Meta supposedly earnt billions of dollars from running fraudulent ads, including for illegal online casinos, according to an investigation by Reuters.
The tech giant internally projected that 10% of its overall annual revenue for 2024 – roughly $16 billion – came from running ads for scams and banned goods.
Leaked documents seen by Reuters revealed that over the last three years, Meta “failed to identify and stop an avalanche of ads” that exposed billions of users across Facebook, Instagram and WhatsApp to “fraudulent e-commerce and investment schemes, illegal online casinos, and the sale of banned medical products”.
One document, dated December 2024, also suggested the company displayed approximately 15 billion “higher risk” scam ads daily – ads which are clearly fraudulent. While another, also from late 2024, claimed these ads contributed to roughly $7 billion to Meta’s annual revenue each year.
The documents suggest the Facebook owner is slow to respond to such ads and only bans them if its automated system predicts there is a 95% or higher chance of it being fraudulent. Those referred to as ‘high value accounts’ – accounts spending big on ads – were able to rock up more than 500 strikes without being shut down.
If it is less certain but is suspicious of a scam ad, Meta charges a higher fee as a penalty.
Furthermore, users who click on a scam ad are likely to be shown more of them because of the way the social media company’s ad personalisation algorithm works.
A Meta spokesperson told iGaming expert: “We aggressively fight fraud and scams because people on our platforms don’t want this content, legitimate advertisers don’t want it and we don’t want it either.
“Scammers are persistent criminals whose efforts, often driven by ruthless cross-border criminal networks that operate on a global scale, continue to grow in sophistication and complexity. As scam activity becomes more persistent and sophisticated, so do our efforts.
“Unfortunately, the leaked documents present a selective view that distorts Meta’s approach to fraud and scams by focusing on our efforts to assess the scale of the challenge, not the full range of actions we have taken to address the problem.”
The documents do make clear the tech giant is aiming to cut the share of Facebook and Instagram revenue generated from scam ads by as much as 50% in some markets. However, it is also concerned that any abrupt reductions in such ads could affect business projections, according to a 2025 document Reuters reported.
In the interim, Meta has acknowledged that it will face regulatory fines for these fraudulent ads and anticipates this to be up to $1 billion – a figure significantly lower than the actual revenue it has derived from this.
‘Social media companies are goliaths’
The news comes as “no surprise” for those in the industry, Duncan Garvie, founder of BetBlocker, told iGaming Expert.
“Many dubious businesses and organisations, in a variety of fields, have looked to take advantage of the absent regulation and lax oversight of social media to engage in marketing and communications that would never pass on other channels of communication.”
Earlier this year, a report by the All India Gaming Federation found that Facebook ads were fuelling the black market in the country with unlicensed betting platforms getting 1.6 billion visits over a three month period.
In September, the Malaysian government called Meta out on its prevalence of black market gambling ads.
Garvie added: “These gaps in supervision are allowing bad actors to defraud people, and to target young people with damaging products. We’ve watched as an entire generation has been indoctrinated into gambling on streaming platforms, as adult activities are normalised for younger and younger people.
“The social media companies are goliaths in the modern world, and can exert huge sway over public perception and the democratic process. It is critical that governments around the world get to grips with these businesses and engage in far more robust oversight of how these businesses comport themselves.”
