponsorship. While he came close to accepting it, he ultimately didn’t, but didn’t offer any reason as to why. Another YouTube creator and one brand manager told Kavos, a popular commentator, that they were offered $100,000 for the video. Whatever items the YouTube creator won would be express shipped to their house, and the video would be filmed after, according to Kavos.

Kavos suspects that Paul and Le’s drawings were rigged to be successful, giving viewers inflated expectations for how much they might win, although The Verge was unable to corroborate his suspicions.

“Mystery Brand not only knew their [account] details, [but] they added money to their account,” Kavos says in the video. “They were not an anonymous, usual user on the website. They were an influencer who was promoting their product and, with brands like this, if the influencer doesn’t win, then the marketing campaign flops. They are promoting winning big prizes for small money. It’s no coincidence that Jake Paul and RiceGum won ridiculous prizes.”

Commentators like Kavos and Chavez have called Mystery Brand an outright scam, with Kavos adding that it’s basically “career suicide” for Le. Both Kavos and Chavez have also called it bizarre that Paul and Le’s teams would allow them to promote such a questionable product. The moral responsibility is on their teams to ensure they’re not promoting possible scams to young audiences, Chavez told The Verge.

“They have to make sure that everything is transparent enough,” Chavez said. “That it’s not going to affect your fanbase if your fanbase decides to follow through with those sponsorships. They actually mentioned they have a manager, a team they can rely on. How come a small YouTubers like me have the time to research their sponsors, but these big personalities don’t?”

Chavez also told The Verge that while Paul hasn’t directly responded to his video, Paul had issued a copyright infringement claim. Chavez used footage from Paul’s original Mystery Brand video in his Memology 101 takedown, and it’s something that Chavez called a petty move from the popular YouTube creator.

There are even responses from people who watched Le’s video, and thought it might be worth a try. It only took one Google search to deter them from doing just that.

“I was considering trying to get stuff from MysteryBrand after seeing RiceGum’s video but I was skeptical of whether or not it was legit, and after seeing all these posts I probably won’t use MysteryBrand unless it works for someone I know in person,” one person wrote.

It’s the apparent disregard for their young audiences that seems to have angered many in the community. Ethan Klein of h3h3 Productions issued a nearly 15 minute video on the subject, calling out Paul and Le for exactly that.

“I don’t think I need to look much deeper into this to know it’s a very strange, overseas scam,” Klein said. “This is bananas.”

Not even the art is legit

It’s not just those within the YouTube realm who are flabbergasted over Paul’s and Le’s decision to promote a gambling site to kids. Alex Griendling, an artist who co-owns creative agency Lunar Saloon, discovered Mystery Brand after one of his followers alerted him to Ethan Klein’s video breaking down the situation. Griendling told The Verge his avatar designs were being used by Mystery Brand without his permission.

While Griendling is used to people ripping off his designs for their apps or marketing packages on websites, he wanted to try to get ahead of the situation on Twitter. Griendling works with companies like IGN and GameSpot, which is owned by CBS, and didn’t want any of his potential clients to think he would associate himself with a website that he calls a “European scam site.”

“It’s always scummy, but realizing that your work is being appropriated to get kids into real life gambling loot boxes … it’s really disconcerting,” Griendling said. “There’s an additional level of powerlessness that comes along with it. It doesn’t feel great.”

Griendling has no plans to contact Mystery Brand about lifting his artwork and using it on their site, but sees the experience as more evidence that the site is a scam. Alongside not contacting or offering to pay him for his art, Griendling pointed out to The Verge that it doesn’t make sense that a company would offer to reportedly pay $100,000 to YouTube creators for sponsored videos and offer to give away $188 million mansions, then lift artwork from online creators to avoid paying a nominal fee.

“It’s amazing that Youtube can defend it at all,” Griendling said. “It’s the same as, ‘All the evidence might point to Russian collusion but let’s give them the benefit of the doubt.’ Are you insane? I could reach out to them, but I don’t think it’s going to result in anything. I’m going to grin and bear it, and hope that something is done about it ultimately, and try to distance myself in the mean time.”

What’s more frustrating to Griendling is that neither Paul nor Le seem to need the $100,000 sponsorship. Paul was named the second wealthiest YouTube creator of 2018 by Forbes Magazine, and Le constantly boasts about his wealth on his personal channel. Choosing to accept a sponsorship with such a questionable company is something that Griendling can’t seem to wrap his head around.

“I feel like it’s just another symptom in these YouTubers blurring the line between entertainment and advertising,” Griendling said. “It’s weird. I get sponsorship deals with Beats by Dre headphones. Sure, I get it. But, ‘Oh, I love participating in this European scam gambling site’ … why? I would just not take money, and say no. I wish YouTubers would have the sensibility to do that.”

“When money is not an issue,” Griendling continued, “that frees you up to promote things that are beneficial, so to use that platform to promote this, I feel like that really reveals a really corrupt set of morals.”