Big Tech and the Black Market: An Unholy Alliance

Introduction

Germany’s regulated gambling industry is facing a grave threat from an open secret: illegal online gambling advertising flourishing on major social media platforms. In particular, Meta – the owner of Facebook and Instagram – has become a hotbed for promotions of unlicensed online casinos and betting sites that are outlawed in Germany. This isn’t just a minor policy violation; it undermines the core safeguards of our gambling regulation. Such illicit advertising endangers player protection and youth protection, erodes tax compliance, subverts anti-money laundering efforts, and funnels money to organised crime and even terrorist financing. In Germany, promoting unlicensed gambling is explicitly a criminal offense, just as participating in such activities is. Allowing black-market casinos to advertise with impunity not only thwarts the hard-won consumer protections of the Interstate Treaty on Gambling but also deprives the state of tax revenue. In short, illegal gambling ads on Meta’s platforms harm not only our industry’s integrity but society at large. We cannot tolerate a situation where a Fortune 500 tech giant’s advertising business effectively aids and abets criminal activity in our market. Under the EU’s Digital Services Act, very large platforms are required to provide a publicly accessible advertising repository. This archive allows users and researchers to see who placed an ad, which audience it targeted, and how long it ran.

The Reuters Investigation – Meta’s $16 Billion Windfall from Scam Ads

A recent Reuters exposé revealed the startling extent to which Meta has been profiting from scam and illegal ads worldwide. Internal Meta documents seen by Reuters show that the company projected roughly 10% of its entire 2024 ad revenue – about $16 billion – would come from ads for scams and banned goods. Among these were fraudulent investment schemes, counterfeit products, and importantly, black-market online casinos targeting users on Facebook, Instagram, and WhatsApp. Meta’s own confidential assessments painted a sobering picture: they estimated that about 15 billion high-risk scam ads (blatantly fraudulent ads) are shown to users each day. This translates into enormous income – on the order of $7 billion a year – flowing from dubious advertisers that Meta’s systems flagged as likely bad actors.

How could a regulated platform allow this deluge of illicit advertising? Reuters found that Meta’s internal ad enforcement deliberately tolerates a high level of suspect ads. The company’s automated systems only ban an advertiser if they are 95% certain the advertiser is scamming users; if the confidence is, say, 80–90%, Meta does not immediately ban them. Instead, Meta charges these “likely scammers” higher ad rates as a penalty, essentially letting the ads run while making a premium profit from them. In theory, this surcharge is meant to dissuade bad actors – in practice, it means Meta continues to earn money from advertisements that its own algorithms believe are probably illegal. Alarmingly, users who click on such scam ads are then shown even more of them going forward, because Meta’s ad-personalisation algorithms learn that the user is interested and serve up similar content. In effect, Meta’s platform not only tolerates illegal gambling ads – it can inadvertently optimise their reach by targeting them to susceptible users. These revelations underscore a fundamental breakdown: the company’s pursuit of ad revenue has overtaken its responsibility to protect users and uphold the law. As one fraud investigator told Reuters, “If regulators wouldn’t tolerate banks profiting from fraud, they shouldn’t tolerate it in tech.” The same must hold true for profiting from illegal gambling ads.

Crucially, this is not just a global or theoretical issue – it has a very real impact in Germany. Meta’s advertising revenue in Germany is estimated at around $5 billion annually. If we apply the company’s own 10% projection, that suggests roughly $500 million in ad spend in Germany comes from scam or unlawful ads. We estimate about half of this sum is driven by unlicensed online casino ads targeting German consumers. In other words, Meta is likely making more money from black-market gambling ads in Germany than from all legal gambling advertising in the country. This perverse situation means the platform earns more from illegality than from legality in our sector – an unacceptable state of affairs that flips the intent of regulation on its head.

