Daybreak - Meta has an illegal gambling ads problem. It doesn't really care

Episode Date: January 14, 2026

Four months after India's nationwide ban on online gambling ads, Meta platforms were still running them—140 in December alone. A Reuters investigation into leaked internal documents reveals this isn't an oversight. Meta made specific calculations about how much enforcement it could afford, and governments worldwide are hitting the same wall. From Malaysia to the Philippines, removal requests pile up while the ads keep running. What happens when a platform decides compliance is negotiable? Host Rachel Varghese digs in.Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. If you're a person with an online presence on Facebook, Instagram or WhatsApp, you've probably seen a scammy ad or two. If you're lucky, you've just encountered them and scrolled right past.

If you're unlucky, you've probably had the misfortune of interacting with them and getting duped. Now, don't worry, there's no shame, because you wouldn't be the only one. In fact, the Press Information Bureau says that in India, cybersecurity incidents have gone up from a little more than 10 lakhs in 2022 to almost 23 lakhs in 2024. As data and devices have grown cheaper and more Indians have started getting online, fraudsters have been doing their best to keep up. And amongst the most aggressive, persistent methods they've used

is one that I'm sure all of us have come across at some point in our lives. Ads for online betting and gambling. See, online gambling had become so popular that these platforms had actually generated up to 400 crore rupees in criminal proceeds. And that's not it. There have been several other real world harms. Young users, including minors, have reportedly lost significant amounts, sometimes resulting in devastating consequences. You see, these platforms are designed with addictive algorithms that keep players hooked by giving them the hope that they can always win back their losses.

To curb some of the concerns regarding illegal operations like this, in July 2025, Indian authorities summoned Meta and Google in a probe investigating the hosting of ads promoting illegal betting. Now, the investigation is still ongoing and nothing has really come off it yet. But the situation was so bad that the government didn't want to wait for these companies to act. Instead, it made a major aggressive and decisive move in the form of the online gaming bill last year. This 2025 bill passed last August, just a month after the summons, bars every form of real money online game, including its promotion or advertisement. So what's strange is this?

Four months after this ban, illegal online gambling ads are still widespread in India, and especially on meta platforms. A rest of world analysis showed that in just last December alone, there were at least 140 such active ads. And what's worse is that a Reuters investigation from last November of previously unreported internal documents from Meta revealed something shocking. In 2024, Meta projected that it would earn $16 billion, which is about 10% of its total revenue from ads that promoted fraudulent investment schemes, illegal online casinos and the

sale of banned products. And all Meta was ready to spend to crack down on this price. problem was a measly 0.15% of its entire revenue. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Rachel Verkes. And every day of the week, my co-host, Niktha Sharma and I will bring you one new story that is worth understanding and worth your time. Today is Wednesday, the 14th of January. It is easier to advertise scams on meta platforms than Google.

That statement's not coming from me. That's an admission from meta itself. It's from one of the internal documents that Reuters investigated. It's all part of Meta's own self-appraisal because, you see, their lack of action on these ads isn't coming from a place of ignorance. They're actually very well-informed and aware of the bad ads problem on their platform. An internal document from December 2024 studied that on average, meta platforms show its users 15 billion higher-risk scam ads every year. day. These ads are the ones that show very clear signs of being fraudulent. Can you believe that? Fifteen billion fraudulent ads on a set of platforms with more than

three billion daily active users. It kind of makes sense why governments had to step in and get involved. And think about how the algorithm works on these apps. Once you click or interact with something, even by accident, the app assumes that it's what you're interested in. And to keep you on the platform, similar content will keep getting recommended to you. Which means these 15 billion ads are not likely to be those rare ones that you scroll past ones and just forget about. They'll keep popping up on your feed. And out of these, the online gambling ads would usually take a user to another website where they'd be asked to link their bank accounts so that they could bet or gamble with ease. So what is Meta doing to stop this?

Arguably, it's not doing much. Right now, MetaBad's advertisers only if its automated systems are 95% certain that an account is committing fraud. For advertisers that seem definitely shady, but don't quite meet the 95%, the platforms charge higher ad rates to try and make posting ads less accessible. But still, that 95% sounds like a pretty deliberate limit. because it leaves Meta a 5% margin where the company can just claim uncertainty. Now, sure, that doesn't inspire a lot of confidence, but there is some good news. The company does intend to eventually reduce the amount of scam ads on its websites. But what's concerning is that it doesn't want to do it immediately and definitely not in a way that would hurt its revenue.

