“Morality came into play. It did. I felt shitty doing any type of gambling sponsorship,” he later said. “And I know people are like, Mizkif, but you do sponsors all fucking day. If you download Dungeons and Dragons, what’s the worst that happens? You lose $40 and a couple of hours of your life. Gambling is different.”
Online gambling is regulated by a combination of federal and state laws in the US. Gambling websites need a license to operate in individual states—it doesn’t matter whether they’re operating with hard USD or digital currency. Many crypto casinos, like Stake and Duelbits, are based offshore in countries like Curaçao, and do not have those licenses. Yet they are easy to access from the US through a VPN. (More reputable online gambling sites ask users for more data points to confirm their location.) “While these sites block the US, they do not prevent access from people within the US,” says Jeff Ifrah, an attorney who specializes in online gambling law. Ifrah says he recently has been fielding lots of questions from US-based Twitch streamers and their representatives. While legal experts say it can be tough to prosecute these websites, their US-based promoters may be open to scrutiny.
Taking sponsorships from and encouraging illegal gambling can land streamers in sticky legal territory, Ifrah says. He warns streamers against advertising these crypto gambling sites while streaming from the US. “My advice to them is that, basically, the underlying activity is illegal.” It still happens, though. “There’s a lot of money in it,” he says. “Streamers have told me, ‘Hey, I don’t want to just give this up. This is a big opportunity for me, because these sites pay a lot of money.’”
There may be big opportunities, but they can come with big risks. “A lot of the gambling promoted on Twitch is illegal or unregulated and poses definite risks for consumers, vulnerable adults, and adolescents or underage children,” says Keith Whyte, executive director of the National Council on Problem Gambling, an organization that promotes comprehensive policies to support healthy, legal gambling. Because these sites often aren’t vetted as much as sites that are legal in the US, experts question whether their odds are fair and what their backends look like, says Whyte. “It’s a fairly common tactic in the unregulated gambling industry to inflate win rates.”
Gambling experts interviewed by WIRED say that right now it’s on Twitch to act. “The health of their users is something to be concerned about,” says Whyte. “They have enormous incentive to police content that is either illegal, unregulated, or potentially harmful.”
Twitch’s terms of service prohibit illegal activity on its website and ask users to comply with the Federal Trade Commission’s guidelines on advertising. With that said, it does not specifically ban gambling streams. Crypto gambling is flourishing on Twitch, frankly, because it is allowed to. By contrast, livestreaming competitors YouTube and Facebook Gaming prohibit streaming online gambling sites that have not been previously reviewed. Twitch also has gambling-related categories, such as slots, which have no age limit to prevent younger viewers from watching. (Some stream titles say “18+.”)
Twitch told WIRED, “We strictly prohibit illegal content and activity on the service, and take action in all verified incidents of illegal gambling that are reported to us. Our Community Guidelines make clear that ‘[Streamers] must respect all applicable local, national, and international laws while using our services. Any content or activity featuring, encouraging, offering, or soliciting illegal activity is prohibited.’” The company adds that its goal is to foster “a safe, positive experience for all users of our service” and that it is “closely monitoring gambling content.”
Twitch has had to deal with gambling-related controversies on its platform before. Years ago, top streamers gambled with cosmetics from the first-person shooter Counter-Strike: Global Offensive. Skins gambling was an unregulated frontier that soon became massively popular—and filled with allegations of foul play. The first Twitch streamer to reach 1 million, and later 2 million, followers was Tom “Syndicate” Cassell. Cassell drew in huge audiences gambling and winning big on the site CSGOLotto.com, but he also reached a settlement with the FTC in late 2017 for failing to disclose his status as vice president of CSGOLotto.com while promoting it.