European Commission study warns ad platforms may promote unlicensed gambling

Online advertising platforms can allow unlicensed gambling operators to promote their services illegally in countries where they hold no authorisation, exposing users to fraud risk, according to a study prepared for the European Commission. The report, 'Support Contract on Financial Scams Study', was produced by Spark Legal and Policy Consulting and Open Evidence as part of work analysing risks linked to online financial scams under the Digital Services Act (DSA).

According to the document, digital advertising systems can let gambling operators without a licence promote their services illegally to users in countries where they do not hold a valid authorisation, with the risk of directing consumers to unregulated platforms and without checks on operators' licences. Paid advertising is one of the main channels for spreading online gambling fraud, the report says.

The report cites an analysis by Debunk.org finding that 99% of the gambling fraud cases examined involved advertisements. Fraudsters use digital platforms to create pages and launch promotional campaigns quickly aimed at users in different countries and languages, the study says. The advertisements also use deceptive techniques, including artificial-intelligence-generated deepfakes imitating public figures, fake news services and imitations of trusted brands.

The study focuses in particular on gambling scams, frauds involving fake online casinos, sports betting services and fraudulent gambling platforms. Operators draw in victims by promising privileged access, guaranteed winnings or apparently reliable betting systems, persuading them to deposit small sums initially. The report says the platforms are manipulated so that losses are inevitable and displayed winnings are fictitious; when users try to withdraw money, fraudsters block the transaction, freeze the account or impose invented conditions that prevent payment of winnings.

A further risk concerns the distribution of fraudulent gambling applications through official stores. The document cites research that identified hundreds of fake apps on Apple App Store and Google Play, initially presented with harmless descriptions and later converted into gambling interfaces. Through delayed activation mechanisms, developers are able to enable hidden functions after an application is approved, circumventing automatic controls and checks carried out by the platforms, according to the report.

The report also flags particular exposure to fraud for users who frequent online gambling environments and for young people, especially those aged between 16 and 24, who are considered more at risk because of their familiarity with digital environments featuring game-like mechanics. The study highlights the importance of checks on advertising placements and verification of operators' authorisations to counter the spread of illegal services and protect consumers.