Chabot started watching Felix “xQc,” who was a professional Overwatch player, as he competed in various video games on Amazon.com Inc.’s Twitch streaming site with up to 25,000 people about around three years ago. In 2021, during some of his streams, Lengyel started playing online blackjack.
Chabot, who lives in Quebec and is a bookkeeper for the hospital, was enthralled. He stated, “I found it quite enjoyable.”
Chabot could see the promotional code of Lengyel’s website known as Stake.com, which claims to be the most popular cryptocurrency casino on the internet. Users can use Stake and similar sites to exchange money for cryptocurrencies. Then, they can bet on different games, such as roulette, blackjack, and slot machines. Chabot accepted the offer and dove into the slot scene on Stake. At first, he enjoyed making bets repeatedly at $1. Things started to go downhill.
“I just started losing and losing,” Chabot recalled.
After a few months, Chabot claims he spent his savings from the life of around $40,000. Then, he says, he took out two $20,000 bank loans and burned through the money too. Eventually, Chabot declared bankruptcy.
Although Chabot’s choice to continue betting was his. However, he said that watching Twitch streamers festively gambling on the website “gave me a reason to join Stake and feel like I was a part of the activities they were engaging in,” he told Bloomberg in an interview.
It’s not just him to go all in. Nowadays, “slots” is the seventh most-watched genre of content on Twitch in the same category as the video game Fortnite. A lot of streamers earn very handsomely for participating in this game. One streamer said he makes “much more than” $1 million monthly from his sponsorship with Stake. He uses the opportunity to gamble on cryptocurrencies before live viewers on Twitch.
Lengyel claimed he could make $119 million in stake bets by May 2022. Lengyel later stated on live streams that the $119 million figure is the sum he wagered on the website. Bloomberg did not confirm the figure in conjunction with Stake.
Stake says it operates within Curacao under a gaming license. It is among the most prominent companies contributing sponsorship dollars to the Twitch community. Stake’s Curacao registered address is believed to be a decrepit Google Earth shack. According to the company, most of its employees are based in Europe.
According to Frank DiGiacomo (an attorney who heads the gaming law group at Duane Morris LLP in Philadelphia), crypto gambling is illegal in the US. However, it is legal in many other countries. Canada has welcomed crypto-related operators, which could be why certain streamers have moved to Canada.
You can still place stake bets from the US through the virtual private network. It hides your location as well as the cryptocurrency.
A Stake spokesperson has said that the company has implemented “stringent compliance processes” that prevent people using VPNs from depositing money in countries where it’s not allowed. Stake adds that it “uses various measures to address at-risk gambling behaviors,” including free gambling-blocking software for its users. “Stake is a firm believer in its regulatory obligations seriously and abides by all laws that apply to it.”
Gaming may not be a feature on Twitch for the foreseeable future. Twitch spokesperson said that the company was “in the midst” of an investigation into the gambling habits on Twitch. The spokesperson explained that the move was made to “address scams and other harms associated with gambling sites that are not trustworthy.”
“We consider any harm that could occur to our community important,” the spokesperson says. “While we recognize that gambling content makes up just a small portion of Twitch content, we carefully examine it to ensure that our method minimizes any potential harm to the community,” Twitch states that resources for people suffering from gambling addiction are available in the Twitch Safety Center.
Lengyel returns after a break of a year. He is a Canadian Twitch star with more than 11 million fans. Some 70,000 people watched Lengyel hit the virtual slot machine button repeatedly throughout July. Part of the fun of watching the stream is that the stakes tend to be absurdly high. Lengyel lost $164,000 in cryptocurrency in one recent broadcast stream in just 140 seconds. Lengyel did not respond to Bloomberg’s request for comments.
It’s not just gamers getting in on the action. In May, rapper Drake, also Canadian, allied with Stake to bet live on Twitch under the username StakeDrake. Drake started with $9 million and then placed single roulette bets worth up to $1,000,000, with $300,000. Viewers watched. Drake’s terms of a deal with Stake were kept private. Spokespeople for the rapper did not respond to a request for comment.
