After ongoing calls to action, Twitch unveiled a this week. Specifically, referral links are no longer allowed on the platform.

As dotesports.com reported:

“In a Creator Update that was shared with users today, Twitch announced that it will prohibit links and referral codes to gambling websites. They claim this action will prevent harm and scams.”

Editor update: Twitch later banned gambling streams.

The Twitch gambling policy shift, which goes into effect on August 17, comes on the heels of YouTuber Max Maher posting a , “Exposing Crypto Gambling; The Billion Dollar Industry Preying On Kids.” Maher isn’t the first person to speak out on the topic, but his video neatly summarizes the situation.

In the video, Maher details how Twitch influencers gamble online with house money and use affiliate links to drive customers to online betting sites, many of which are illegal or reside in legal gray areas.

Full disclosure, Betting USA is an affiliate for legal online gambling sites in the US.

According to the description under the YouTube video:

An epidemic has arisen where popular twitch streamers are being paid massive sums of money to play online crypto gambling games.

The issue isn’t the sponsorship in itself. The issues arise in the unclear and unregulated win rates, the conflict of interest built into commission structure, and the primary audience.

This raises the question, does the new Twitch betting policy go far enough, and will it curtail what appears to be a very mutually beneficial relationship for streamers and offshore online gambling sites?

Are Twitch Influencers Profiting Off Of Illicit Gambling?

The YouTube video cites some absurdly high numbers these Twitch influencers are receiving – it’s unclear if these are straight payments, revenue-sharing payments, or a combination of both.

Even if the payments cited are exaggerated or represent only the streamers’ best months of revenue sharing, the numbers ($35,000 monthly payments and streamers making upwards of one million dollars per month) are eye-popping.

That makes it unlikely that the Twitch response will have teeth. I can envision streamers steering their audience towards a personal website for more information rather than putting the promotional link directly on their Twitch channel. It’s an extra step in the process, but the new policy doesn’t mark the end of these arrangements.

The new policy helps absolve Twitch (more on this later) and places a buffer between the online gambling site and the audience, but it’s unlikely to curb the amount of gambling content on the platform.

If offshore online gambling has proven anything over the years, it’s extremely good at adapting.

And that helps explain where the crypto part comes in. Cryptocurrencies allow offshore sites and patrons process deposits and withdrawals outside the eyes of financial regulators. Additionally, there’s no minimum age to buy or sell cryptocurrencies, although most major exchanges require users to be 18. Of course, a quick Google search for “how to buy bitcoin if you’re under 18” returns plenty of results.

Reasons Why Twitch Influencers Promoting Gambling Sites Is Problematic

There is a strong possibility that a significant chunk of the gambling is coming from people gambling from states with and without legal gambling alternatives, and more worrisome, underage gamblers.

As Brianne Doura-Schawohl, VP US Policy and Strategic Development at EPIC Risk Management, explained, Twitch’s underage audience presents a genuine responsible gambling problem.

“Twitch is highly influential and popular with children,” Doura-Schawohl told Betting USA. “Research clearly indicates that children exposed to gambling are more predisposed to struggling and/or developing a gambling addiction later in their life. No amount of disclaimers will negate the influence and impact these streamers are having on their young and impressionable, and frankly vulnerable viewers.”

Doura-Schawohl went on to add:

“The streamers themselves are young (likely not even of legal gambling age) and thus are not only promoting risky and potentially dangerous behaviors to other children, but they are also at risk for developing issues with gambling.”

Lack Of Transparency For Influencers Who Promote Online Gambling On Twitch

Transparency. As Maher notes, the influencers aren’t exactly forthcoming about their relationship with these online gambling sites.  Nor are they open regarding the affiliate arrangement or how they’re incentivized to steer customers towards games with higher house odds.

“The lack of transparency is a severe problem for gambling sites on Twitch,” Keith Whyte, executive director of the , told ycgts.shop. “It can lead to abusive and deceptive practices, particularly for underage viewers.”

“There’s also the lack of transparency about the relationship between the affiliate and the sponsor,” Whyte said. “And there’s the way gambling itself is portrayed, with a focus on the wins and not the losses.”

Whyte’s last point is more concerning if the video’s accusations that the streamers are using house money are true. When you’re gambling with house money, you’ve already won. It removes the negative moments of gambling, leaving susceptible viewers believing that gamblers are either relatively neutral to losses or flying high from wins. That can skew an observers’ attitude toward gambling.

Twitch Influencers Are Promoting Illegal Offshore Betting Sites

The unregulated nature of the online gambling industry, particularly when it comes to crypto gambling, can breed all sorts of issues.

As Whyte noted, the way game outcomes are determined is unclear without the robust regulatory oversight found in most legal markets.

“These games may or may not have true RNG,” Whyte noted. “They may use skewed outcomes to maximize wins for this particular player.”

“This isn’t even taking into account my many other concerns around the legality of betting within certain states, KYC, self-exclusion, or the utilizing of someone else’s money to gamble,” Doura-Schawohl said. “So their actions are likely riskier and creating truly horrible misgivings and developing unhealthy patterns with their gambling; likely the anthesis of how to do it responsibly.”

Does Twitch Need to Get Involved?

One of the overarching issues with offshore online gambling is accountability. These companies set up shop in countries where regulatory oversight is minimal, are often outside the reach of US law enforcement and lack robust consumer protections.

But in this specific scenario, there is something that can be done, as Twitch just proved.

According to Whyte:

“There should be some concern and there may be some liability–not just for the streamers, the affiliates, and the casinos, but for Twitch itself. In some ways, Twitch is facilitating illegal and exploitative gambling. They need to do a better job of age-gating gambling content and policing gambling content.

“The streamers and affiliates also need to clean up their act, and whatever country or state they’re in, gambling regulators should take a look at what is happening and crackdown as necessary.”

Twitch’s decision to restrict direct links and referral codes should be applauded, but as Whyte notes, the overarching question is, does this content belong on a loosely age-gated site at all?

And as Doura-Schawohl bluntly stated, “At the end of the day, I am truly saddened and worried about this.  Gambling and children are two things that are never supposed to mix.  Whether you label this as exploitive, predatory, grooming, I think all apply, and we need to be considering the health and well-being of the streamers and their viewers. 

The Regulated Gambling Industry Should Take Notice

A final thought on this topic is the implications for the regulated industry.

Whyte offered three reasons the regulated industry should take notice and action.

“First, this has a reputational risk for the gambling industry. We know regulators, legislators, and media may not differentiate between regulated and unregulated gambling. Every time it’s harder to draw that line, the industry invites controversy.

“Second, there is competitive interest. If this market is as big as it appears to be, the legal gambling industry has to be suffering some economic loss.

“Lastly, as alternative currencies become more popular and more accepted, I think there’s a significant risk of colliding with the illegal crypto gambling market. If the industry wants to start taking cryptocurrencies and it gets enmeshed with a massive illegal, unregulated market that thrives on crypto, that may push back legal efforts for years.“