• 16 May 2022
  • Gambling News

Gamers drawn into crypto casinos by Twitch gsmbling

Three years ago, Chabot began regularly seeing Felix “xQc” Lengyel, a former professional Overwatch player, as he competed for an audience of up to 25,000 viewers in various video games on Amazon.com Inc.’s livestreaming site Twitch. Had it. In 2021, during some of its streams, Lengyel started playing something else—online blackjack.

Chabot, who lives in Quebec and manages a hospital, was astonished. “I thought it was very entertaining,” he said.

At one point, Chabot noticed that Lengyel had posted a promotional code for a site called Stake.com – touting itself as the “leading online crypto casino”. At Bets, and on such sites, users can exchange money for cryptocurrencies, which they can use to place bets on various games of chance, including slots, blackjack, and roulette. Chabot redeemed the offer and entered the slot scene on the steak. At first, he enjoyed making repeated bets for the equivalent of $1. Then things went downhill.

“I just started losing and losing,” Chabot recalled.

After a few months, Chabot says he exhausted about $40,000 of his lifetime savings. Then, he says, he took out two $20,000 bank loans and burned that money too. Eventually, Chabot declared bankruptcy.

While Chabot’s decision to place bets was his own, he said that watching Twitch streamers gamble on the site as a celebration “gave me a reason to go to stakes, as if I was a part of what they were doing, ‘ he told Bloomberg in an interview.

He’s not the only one who goes all in. These days, “slots” are the seventh most popular content category on Twitch, ahead of the video game Fortnite. Many streamers are paid handsomely for participating in the activity. One popular streamer said he makes “a lot” over $1 million per month as part of his sponsorship with Stake to Crypto gambling in front of a live audience on Twitch. In May, Lengyel said the promotional code he shared on Twitch brought in $119 million in stakes.


Stake, which says it operates under a gaming license in Curaçao, is one of the top companies pouring sponsorship money into the Twitch community. The location that Steak gives in Curaçao as its registered address appears to be a run-down shack on Google Earth. The company says most of its employees are in Europe.

Crypto gambling is illegal in the US, although it is allowed in other countries, according to Frank DiGiacomo, an attorney who leads the gaming law group at Duane Morris LLP in Philadelphia. Canada is welcoming crypto operators, potentially contributing to why some streamers moved there.

It is still possible to bet on stakes from the US using a virtual private network, which hides the user’s location and crypto currency, however.

A Stake spokesperson says it has implemented “stringent compliance procedures” that prevent people using VPNs from depositing funds in countries where it is not allowed. Stake says it “uses a number of measures to address risky gambling behavior” including free gambling-blocking software for its users. “The stake takes its regulatory obligations very seriously and complies with all applicable laws.”

Gambling may not be a feature on Twitch forever. A Twitch spokesperson says the company is “currently in the midst of a deep dive into the gambling behavior on Twitch.” Since Lengyel and others included links in the past year, the company has decided not to allow gambling companies to share links or referral codes, which the spokesperson says will “reduce scams and other pitfalls associated with questionable gaming sites.” to address”.

“We take any potential harm to our community very seriously,” the spokesperson says. “While gambling content represents a very small portion of the content streamed on Twitch, we monitor it closely to ensure that our approach minimizes potential harm to our global community.” Resources for anyone living with a gambling addiction are available in Twitch’s Safety Center, the company says.

After taking a year-long break, Lengyel, a Canadian who is one of the most popular Twitch celebrities with 11 million followers, is now once again gambling regularly on his Twitch streams. At the end of July, around 70,000 viewers watched him repeatedly click on a digital slot machine button. Part of the fun to watch is that the stakes are absurdly high. During a recent stream, Lengyel lost $164,000 in crypto within just 139 seconds. Lengyel did not respond to Bloomberg’s request for comment.

It’s not just about gamers getting in on the action. In May, rapper Drake, who is also Canadian, partnered with Steak to bring live gaming on Twitch under the Steak Drake username. Starting with a $9 million balance, Drake made singles roulette bets between $300,000 and $1 million, while 56,000 viewers watched. The terms of Drake’s partnership with Steak were not made public. A spokesperson for the rapper did not respond to a request for comment.