All celebrity endorsements and sponsored streams work exactly as intended, leading Twitch users to crypto casinos. Vaibhav Kumar, a 25-year-old native of India, began crypto gambling in 2020 after seeing his girlfriend, a favorite League of Legends streamer making bets live on Twitch. Then, he joins Stake four to five times weekly, placing bets from $20 to $200.
Kumar watched for a while streamers that were sponsored by Stake. After that, he stated that it struck him that lucrative promotional deals were offsetting their losses. The losses he suffered, however, were not compensated with anything.
He stated, “once the initial thrill of watching someone else play with huge amounts of money ended, it was largely unsettling. It was a bit sickening to watch it.” “It also gave viewers an illusion of losing and winning.”
Sites use celebrities and platforms that are geared toward younger users.
Some young gamers believe that the road to cryptocurrency casinos is due to an alternative type of gambling that was well-liked by Twitch players and others. This was due to the use of virtual goods in Counter-Strike: Global Offensive. Popular gamers launched websites where users could play roulette from Counter-Strike Global Offensive with virtual weapons. The virtual weapons were valued at hundreds of thousands of dollars. Kids younger than 18 were fine joining in the fun.
Jakub, who has asked not to disclose his last name out of fear of career repercussions, says he won $200 on a knife on one of these websites when he was 13. He was not old enough for withdrawal and could gamble away the winnings.
Eventually, the site he was using morphed into a crypto-casino. At 16, Jakub discovered a Twitch streamer promoting Stake and moved his online gambling habits there. Now, the resident of the Czech Republic says he logs on to Stake nearly every day and plays in a series of $50 buy-ins. Suppose he wins the computer part or shoes. He estimates he will lose between $1,500 and $1,000 monthly.
While crypto-gambling was a prominent presence on Twitch over the past year, it’s now attracting more viewers and causing more controversy than ever.
Matthew “Mizkif” Rinaudo, another top Twitch character famous for his entertaining World of Warcraft live streams, has claimed he’s received $19 million per year in an offer to play live on Twitch before his enormous audience. Rinaudo used to bet on Twitch but now believes it’s morally wrong. In the past, Rinaudo saw one of his fans, who was fourteen at the time, bet on a website that he’d advocated for.
“I stopped because I felt awful,” Rinaudo told Bloomberg.
A few top streamers for video games, including Lengyel, who has said he is “addicted”-have moved their gambling habit to the hours of the day when they’re not performing in front of an audience. In May, he admitted that he had lost $1.8 million in the previous month playing.
“I do not go out of the way to inform that you should not do it,” he said during one live stream. “I do it because I can afford it and enjoy it. I also think it’s content.”
Tyler “Trainwrecks,” a top streamer, claimed in January that he had lost $ 12.9 million betting on gambling, according to Dexerto. Dexerto is a video game news website. Niknam has yet to respond to a request for comment.
Gambling from overseas has been a problem for US regulators for years. Twenty-eight members of Congress wrote a stern letter in June to the Department of Justice requesting that it take action against illegal offshore gambling websites operating in the US without authorization. Alex Costello, vice president of government relations at the American Gaming Association, a casino trade association, says lawmakers are focused on regulating and shutting down the largest illegal gambling websites. Crypto-based gambling isn’t yet ranked at the top of the list. A casino offshore often uses sophisticated methods to conceal ownership. This is doubly relevant to the crypto-gaming industry that lawmakers don’t understand gamdom.
Costello stated that it was troubling that such sites used stars and platforms targeted at younger users to draw customers. Around 75% of Twitch users are between 16 and 34 years old.
According to the National Center for Responsible Gaming, 6% to 9% of youth gamblers struggle with gambling. This is compared to just 1% for adults. In recent months more than 2300 people have signed the Change.org petition soliciting Twitch advertisers such as Nvidia Corp. and PepsiCo Inc. to reconsider advertising on the platform in light of the streams of gambling. The companies have not responded to requests for comment.
Streamers like Rinaudo think Twitch should stop providing platforms to promote offshore crypto-gambling sites. So long as Twitch permits it, he claims, streamers will continue accepting huge sums of cash for promoting areas such as Stake.