Illegal Online Gambling Ads Fuel €600 Million Market, spark Legal Battle with Meta
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A surge in deceptive online gambling advertisements, particularly on Facebook, is costing the german state millions in lost tax revenue and prompting legal action against the social media giant, Meta.A growing network of illegal casinos is exploiting loopholes and utilizing aggressive marketing tactics, including the unauthorized use of established casino brands, to lure unsuspecting users.
The Rise of Deceptive Advertising
The internet is awash with promises of swift riches,and a particularly insidious method employed by providers like “happy Day” involves showcasing purported winners of rigged games of chance.These advertisements frequently feature the first and last name of individuals, creating a false sense of legitimacy and encouraging others to gamble.
Even as it faces mounting criticism for enabling illicit activities. A study by the gambling provider Tipico estimates that there are currently 75,000 campaigns for illegal gambling operating within Germany.
The financial impact is notable. The German state is losing an estimated €20 million in tax revenue each month due to illegal gambling – exceeding the revenue generated from legal gambling operations.
Casinos Fight Back
Tobias Wald, managing director of the Baden-Württemberg casinos, which include locations in Stuttgart, Konstanz, and Baden-Baden, has been a vocal critic of the practice. “Our Casino in Baden-Baden is one of the best-known in Europe,” Wald stated, explaining why the brand is frequently targeted by illegal providers.”We don’t run an online casino,” he emphasized, yet illegal platforms routinely create the impression that they are affiliated with legitimate establishments.
In one particularly brazen instance, an advertising video for an illegal platform was filmed directly in front of the Casino Baden-Baden. Wald’s team reports instances of guests alerting them to these misleading advertisements, and any indication of illegal advertising is instantly reported to Meta. Though, initial responses were slow, and progress has been limited.
legal Action Looms
“We have documented several cases and will take legal action against Meta together with the German Casino Association,” wald announced. This legal challenge represents a novel approach in Germany, but it follows a successful precedent set in France, where the Barrère Group successfully compelled Meta to address similar issues.
A Massive Illegal Market
The scale of the problem is substantial. the Joint Gaming Authority of the States (GGL) estimates the market volume of illegal gambling sites operating in Germany to be between €500 and €600 million in 2024. The GGL has registered 858 German-language illegal gambling sites and is working to enforce regulations for legal providers. However, illegal operators often circumvent these rules, lacking the necessary state control and failing to adhere to youth and consumer protection standards.
Meta’s Response and Concerns Over “cloaking”
Meta maintains it is taking steps to combat fraudulent activity on its platforms, stating, “We do not allow content that deliberately deceives or misleads others.” A spokesperson added that problematic advertisements are removed once identified. Though, the company downplayed the figure of ten percent income from illegal ads, characterizing it as “a rough and broad estimate.”
A significant challenge lies in the practice of “cloaking,” where advertisements do not accurately reflect the destination website, making it tough to identify illegal activities.
The Need for Clearer Regulations
Wald highlights that many illegal providers operate with foreign licenses, circumventing German law. He argues that Meta must take more consistent action against these advertisements. A spokesperson for Tipico echoed this sentiment, suggesting meta could substantially restrict illegal advertising if it prioritized doing so over maximizing revenue.
Ultimately, Germany needs a legal framework that allows users to easily distinguish between legal and illegal online casinos. This will require a concerted effort from regulators, law enforcement, and social media platforms to protect consumers and ensure a fair and transparent gambling market.
