Twitch's Gambling Problem Rears its Ugly Head, Again

On Sunday, one of Twitch’s most watched streamers put it bluntly: Twitch makes the rules and we all just live by them.

In a rant on his stream, Zack “Asmongold” followed up on the ongoing topic of streamed gambling on the platform and its second most-watched streamer, Félix “xQc” Lengyel. After he quit gambling on streaming in June 2021, xQc returned to it this month—once again taking an advertising deal from Stake, an offshore gambling company that uses cryptocurrency wagering to avoid regulation. 

It sparked outrage from his peers, such as former Twitch top earner Ludwig Ahgren, who proposed Twitch ban gambling content from the platform altogether. Asmongold didn’t advocate either way, but agreed that the ball is in Twitch’s court. 

Once again, Twitch finds itself in a tug-of-war over what should and should not be allowed on its platform. Except this time it’s not sexually suggestive content or top streamers illegally rebroadcasting popular TV shows, it’s gambling—a problem that Twitch has had six years to deal with and yet has done virtually nothing about. 

Twitch often plays by its own rules and frequently makes decisions with little transparency to the public. After it banned James “Phantoml0rd” Varga from the platform in 2016 for gambling on stream, Phantoml0rd filed suit against the Amazon-owned company in February 2018. 

Phantoml0rd claimed he didn’t know the platform’s then “30-minute rule,” which barred streamers from showing non-gaming content for more than half an hour. In April 2021, a California judge sided with Phantoml0rd, awarding him more than $20,000 in damages for the company violating his termination clause. In an opinion issued in September, the same judge said he hoped Twitch wouldn’t be so “ham-fisted” in future bans. 

The platform has been wholly ineffective at policing gambling content. In fact, even after reporters and Internet sleuths exposed Phantoml0rd and other influencers, some who used Twitch for rigging bets on skins gambling websites they also partly owned, the platform did nothing. It actually launched a “Slots” category in late 2018 after changing its rules on what could be broadcast on the platform—allowing for more content outside of gaming. That has enabled more people to gamble openly on Twitch.

The platform enacted only one restriction since the 2016 skins gambling dustup, instituting a rule in August 2021 that prevented streamers from linking directly to gambling websites or providing referral codes for signups. That guideline is basically toothless, as it still allows for streamers to take the advertising deals for the platforms, show their logos on stream and link to the sites on other platforms, such as Twitter. 

That has earned streamers like Tyler “Trainwrecks” Faraz Niknam and Adin Ross millions per month. (Ross leaked his Twitter direct messages in March, which showed Stake paid him 335 Ethereum, then roughly $1 million, per week in an ad deal.)

Twitch shouldn’t be expected to regulate behavior off-platform—although it has taken such action before, including banning people for acts of violence or harm, or other illegal activity. But it is the innovator in the livestreaming space, a behemoth with a vice grip on the market share. It rarely acts like the frontrunner, though.

“So I have a new rule, a new guideline that I think would solve gambling online and gambling on Twitch: No sponsored gambling streams,” Ahgren said in a May 18 video. 

“There's two major problems with it. One you have people who are getting a shit, shit, shit, shit, shit ton of money, millions and millions of dollars. So they are gambling way more recklessly. The second problem are streamers who use fake money to gamble.” 

Twitch, though, isn’t incentivized to address the problem. In the past week, “Slots” ranked as the eighth-most watched category on Twitch, racking in 9.64 million hours, according to TwitchTracker. By leaving it alone, Twitch continues to generate significant advertising for itself. 

The platform won’t face any consequences for letting it slide, other than certain streamers speaking out against it—but what’s new there? From a public image perspective, it’s clear, though: Twitch is ineffective at moderation and in this case, it’s going to continue to be, often to the detriment of its platform.