Meta Faces Lawsuit Over Gambling Scam Ads on Facebook, Instagram

The Consumer Federation of America has taken Meta to court, accusing the company of misleading users about how it tackles fraudulent advertising on Facebook and Instagram. Filed in Washington, DC, the lawsuit claims Meta’s handling of scam ads, including scam gambling sites, violates local consumer protection laws. 

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Unlike scams that rely on direct contact with victims, CFA’s case zeroes in on fraudulent ads that it says Meta profited from while allowing them to spread widely. The complaint highlights examples from Meta’s ads library, including promotions targeting people by birth year with promises of $1,400 checks, offers of free government iPhones, and other well‑known scam formats.

Meta pushed back against the allegations. Spokesperson Chris Sgro said, “These allegations misrepresent the reality of our work and we will fight them.”

Ben Winters, CFA’s director of AI and data privacy, told WIRED that questionable ads are easy to find. He explained that searches for terms like “free phone” or “stimulus check” in Meta’s ad library reveal more dubious promotions. WIRED itself found live ads for “secret tax checks” leading to sites promising to reveal “Wall Street’s recession‑proof investing strategy.” Meta did not respond when asked if such ads comply with its policies.

CFA seeking to recover damages

The Consumer Federation of America is asking the court not only to recover damages but also what it calls Meta’s illegal profits, while pressing for reforms in how the company handles advertising. 

Winters of CFA said more needs to be done to stop repeat offenders and to catch misleading ads, like those promising free government programs, before they reach consumers.

Meta’s platforms have drawn particular scrutiny because of their reach. Facebook, Instagram, and WhatsApp are among the most widely used in the U.S., according to Pew Research Center.

Internal documents reported by Reuters in late 2025 showed how Meta dealt with fraudulent activity, including a May 2025 presentation estimating that its platforms were tied to a third of all successful scams nationwide. Another document suggested it was “easier to advertise scams on Meta platforms than Google.” 

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Reuters also cited a 2024 internal estimate that around 10.1% of Meta’s revenue, roughly $16 billion, came from ads that were scams or prohibited content. That figure matched the FBI’s estimate of total losses from internet crime in the US that same year.

At the time, Meta dismissed the estimate as “rough and overly inclusive,” arguing that the reporting distorted its approach to fraud. The company said the actual revenue was lower but declined to provide a number.

“We aggressively combat scams across our platforms to protect people and businesses,” says Sgro, the Meta spokesperson. “[L]ast year alone, we removed over 159 million scam ads, 92 percent of which we took down before anyone reported them, and took down 10.9 million accounts on Facebook and Instagram associated with criminal scam centers.”

Meta continues to receive heat for illegal gambling ads

The CFA case comes months after a Paris court ruling that forced Meta to take stronger action against gambling promotions. On January 28, 2026, the Paris Court of Appeal upheld earlier orders requiring Meta Platforms Ireland to block illegal casino ads on Facebook, Instagram, and Messenger.

The issue isn’t confined to France. Regulators in the Netherlands, the UK, Malaysia, and Brazil have all criticized Meta for failing to curb gambling promotions from unlicensed operators. Dutch trade group VNLOK found that most gambling ads reaching users came from illegal sources, while UKGC officials warned about ads promoting sites “not on GamStop.” 

In Malaysia, Communications Minister Fahmi Fadzil said over 120,000 of 168,000 takedown requests sent to Facebook involved gambling content. Brazil’s Attorney General’s Office also issued a formal notice last August demanding that Meta remove unauthorized betting ads under its new laws.

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