Slots streamers are searching for an alternative platform after Amazon-owned Twitch tightened its rules on gambling content, but the big question is: which site will fill the vacuum?
On 18 October, Twitch’s new guidelines came into effect, which prohibit the streaming of non-US licensed gambling websites, as well as gambling sites that don’t offer specific consumer protection measures.
The ban currently affects Stake.com, Rollbit.com, Duelbits.com and Roobet.com, many of which are licensed by the Caribbean island of Curacao. It was implemented in the wake of a recent scandal that saw British streamer ItsSliker admit to scamming other hosts out of thousands of dollars to fuel what he described as a gambling addiction.
Gambling content had long been big business for Twitch.
During the past year, the slots streaming category “became one of Twitch’s top 10 most watched categories per month,” explained Happyhour.io CEO and co-founder Robin Eirik Reed in a recent iGaming NEXT podcast, where he discussed Twitch’s ‘unsafe’ gambling ban with host and iGaming NEXT MD Pierre Lindh.
While slots streaming on Twitch has been dealt a blow, it has not disappeared: “Streamers have quickly acted and now reverted to websites licensed by the Malta Gaming Authority,” Reed said.
The Twitch ban has left a void for viewers seeking high stakes gambling with the potential for big wins — and big losses.
One platform in particular appears determined to fill that void: Streaming service DLive was quick to release a statement welcoming all slots streamers, regardless of their preferred operators and consumer protection protocols.
— DLive (@OfficialDLive) October 13, 2022
DLive is a US-based live streaming serviced that started in 2017 and was subsequently purchased by BitTorrent in 2019.
DLive has often ventured close to controversy, with critics suggesting it provides a platform for conspiracy theorists, neo-Nazis and other extremist groups, particularly on the far-right.
In August 2020, for example, eight of DLive’s top 10 earners were either far-right extremists or conspiracy theorists, while several of the platform’s leading personalities livestreamed their involvement in last year’s attack on the US Capitol building.
While DLive might have been able to attract some business overnight – including content creator and Stake streamer Classybeef – both Reed and Lindh believe that bigger changes will soon be afoot for casino streams.
“The big question is what will happen next, and whether the large, regulated companies can benefit from the ban,” said Reed. “It will be interesting to see whether the big streamers will now start streaming for them,” he added.
Moreover, Reed said, there are rumours that some influential streamers might join forces to launch their own platform.
Meanwhile, iGaming operators are looking to bring leading streaming into their own organisations.
Happyhour.io CEO Robin Reed: “The big question is what will happen next, and whether the large, regulated companies can benefit from the ban. It will be interesting to see whether the big streamers will now start streaming for them.”
“There is a massive appetite for this product,” Reed said, adding that bringing streamers in-house might actually turn out to be the next big trend in the industry.
“One of the reasons why I feel this product needs to be controlled by the gaming industry is that the gambling industry knows best how to deal with issues such as underage gambling and all of the problems of social harm that come with it,” Reed said.
“We have an internal control system, KYC checks, responsible gambling and fraud teams who are protecting the players, so by hosting the streams ourselves, we can also control that part of the experience,” he added.
💥 WE'RE LIVE!!! 💥
And we're about to give away our first $1000, as we already reached 2000 followers on Dlive! 😍
Join us & watch → https://t.co/PaW8RRwoyx pic.twitter.com/ugTjYWxB5Q
— CLASSYBEEF (@ClassyBeef) October 21, 2022
Lastly, Reed does not believe that Twitch will eventually adopt an outright gambling ban.
As long as a platform manages to ensure that responsible gambling policies are in place, he doesn’t see any reason why streamed casino content would no longer be permitted in a user-generated community.
“We are also watching movies where people go into a casino. I think it just needs to be governed well,” he concluded.
The gambling industry needs to overcome its obsession with bonus promotions and free bets.
Those are the thoughts of Steven Salz, video gamer turned CEO of TSX-listed operator Rivalry, which just reported record Q3 results.
“It’s simply not a very sustainable business model,” he said. “If you need to subsidise players to come to your platform, then your only competitive advantage is your balance sheet,” Salz told iGaming NEXT in an interview.
How it all started
Salz, who co-founded Rivalry in 2016 in his mid-20s, had been a passionate gamer during his teenage years.
However, he started a career in asset management at Canadian bank Scotiabank before taking on a position as an analyst at a boutique investment bank.
