Twitch streamers rake in millions with a shady crypto gambling boom

Tyler Niknam was getting out of Texas. Niknam, 30, is a top streamer on Twitch, where he’s better known as Trainwrecks to his 1.5 million followers. For hours on end, Niknam was hitting the slots on Stake.com, an online cryptocurrency casino and his most prominent Twitch sponsor, to live audiences of 25,000. He’d been winning big, sometimes as much as $400,000 in crypto in one fell swoop, and he never seemed to go broke. The problem? It wasn’t allowed.

If you visit Stake on a US-based browser, a message will quickly pop up on the site: “Due to our gaming license, we cannot accept players from the United States.” Though Stake doesn’t possess a gambling license in any state, Nikam and other US gamblers easily circumvent this by using VPNs. Promoting gambling sites that cannot operate in the US and making money by referring US residents to them may constitute promoting illegal gambling, legal experts told WIRED.

“Canada needs to happen asap,” Niknam wrote in a private Discord DM to Felix “xQc” Lengyel, 25, Twitch’s number two streamer. Lengyel briefly streamed slots but stopped in June. “You cannot show you’re on Stake at all.” A few days later, Niknam arrived in Canada, where he settled into a routine—gambling in a mostly empty apartment, sometimes more than a dozen hours a day. (Niknam and Lengyel did not respond to WIRED’s requests for comment.)

Twitch is in the middle of a gambling boom, fueled by the rise of so-called “crypto casinos”—websites where gamblers can purchase cryptocurrencies like Bitcoin and Ethereum for use in digital games of chance like slots, blackjack, and baccarat. And sites like Stake and Roobet are paying popular streamers to play the casino games on their channels, sometimes offering tens of thousands of dollars an hour, according to streamers and experts interviewed by WIRED. One gambling website, Duelbits, apparently offered top gambling streamer Adin Ross between $1.4 million and $1.6 million a month to stream slots on Twitch, according to a Discord DM between himself and Duelbits. (Ross, who was recently suspended from Twitch for using his phone while driving, did not respond to WIRED’s requests for comment. Neither did Stake, Roobet, or Duelbits.)

A WIRED review found that 64 of the top 1,000 most-trafficked Twitch streamers have streamed crypto slots or advertised sponsorship deals from crypto gambling websites, although the trend gained real traction in April and May of 2021. Some streams attract more than 100,000 live viewers. Many of these streamers are members of Twitch’s Partner Program, which gives top creators access to additional support and features like increased revenue sharing. It’s Twitch’s highest tier of streamers, and the company says it looks for people “who can act as role models to the community”—a community where 21 percent of users are between 13 and 17 years old.

One thing it might not be good to take these role models’ advice on? The perils of losing money by gambling. Some streamers may be playing with house money. Keeping up the appearance of painless fun, crypto casinos sponsoring these streamers refresh their digital wallets with money, according to videos, leaked chats, and interviews with individuals knowledgeable about crypto gambling on Twitch.

“It wasn’t my money,” Matthew “Mizkif” Rinaudo said on his Twitch channel in June. Rinaudo, 26, says he was getting offers to do gambling streams for $35,000 an hour—double the price tag of his typical sponsorships—for 10 hour-long streams over the course of a month. (One individual who works with multiple Twitch streamers says that tens of thousands of dollars per hour is normal for these streams.) He had streamed gambling earlier this year, just five times in April, and he says sponsors were fleshing out his crypto casino account, once with $5,000. Plus, he’d advertise affiliate links with attractive discounts. Despite the lucrative business opportunity, Rinaudo decided to stop working with online crypto casinos in June. (Rinaudo did not respond to WIRED’s request for comment.)

“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. 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. So called “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.

Streamer Moe “m0E” Assad, who was sponsored by the skin-gambling site CSGO Diamonds, played with house money without disclosing it to viewers. CSGO Diamonds also later admitted that it told Assad the outcome of games in advance so he could fix the results. Gaming celebrity Richard “FaZe Banks” Bengston, co-owner of esports team FaZe Clan, recently said he made $200,000 a day running his own skin-gambling site, which was incorporated on the Caribbean island of Antigua. Counter-Strike: Global Offensive publisher Valve cracked down on skin-gambling sites in 2016, sending cease-and-desist notices to 20 websites.

Prominent figures from the skins-gambling scene are now getting involved in crypto casinos. Assad has been gambling on Twitch since last year; now that gambling has blown up on Twitch, he is making bank with his Roobet sponsorship between games of the first-person shooter Valorant. Bengston, 29, is also sponsored by Roobet. A native on YouTube, Bengston made his Twitch debut early last month alongside crypto gambling streamer Adin Ross. He played slots on Roobet, and he spoke highly of his sponsor: “They treat us so well, fly us out to Mexico for these things. Full compliance, by the fucking books baby.” (Speaking on Bengston’s behalf, FaZe Clan declined to comment.)

On his stream from Cabo San Lucas, Mexico, Bengston’s account starts with $15,000 in Bitcoin. He’s playing “Mines” (think Minesweeper, but with cryptocurrency stakes). 40,000 people are watching. His first bet is $2,000. He blows through the $15,000 in 40 seconds. “I need to ask them for more bread,” says Bengston. “We’re gonna pretend that just didn’t happen.” In his next round, $7,000 becomes $0 immediately. Dismissing Mines, Bengston switches to Slots. There’s $15,000 in his account. The Roobet window is not onscreen between when he loses all his money and money enters the account. At the end of the stream, he is up $203,000. He gives thousands in Roobet funds to his viewers.

While still in Mexico, Bengston got a Roobet tattoo live on Twitch. “Use code ‘fam,’ baby. I don’t fucking play games.”

Updated 7-14-2021, 1:55 pm EDT: This story was updated to clarify that neither Felix Lengyel nor Matthew Rinaudo responded to WIRED’s requests for comment before publication.

This story first appeared on wired.com.