What The Twitch Crypto Betting Ban Really Means

Twitch bans gambling streams

Online sports betting – and to an even greater extent online casino gambling – is big business. But they are also disruptive.

In the US, for example, there are fewer than 30 states with legal online sports betting, even though it has been more than four years since PASPA was repealed.

Even fewer states – fewer than 10 – have legalized real money online casino gaming.

So the fact that US players can legally gamble with non-US regulated online sportsbooks and online casinos is a problem. At least it’s a problem for domestic operators.

This is because these sites compete with brands like DraftKings and FanDuel and BetMGM, among others. And unlike these operators, offshore operators have comparatively little (if any) overhead.

They also don’t have to share a cut of their winnings with the US government, giving them far greater latitude in the markets, odds and bonuses they can offer.

But as powerful and wealthy as domestic operators are (they’re involved in a half-billion dollar campaign to legalize mobile sports betting in California), they can’t seem to get states to actually ban their offshore competition.

This poses very complex issues, including concerns about WTO compliance, quaint concepts like “fair trade” and the small matter of utter unenforceability.

Therefore, for now – and for the foreseeable future – the offshore gambling industry is something that domestic operators will need to contend with by offering a compelling competing product.

How mean.

But there’s still a catch: Aside from the fact that legal offshore betting sites are unlikely to be banned, domestic operators are having a hell of a time pitting themselves against these sites in another very close comparison way.

The elephant in the room here is that sites like Bovada, BetOnline, and Xbet support cryptocurrencies in addition to fiat money.

Local operators won’t accept USD until 2022, and that puts them way behind the eight. (Will local sites ever compete with this? My sources say no. Check back later.)

Seriously, while legal online sports betting is expanding in the United States, the offshore product only seems to be picking up steam.

Many online sportsbooks are finding that geofenced local bookies have pretty lousy odds on hometown favorites (especially if they’re underdogs), that promotions are increasingly limited and – most importantly – that cryptocurrency betting is a pretty rewarding way to gamble .

The same goes for online casino players.

Therefore, without a full criminalization of offshore betting, it seems difficult to imagine a world where the US-based product is as good – let alone actually better – than the international product.

So on to the big story of the week. Yes, yes, we buried the lede. But the above context is important as it helps explain why what happened really happened.

So what really happened?

On Tuesday, Twitch – Amazon’s live-streaming platform tailored for “gamers” – banned unlicensed gambling feeds. Via Amazon:

An update on gambling on Twitch. pic.twitter.com/lckNTY9Edo

– Twitch (@Twitch) September 20, 2022

(Note the specific language above. We’ll get to that in a moment.)

According to Amazon, the ban currently only applies to casino gambling content and does not affect “sites focused on sports betting, fantasy sports and poker”.

That seems random, which means it’s likely temporary as well.

In other words, you can expect the ban to apply to live streaming sports betting, fantasy sports, and poker once the live streaming audience is disruptive enough for those pastimes.

Back to the language, Amazon says the company is updating its policy:

“Ban streaming of gambling sites These include slot machines, roulette or dice games which are not authorized in the United States or in other jurisdictions that provide adequate consumer protection.”

So maybe the snowball doesn’t have to roll down the hill in the first place. Maybe it’s already down.

Perhaps the effective ban on “sports betting” and “poker” is already in place as each of the major offshore operators offering sports betting also offer online casino games and online poker.

Everyone. Single. one.

Fantasy sports, though? There are no international venues that cater to the fantasy sports crowd. That’s thrown in as a bit of misdirection and nothing more. Read on and you’ll see why.

OK. Back to the main story.

Here’s what happened on the surface: A high-profile streamer named Abraham Mohammed (aka “Sliker”) is being blamed for pretty much everything. See, Sliker is a gambling addict and is said to have cheated his fans out of around $200,000 to feed the beast.

As a result of this scandal, which Sliker himself admitted on a Twitch show, several other popular Twitch streamers spontaneously and quite naturally started talking about a “Christmas week boycott” (because they’re so outraged they’ll protest a few months, see). Then it wasn’t a day or two before Amazon dropped the ban hammer.

Maybe that’s true.

But maybe it isn’t. Maybe this sliker loser is just a scapegoat.

Perhaps the real game here is that the “Christmas boycott” is a cover to let a tech goliath do what Congress can’t: start stamping out crypto gambling.

But wait a minute. Why are we emphasizing crypto gambling when Amazon’s statement didn’t address crypto at all?

That’s the sneaky thing.

Nowadays, the only real reason these sites exist is because they accept cryptocurrency deposits and provide cryptocurrency withdrawals. The onerous UIGEA law made sure of that.

Without crypto support, such sites would be much smaller. Without crypto support, they would be almost no competition for the domestic operators.

Crypto, like offshore betting, operates in an “untouchable” space, at least in terms of legislative opposition. Mechanisms to ban offshore online betting are as legally flimsy as mechanisms to ban cryptocurrency.

Both challenge the status quo, and taken together they are even more of an affront to it.

What the law can’t do, the tech barons can. Or they can at least try.

And they definitely try. Take this article from the Washington Post with the headline:

“Twitch is cracking down on gambling, but streamers aren’t sure it’s enough”

Honestly, why do these “streamers” even care?

Think about this for a minute, and then think about this:

Amazon owns the Washington Post.

Like I said, sneaky.

Here, the move to ban “unregulated gambling” seems less in the interests of “consumer protection” (Sliker could have fooled its audience by becoming addicted to regulated online casino games as easily as unregulated ones) and more in the interests of it pushing back against the one thing offshore betting sites offer that domestic venues don’t: crypto support.

Amazon is cool with showcasing online gambling as long as it’s positioned so they can get a cut. Sponsors and ads, baby. That’s all.

That’s all.

happy friday

Dave Gallo

Dave Gallo is a pioneering sports analytics expert, renowned for his revolutionary work in AI-driven sports simulations, projections, and advanced statistical analysis. With a profound passion for sports and technology, he crafts cutting-edge computer models that accurately predict outcomes. Dave's game-changing insights have reshaped strategy, player evaluation, and decision-making across various sports. His dynamic presentations make complex analytics accessible and inspiring, ensuring his legacy as a visionary in sports analytics. Check out Dave's Pick Record.

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