Pushing Back on Meta’s Inaction

As the market leader in Germany’s regulated gaming industry, Tipico could not stand by and watch this rampant illegal advertising continue unabated. We decided to confront Meta with the evidence and demand action. In April 2025, we met with Meta’s representatives and presented the problem in detail – showing how countless ads on Facebook and Instagram were promoting gambling sites without German licenses, in plain violation of German law. Over the ensuing six months, we followed up repeatedly (no fewer than five times) to press Meta for a solution. The responses were disappointing: polite acknowledgments and empty reassurances, but no substantive change. To date, Meta has failed to implement any concrete measures to stem the flood of these illegal gambling promotions on their platforms. Given the scale of the issue, one can’t help but suspect this slow-walking is by design – after all, why would Meta rush to shut off a revenue stream that, by its own calculations, is so lucrative?

In parallel, we undertook our own investigation to document just how bad the problem is. We turned to Meta’s own transparency tool – the Meta Ads Library – which publicly tracks advertisements running on its platforms. Using a custom-developed search and filter system, we identified over 75,000 active ad campaigns in October 2025 alone promoting unlicensed online gambling to German users. Each campaign entry from the Ads Library provided telling details: the ad creative, the target demographics, the dates it ran, and even estimates of reach. This trove of data, provided by Meta itself, is damning. It proves that illegal gambling operators are advertising at massive scale on Meta’s platforms, out in the open – a systematic breach of law, meticulously recorded by the perpetrator’s own tools. Particularly eye-opening, around 9% of these illicit gambling ad campaigns were using Meta’s “Dynamic Creative Optimisation” (DCO) feature. DCO is an automated tool that Meta offers to advertisers to improve ad performance by mixing and matching creative elements. In other words, Meta’s technology was actively optimising the effectiveness of illegal gambling ads – hardly keeping at arm’s length from criminal content. It’s a bitter irony: the company claims to keep distance from black-market advertisers, yet here its algorithms are essentially giving them a pat on the back, helping refine which ad headlines or images attract more clicks. This level of entanglement calls into question Meta’s commitment to any “trust and safety” principles when profits are at stake.

The data we gathered also enabled us to estimate the economic damage of this illegal advertising. Even under conservative assumptions – for instance, if each of the 75,000 ad campaigns brought in just one new player generating about €500 in net gaming revenue per year – the black-market turnover from these campaigns would be around €375 million. That implies a tax loss to the German state of roughly €20 million annually (at a 5.3% gambling tax rate). To put it bluntly, millions in potential tax revenue are being lost because unlicensed casinos (which pay no taxes or levies) are acquiring customers en masse via Meta’s channels. That €20 million exceeds the government’s typical monthly revenue from the entire regulated online slots sector. And that estimate might be just the tip of the iceberg – if each campaign lured more than one player on average (likely, given that some ads ran for weeks and reached tens of thousands of users), the tax leakage and criminal turnover could be two or three times higher. This is money that goes straight into the shadow economy, fuelling illegitimate enterprises, rather than benefitting the public or compliant operators who play by the rules.

Next Steps – Regulatory Action and Legal Options

Tipico has compiled all its findings – the correspondence with Meta, the Ads Library data, and the quantitative analyses – and is now submitting them to the German gambling regulatory authority in Halle. The Gemeinsame Glücksspielbehörde der Länder (GGL), Germany’s federal gambling regulator, has the mandate to enforce our advertising and gambling laws, and needs to see just how blatantly a major platform is flouting those laws. We are also furnishing Meta’s leadership with a formal report of our findings, making it crystal clear that the company’s inaction is unacceptable and cannot continue without consequence.

Call to Action – Industry Unity Against Big Tech’s Complicity

It’s time for the entire legal gambling industry and its stakeholders to speak with one voice on this issue. The era of silently tolerating Big Tech’s enablement of black-market gambling is over. If we fail to act, we risk tarnishing our industry’s reputation and giving illegal operators free rein to undermine the hard work we’ve done to create a safe, regulated gambling environment.

Change is possible – we’ve seen positive examples showing that effective action can be taken when pressure is high. In fact, Google reportedly reduced pay-per-click advertising for black-market products by 99% in 2025 under regulatory and public pressure. This demonstrates that tech giants can find and implement solutions to filter out illicit content if they truly prioritise doing so. No legal operator should accept this unholy alliance between big tech and the black-market. So, we will keep gathering data, raising awareness, and collaborating with authorities to ramp up the pressure.

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