Are Streaming Services Exploiting Viewers with Gambling Promotion and other Bad Practices? We Investigate.

In July of this year, a series of leaked Discord DMs revealed that the online gambling website Duelbits had apparently offered Twitch streamer Adin Ross between $1.4 million and $1.6 million a month to stream the site’s slots gameplay on his channel. This leak, among others, showcases the recent rise of “crypto-casinos,” websites that allow users to purchase cryptocurrencies such as Bitcoin and Ethereum for use in virtual games of chance—as well as the sites’ use of popular streamers on platforms like Twitch to promote online gambling. These promotion practices can be predatory and unfair, targeting vulnerable adults and underaged children in the US by streaming gameplay from illegal or unregistered gambling sites.

We are interested in hearing from Twitch and other streaming website users about the following issues plaguing streaming platforms:

Promotion of Illegal or Unregistered Crypto Gambling Sites

Online gambling is a heavily regulated industry in the US under federal and state laws. Individual states require that gambling websites obtain licenses to operate within their borders, regardless of whether the site uses US Dollars or digital cryptocurrencies. Many crypto gambling sites, such as Stake and Duelbits, are based in offshore countries like Curaçao and Ukraine, and operate without a US gambling license. While these sites block US based web-browsers, they are nevertheless easy to access from within the US using a VPN network, and many do not ask users for additional details to confirm their location.

A recent investigation notes that 64 of the top 1,000 most-trafficked Twitch streamers, some with more than 100,000 viewers during a given live streaming session, have promoted crypto-gambling sites by streaming online gameplay or advertising sponsorship deals from such sites on their channels. Twitch has a userbase of over 40 million in the United States, with over 20 percent of its users between the ages of 13 and 17.

There are a number of potential legally actionable concerns with such promotion practices, including the promotion of illegal gambling and unfairness.

For example, the US Department of Justice (DOJ) and the Federal Trade Commission (FTC) have prosecuted promoters of illegal gambling in online sports betting websites, and many states have enacted similar laws against such promotional activities.

Scrutiny of the promotion of crypto-betting sites, however, should not be limited to concerns about illegal gambling. The FTC banned such promotional activities directed at minors as an unfair trade practice many years ago, and the US Supreme Court upheld that agency’s authority to regulate such activities.  Many states have also enacted laws against such deceptive trade practices, which are regularly enforced by private citizens in the courts.

Although Twitch has since banned streamers from sharing referral codes or links to gambling website, many commentators assert that this ban is simply not enough to stop the predatory practices affecting vulnerable users of the streaming platforms. Streamers such as Pokimane, Asmongold, SomeOrdinaryGamers, and Cr1TiKaL have called on Twitch to ban gambling streams altogether, noting that the peddling of unregulated gambling sites to underaged users will create dangerous addictions that could last a lifetime.

Unfair and Deceptive Use of Social Media Influencers by Companies

To ensure that promotional advertising is truthful, the FTC requires companies utilizing influencer marketing to follow guidelines.  Companies and influencers must include necessary disclosures in marketing materials for products or brand-related services.  A simple “#ad” at the top of a post or caption will suffice to establish the connection between a brand and an influencer, unless the influencer is being paid, which requires additional disclosures.  The FTC has repeatedly warned against companies’ failure to disclose connections with brands or services endorsed in Youtube or other streaming posts, noting that such disclosures are necessary for consumers to make informed purchasing decisions.

We are interested in looking into the issues above. If you reside in the United States and have observed any of these practices recently, or know of others not mentioned here, we would like to hear from you. The streaming industry is a multi-billion-dollar giant that is capable of deceiving and exploiting its userbase, just like any other online service.