Finding opportunities in the Twitch casino ban

| By Daniel O'Boyle | Reading Time: 4 minutes
The Twitch crackdown on online casino streams had many losers, but out of events like this there will also be winners. Daniel O’Boyle speaks to LiveSpins CEO Chris Scicluna and key investor Robin Reed about how their gambling-specific streaming platform has performed following the news.

As the gambling industry has learned again and again, out of every set of new rules there are those who benefit.

So when streaming giant Twitch announced its latest crackdown on gambling streamers, it might have appeared to be bad news for the industry. But there were many who saw the move as an opportunity.

The most obvious beneficiaries were rival streaming services, focused specifically on gambling. 

One of those is LiveSpins, which offers a built-in streaming client on operator websites. Players can watch their favourite streamers play, but – unlike on a product like Twitch which is not designed for gambling – can also bet along with them.

Chris Scicluna, chief executive of Livespins, said the business owed something to Twitch in its original concept.

“We are a live entertainment product,” he said. “We looked at Twitch and we saw streaming taking a lot of popularity. Just in 2021 there were 280 million hours of slots content consumed.

“There is a very strong community, but the followers cannot join in on the fun. So we saw a market gap. You can join in on the fun and watch them. You can chat, you can watch them but also you can bet.
“So when the streamer wins, everyone is winning.”

New opportunities

Unsurprisingly, LiveSpins already seems set to experience some new business opportunities because of the Twitch ban.

Robin Reed, chief executive of gaming VC fund Happyhour – a major investor in LiveSpins – notes that the business has already seen increased attention.

“We had an incredibly strong pipeline and that pipeline has grown since this news,” he said. “Streamers have come to us, game providers have come to us and operators have come to us and taken a look at what we can do for them.

“On LiveSpins we’re seeing tier-one interest, both on the supply side and the operator side, and we’re now speaking with a handful of streamers.”

Scicluna notes that it’s the game studios that are the most interested. With the opportunity to have games front-and-centre of the video, it can be easy to see why.

“I think providers are more interested,” he said. “They were getting exposure via Twitch, but LiveSpins, via the operators might be more stable.”

However, Scicluna rejects the idea that LiveSpins directly competed with Twitch. Instead, he said the two businesses held different roles within the gaming ecosystem, at different stages of the customer journey.

“We were never competing with Twitch, we were complementing Twitch,” he said. “Twitch was more for acquisition. While with LiveSpins, we were streaming in the lobby. We have the streamers, and then we work really hard so that the operators don’t need to.” 

Streaming itself, Scicluna says, has already had a major impact on the online casino sector.

“I think streamers have done an amazing job,” he says. “They’ve created a new level of entertainment on Twitch. Streamers started out with players just playing games, but they realised that to build a community they needed some real content creation with the limits they had.

“So some of them are doing bonus hunts. So they start playing, and when they get a bonus they park it, and then they’ll open all the bonuses together. They do bonus buys, they do tournaments of slots – 50 spins on each slots and the biggest win wins.

“They introduced a level of innovation that has been missing in the industry. But with anything there are downsides. Some streamers were not streaming in a sustainable and responsible way.”

Inevitable?

Reed, though, notes that a crackdown may have always been inevitable.

“My first reaction was compassion for the businesses affected by this,” Reed says. “But we were not particularly surprised. 

“Twitch had revised its policies on casino links and so on previously. Now, I think gambling in mainstream media – digital or not – will always be volatile. You’ll always be subject to policy. So we weren’t particularly surprised.”

In fact, he argues that the eventual outcome was less strict than some might have anticipated. The news followed a great degree of pressure from a number of Twitch’s most popular video game streamers to ban gambling streams entirely.

“There were two pieces of news really,” he says. “One was that remote-licensed casinos would be banned. And they named a few of those. But they then did say you were allowed to stream locally licensed casinos. That was not necessarily a given. 

“They could have just banned playing casino games on their platform.”

In fact, Reed said he could not be fully confident that things wouldn’t change further on the Amazon-owned platform.

“I think social media is going to get increasingly regulated, gambling is going to be increasingly regulated, so you’ll definitely see changes coming to those platforms,” he says. “But gambling is a cultural phenomenon that’s been around for all of mankind and is there to stay. 

“I definitely think that gambling will always have a presence on those platforms but I expect much more regulation in the future around it.”

Scicluna is happy to give credit to Twitch for building large audiences, but agrees that it is too genre-agnostic to be the option of choice for gambling streamers.

“I think Twitch in itself is a streaming platform and built a huge community around video gaming, but it wasn’t really designed for gambling. It’s an agnostic platform which was great for building a large community, but those within a sector know more about how to do so in a more sustainable way.”

Ultimately, Reed believes that certain solutions can only come out of the industry.

“I hope these latest events shows that it’s much better that the industry comes together and develops great community offerings rather than relying on outside industries to cater to them.”

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