All celebrity endorsements and sponsored streams are working as intended, leading Twitch users to crypto casinos. Vaibhav Kumar, a 25-year-old native of India, started crypto gambling in 2020 after watching the girlfriend of his favorite League of Legends streamer make some bets on Twitch. Now, he logs onto Stakes four to five times a week, placing bets ranging from $20 to $200.

For a while, Kumar primarily watched streamers who were sponsored by Stakes, he says, finding that his losses were being balanced by lucrative promotional deals. On the contrary, nothing made up for his own loss.

“Once the initial excitement of seeing someone play with such a huge amount was over, it was mostly just weird and I got sick of watching it,” he said. “It also gave the audience a false sense of winning and losing.”

“Sites are using celebrities and platforms that are geared towards young people.”

For some young gamers, the on-ramp of crypto casinos may be seen for many years as another form of betting that has flourished among video game fans on Twitch and other sites – i.e. virtual goods from the popular shooter game counter. Gambling with- Strike: Global Offensive. As part of this vibrant, billion-dollar market, celebrity gamers were launching websites where users could play roulette by betting digital weapons from video games, some of which cost hundreds or even thousands of dollars. Children under 18 had no problem joining the action.

Jacob, who asked not to share his last name for fear of career repercussions, says he went to a site when he was 13 and won a $200 knife. He was too young to withdraw the money and immediately put it into gambling.

Eventually, the site he was using was turned into a crypto casino. When he was 16, Jacob saw a Twitch streamer promoting stakes and left his online gambling habit there. Now, the Czech resident says he logs onto Stakes almost every day, gambling in a series of $50 buy-ins. If he wins big, he buys computer parts or shoes. Most often, they say, they lose $1,000 to $1,500 per month.

Although crypto-gambling has been a massive presence on Twitch for over a year, it is now attracting more viewers than ever before – and more controversy.

Matthew “Mizkiff” Rinado, another top Twitch personality known through his entertaining World of Warcraft livestreams, says he’s offered $19 million a year to gamble live on Twitch in front of his huge audience. Has been. Although Rinado has gambled on Twitch in the past, he now believes doing so is morally questionable. Last year, Rinado noticed one of his fans, then 14 years old, was gambling on a site he promoted.

“I stopped because I felt really bad,” Rinado told Bloomberg.

Some top video-game streamers—including Lengyel, who describes himself as “addicted”—have shifted their gambling habit to the hours of the day when they are not performing in front of an audience. There are. In May, he admitted that he had lost $1.8 million in gambling the previous month.

“I go out of my way to tell you not to do this,” he said during a livestream. “I do it because I can afford it, and I enjoy it, and I think it’s content.”

Another top streamer, Tyler “Trainwrex” Nickname, said in January that he had lost $12.9 million in gambling, according to Dexerto, a video game news site. Nickname did not respond to a request for comment.

For years, offshore gambling has been a thorn in the side of US regulators. In June, 28 members of Congress wrote a strongly worded letter to the Justice Department asking it to take action against offshore sports betting sites operating without approval in the US. Alex Costello, vice president of government relations for the American Gaming Association, a trade group for casinos, says lawmakers are focusing on regulating and shutting down the biggest illegal betting sites and crypto gambling is yet to top the list. Not there. Offshore casinos usually have sophisticated methods to obscure ownership, and that goes doubly for the crypto space, which lawmakers are still struggling to understand, she said.

Costello said it is troubling that “sites are using celebrities and platforms that are geared towards young people” to attract customers. About 75% of Twitch users are between the ages of 16 and 34.

According to the National Center for Responsible Gaming, about 6% and 9% of youth struggle with gambling, compared to 1% of adults. In recent months, more than 2,300 people have signed a Change.org petition, in which Nvidia Corp. and PepsiCo Inc. Advertisers, including Twitch, have been asked to reconsider advertising on the platform in light of gambling streams. The companies did not respond to requests for comment.

Streamers like Rinado believe that it is the responsibility of Twitch to stop providing a platform to promote offshore crypto gambling sites. As long as Twitch allows it, he says, streamers are likely to accept hefty sums of money to promote sites like Stakes.

“Streamers are going to gamble 12, 14, 16, 22 or 38 hours a day because they are being paid to do so,” he said.

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