Phantoml0rd wins Twitch lawsuit

James "Phantoml0rd" Varga
(Image credit: James "Phantoml0rd" Varga)

In 2016, Twitch imposed a lifetime ban against popular CS:GO streamer James "Phantoml0rd" Varga. The reason for the ban was never made clear—Twitch said only that the channel was closed "due to terms of service violations"—but it was widely assumed to be related to allegations that he was also the owner of the CS:GO skin gambling site CSGOShuffle, which he heavily promoted on his channel.

In 2018, Varga fired back with a lawsuit against Twitch, claiming that it suspended his channel and terminated his contract without providing a required explanation as to why. The suit alleged that Varga was never given written notice of violations and opportunities to correct them as required by the contract, and that his suspension arose from "unsubstantiated, false accusations leveled at Varga by a third party, whose accusations were the culmination of an effort to publicly disparage Varga and take advantage of his popularity." 

According to the suit, Varga wasn't informed of the reason for his suspension until January 2017, when a Twitch employee told him it was due to fraudulent subscribers to his channel. However, he said he was later told that the real problem was the amount of non-gaming content he streamed, including CS:GO skin gambling, which violated content guidelines.

Twitch filed a counter-suit a few months later, saying that Varga had in fact been warned of infractions multiple times over the course of roughly one year prior to his suspension. It also stated that Varga did have a relationship with CSGOShuffle, saying, "He streamed promotions for a gambling website that (1) he had an undisclosed financial interest in, (2) he used to rig jackpots in his favor against users he gained from Twitch, and (3) operated in contravention of the terms of the underlying game's publisher and was potentially illegal."

Three years later, the matter has finally been concluded, and the winner is Varga: A jury has ruled that Twitch "unfairly interfere[d] with Varga's right to receive the benefits of the Partnership Agreement," and that he was harmed by that interference. 

As a result, Varga was awarded total damages of $20,720.34: $15,139.34 in lost earnings from the first 30 days of his suspension, plus $3,060 in lost donations, and $2,521 for lost sponsorships and endorsement deals. It's a far cry from the $35 million he said he felt entitled to in a 2019 stream, but better than a poke in the eye with a sharp stick.

See more

Despite his enthusiasm, it's largely a symbolic win for Varga: Twitch made clear in a statement that it will not pave the way for his return to Twitch. The streaming site said its mistake was purely procedural, and that it has changed its processes for suspending and terminating streamer accounts.

"The jury found Twitch liable for not following the proper procedures for terminating Mr. Varga's contract following his suspension, and the damages reflect the scope of this misstep—specifically, compensation for revenue losses for the duration of the 30-day notice period ($20,720)," a Twitch spokesperson said in an email. "While we regret the procedural failings related to Mr. Varga’s termination in 2016, he repeatedly violated Twitch’s Community Guidelines and exposed our community to harmful content. We absolutely stand behind our decision to terminate his account, and he will not be allowed back onto the service.

"We've since established clearer and more consistent processes for suspensions and account terminations and updated our Contributor License Agreements (CLAs) to ensure clarity and consistency in our procedures for all Twitch Creators."

Twitch's counter-suit against Varga was denied, by the way: The jury found that he knowingly breached the terms of service and made false statements to Twitch, but decided that Twitch did not "reasonably rely on Varga’s representation(s)." Interestingly, it also found that Varga actually did disclose facts relating to a June 2016 CSGOShuffle giveaway to Twitch, and that his disclosure was not "deceptive."

I've reached out to Varga for more information, and will update if I receive a reply.

Andy Chalk

Andy has been gaming on PCs from the very beginning, starting as a youngster with text adventures and primitive action games on a cassette-based TRS80. From there he graduated to the glory days of Sierra Online adventures and Microprose sims, ran a local BBS, learned how to build PCs, and developed a longstanding love of RPGs, immersive sims, and shooters. He began writing videogame news in 2007 for The Escapist and somehow managed to avoid getting fired until 2014, when he joined the storied ranks of PC Gamer. He covers all aspects of the industry, from new game announcements and patch notes to legal disputes, Twitch beefs, esports, and Henry Cavill. Lots of Henry Cavill.