Streamer James "PhantomL0rd" Varga filed a lawsuit against Twitch in February over the 2016 suspension of his account, resulting from his alleged ownership of CSGO skin gambling site CSGOShuffle. The suit claimed, among other things, that he was suspended for "unsubstantiated, false accusations," and that he'd been scapegoated by Twitch in an effort to "divert attention from the fact that Twitch continued to knowingly allow [fraudulent skin gambling] to continue on other Twitch channels.
Now Twitch has filed a counter-suit (via Polygon) alleging that Varga had been warned and penalized for streaming content that violated the terms of his contract multiple times, and for multiple reasons, over the course of roughly a year prior to his suspension. "Most notably, 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," the suit states.
"In running these promotions, Mr. Varga breached his contractual obligations to Twitch and made material misrepresentations to defraud Twitch and its users. Twitch brings this action in order to seek redress for the harm that these and other violations by Mr. Varga caused it and its users."
The suit alleges that Varga violated his contract nine times over two months prior to his suspension, with "sexually suggestive content, content involving self-harm, and content involving racist symbols," on top of the skin-gambling content. It also directly conflicts with Varga's claim about how the contract termination was handled. Varga said in his lawsuit that he wasn't informed of the reason for the suspension until January 2017, almost five months after the fact, and further alleged that Twitch later changed its justification for the suspension, from "fraudulent subscribers" to his streaming of "non-gaming content."
Twitch's counter-suit claims something entirely different, however. "In the days leading up to his termination, representatives of Twitch discussed Mr. Varga's repeated breaches, the Skins Giveaway, and the information about Mr. Varga's involvement in CSGOShuffle in person and gave him an opportunity to explain his position," the suit says. "Mr. Varga did not attempt to communicate with anyone at Twitch regarding the termination of his account until December 2016, the month after a lawsuit filed against him was dismissed (for lack of jurisdiction) in the Western District of Washington, and more than four months after his account was terminated."
The suit doesn't attach a specific figure to the redress it seeks, but asks for "an award of compensatory damages," plus fees and expenses. Twitch's lawsuit against Varga can be seen in full on Scribd.