In fact, Meta has decided that it's not. going to actively bet advertisers on its own. It will only act if there's no way to dodge regulatory action. An internal document from the first half of 2025 even clarifies that the team that's working on this problem shouldn't be using any more than 0.15% of the company's entire revenue to take action. Considering that Meta's revenue is about $90 billion, dollars, that percentage amounts to just about $130 million, which sounds like a lot, but is not a lot when it comes to operations of this importance and scale. Still, Meta shouldn't want to get on the bad side of regulators, especially in countries

where it has huge market shares. Stay tuned. Now, while Meta hasn't outright denied the validity of the documents, they've pushed back on the overall narrative a little bit. Andy Stone, the meta spokesperson said to Reuters that the 10% revenue estimate was rough and overly inclusive and actually included legitimate ads as well. Though he wouldn't provide an updated number. He also insisted that meta was aggressively fighting fraud and scams because it's something neither meta users or legit advertisers on its platforms appreciate.

But meta's actions have had it on the wrong side of the. of the law all over the world. Meta itself prohibits online gambling ads in 18 countries. These ads, however, continue to run in at least 13 out of these 18 countries, according to a rest of world analysis. To start with an example, Meta has itself stated in an internal presentation that in the U.S., the company's platforms were involved in a third of all successful scams. In Asia, the story doesn't get any better.

Now, the regulatory glare in countries like Japan was getting intense. Meta was scared that it would be forced to take down far too many ads which would bring down its revenue. So, it came up with a general global playbook to reduce the discoverability of scam ads on its platform. Reduce the discoverability, not just get rid of them altogether. Now, this playbook meta has since deployed in markets like India, Europe, Australia, Thailand and more. So let me tell you what this playbook is. Now, Meta has what it calls an ad library,

which is a public database in which anyone can look up Facebook and Instagram ads using keywords. What Meta employees did was this. They first figured out what the keywords these Japanese regulators were searching for. Then they'd search these terms themselves and start deleting the illegal ads that popped up. and only those. It's actually quite a clever strategy. It brought them enough time to look like they were doing something about the ads and they flew under those regulatory radars,

while the ads that didn't come up under these keywords would stay up and running. The plan worked. Japanese regulators were actually quite pleased at the progress and didn't make any demands of the company. The shocking thing is that Meta's team actually describes this process in their documents as making problematic content not findable specifically for regulators, investigators and journalists. Meta maintains, at least according to its policy, that it's not responsible for how authorized ad accounts comply with local gambling laws and

regulations. Basically, it's washing its hands off of any responsibility as a publisher or a platform. In other countries, META has remained equally impenetrable. For example, in the Philippines, where over 60% of online gambling operations are illegal, advocacy group Digital Pinoys provided meta with details of over 300 websites running illegal gambling ads on Facebook. The platform took down six. Even Malaysia's government sent META more than 1,000-20,000 content removal requests related to illegal gambling. Fahmy Fadzil, the country's communications minister, publicly criticized Mata for failure to restrict illegal content.

His frustration was very specific. If a gambling ad is paid for using a credit card and Facebook knows this content is illegal in Malaysia, they should block the credit card account used. But Facebook has refused to do so. He accused Mata of not cooperating in combating cybercrime after content kept appearing online. So this is the beast India faces.

One that's barely moved by removal requests, threats of fines and even investigations. By the way, Meta actually remained a no-show at the summons we mentioned earlier. So it has already snubbed an Indian regulatory body. What's clear is that Meta has weighed the risks. In a document from November 2024, Meta clearly. states that it knows that it stands to be fined in certain regions. But those fines are apparently a small price to pay for how much they earn from these ads. Given the depth and detail of these documents or the processes Meta's teams have come up with,

it looks like Meta could certainly crack down on these ads heavily if it wanted to. But the question is whether any government, even one like India, that's representing over a billion users, has enough leverage to make meta actually want to. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription offers daily long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the Ken website. Today's episode was hosted and produced by my colleague Rachel Vargis and edited by Rajiv Sien.