James “Phantoml0rd” Varga, a streamer who allegedly promoted a Counter-Strike: Global Offensive gambling site without disclosing his business ties to it, is suing Twitch — nearly 600 days after he was banned from the platform.
Varga established himself as one of the most influential and popular streamers between 2012 and 2016. Known for playing games like League of Legends and CS:GO, Varga amassed more than one million followers and 16,000 subscribers. But the streamer filed a complaint to the Superior Court of California in San Francisco on Feb. 14, claiming that Twitch owes him for monetary damages after he was banned in July 2016.
On July 19, 2016, Varga’s Twitch channel was deleted after reports claimed that Varga owned a site where CS: GO players could gamble with the game’s weapon skins, which have real monetary value. Varga reportedly rigged past bets to ensure they tipped in his favor. He featured the site, CSGOShuffle, during one of his streams without disclosing his connection to it, and made it appear that his multiple wins were the result of chance rather than a rigged system. The video below, uploaded to YouTube by Richard Lewis, includes screenshots of conversations that “heavily suggest, almost to a degree of certainty, that Phantoml0rd is the owner of CSGOShuffle.”
Varga never admitted to owning the site, but CS:GO developer Valve later threatened legal action against CSGO Shuffle if it didn’t cease operations.
As negative attention swirled around CS:GO gambling sites, Twitch published a blog post telling users to refrain from streaming “content that breaks the terms of service or user agreements of third-parties.” As a result, any “content in which the broadcaster uses or promotes services that violate Valve’s stated restrictions is prohibited on Twitch.”
Today Valve released an announcement clarifying the intended use of Steam’s trading system and OpenID API. Valve specifically notes that using “the OpenID API and making the same web calls as Steam users to run a gambling business is not allowed by our API nor our user agreements.”
As a reminder, per Twitch’s Terms of Service, broadcasters are not permitted to stream content that breaks the terms of service or user agreements of third-parties. As such, content in which the broadcaster uses or promotes services that violate Valve’s stated restrictions is prohibited on Twitch. Our Rules of Conduct lists other examples such as playing pirated games and playing on unauthorized private servers.
In the lawsuit, Varga claims that Twitch broke its contract with him by never issuing a proper explanation for why his channel was removed. The agreement that Varga and Twitch made in 2015 stated that if Twitch wanted to breach the contract, the company had to give Varga a written explanation — something that never happened, according to the lawsuit.
“Twitch has made only vague and ever-changing allegations of breaches of the terms of service,” the lawsuit reads.
Documents also suggest that Twitch representatives told Varga that “he was permitted to broadcast the very content that they later used as an excuse to illegally terminate his contract” as a Twitch Partner. Attached messages sent from Twitch representatives to Varga claim that Twitch told Varga that he could stream gambling content, but only for 30 minutes. After multiple users said that Varga was streaming gambling sessions for longer than that, a Twitch representative called the situation was a “clusterfuck ... it’s confusing as hell.”
“Do what you think is correct, I just wouldn’t risk it honestly,” the Twitch representative said.
Twitch told Varga that his ban was indefinite but did not “specify the nature of the violation nor did Twitch identify the conduct that it alleged amounted to a violation,” according to the streamer. It wasn’t until January 2017 that Twitch told Varga that he had amassed fraudulent subscribers, like bots, which violated the company’s terms of service.
Varga re-appeared on YouTube in July 2017, with a statement about the way Twitch handled his case. The video has since been removed.
“As many of you are already aware there is an ongoing dispute between myself and Twitch.TV,” the statement said. “As a result I am not currently providing content through Twitch.TV. While I cannot and will not comment on the substance of this dispute, I assure you that I am considering all of my legal options and am looking forward to asserting my rights to the fullest extent of the law.”
Varga is seeking financial retribution following his ban, saying that the misrepresentation of his character and his inability to generate a revenue from streaming, his former full-time job, has caused irreparable damages.
A representative for Twitch told Polygon the company doesn’t “comment on pending litigation.” The full lawsuit filing can be read below.
Update: We’ve added additional context for a video embedded above that includes original reporting on Varga’s connection to CSGOShuffle.