But when he saw the esports industry edging closer to monetisation, he wanted to be a part of it.
“In 2015, a lot of exchanges were created that allowed players to buy and sell skins, which created a lot of liquidity for these items,” recalled Salz.
“Moreover, a huge community was being built up that traded these items almost like stocks. I reached out to Loot Market, an in-game item marketplace for Dota 2 and CS:GO items, alongside my business partner Steve Isenberg because I wanted to invest in the company.”
This is how he met Rivalry co-founders Ryan White and Kevin Wimer, who back then were in charge of Loot Market.
“We quickly noticed that a lot of the liquidity and transaction volume was coming from skin betting websites, which were not licensed and therefore illegal.
“There were billions of dollars of betting handle in 2016 already, and we thought that this presents an opportunity to build a regulated betting product for players under the age of 30.
“From the start, we wanted to target Millennials and Gen Z consumers, all those who have grown up with video games like we did. So, our visual style and messaging is very gaming focused, while the main landing page is defaulted to esports betting.”
Today, Rivalry generates about 90% of handle and revenue through esports, primarily with people betting on events involving League of Legends, Counter-Strike and Dota 2. The remaining 10% comes from traditional sports betting.
In August, Rivalry added Rushlane, an online multiplayer game designed in-house and last month introduced Aviator, a third-party casino product to counter the seasonal slowdown of sports betting.
Rivalry CEO Steven Salz: “We don’t want to be another sportsbook targeting 35-year-old punters. We really want to build a product for the next generation.”
“I don’t know if this mix is going to change any time soon. If you had asked me a year ago, I would have probably said that this year esports would account for 70% and traditional sports betting for 30%, but there has been a continuous strength in esports for us,” Salz said.
“We don’t want to be another sportsbook targeting 35-year-old punters. We really want to build a product for the next generation.”
According to recent data, 82% of Rivalry’s active users are under the age of 30.
“They are at the beginning of their LTV cycle, in their early or mid-20s, while the typical sports bettor and casino player of most other operators is in their late 30s and 40s,” said Salz.
For the most part, Rivalry does not utilise traditional iGaming marketing channels such as affiliates and bonus promotion but focuses on content-led player acquisition via social channels and influencers.
Due to the firm’s esports focus, Rivalry has long been close to streaming platform Twitch and its content creators.
Discussing Twitch’s decision to ban crypto gambling live streams, Salz said that “it was the first time that something was being done about these nefarious actors”.
The ban, effective tomorrow (18 October), will clamp down on slots, roulette, and dice gambling sites that aren’t licensed in certain jurisdictions and are lacking player protections.
He added that there were always “companies in the industry who operated in ‘darker’ ways, but the hardest thing for them was to move money. “Crypto – and I am a crypto believer – has made it so much easier to run this kind of business,” said Salz.
“You can log in using a crypto wallet, deposit instantaneously and play slots in under 30 seconds with real money. No KYC, no questions asked,” he said.
“Shutting them out from the distribution, of which sponsoring Twitch streams is one of the more important avenues, is one of the last tools left,” Salz said, commenting on the struggle faced by regulators in clamping down on these sites.
Building a brand
Commenting on Rivalry’s own marketing initiatives, he said: “A lot of our ability to effectively acquire new customers and retain existing ones has to do with the brand equity we have created.
“This is a very sustainable way as we don’t need to focus on bonus offers. We pay very little in bonus promotion relative to our peers.”
Salz said he fundamentally believes that it is a “toxic situation” if a business needs to attract and retain customers with the help of bonuses and other incentives.
Looking to the future, Salz said that he believes that Rivalry’s sportsbook will continue to be heavily driven by esports, but the share of traditional sports betting could increase from 10% to 20% by the end of 2023.
The main reason for this is that the esports sector in both Australia and Ontario, two markets which Rivalry has entered in 2022, is not as developed as elsewhere and punters in these areas prefer traditional sports betting.
Does he have a message for other operators wanting to break into the under 30-market?
“Yes. I’d like them to think as long as possible that bonus promotion works,” he laughs.
Jokes aside, Salz added: “For the under 30s, esports betting is the first touchpoint with the betting sector,” so if the iGaming industry wants to future-proof itself, it “should consider esports as a top of funnel of that demographic, and not just an add-on”.