According to a Barron investigation completed with the help of web traffic analytics firm Similarweb, in the past three years, a whopping number of 27 overseas gambling platforms have spent around $28 million on Google Search ads alone to attract 56 million visitors in total.
The problem is most of these operators that recruited customers using paid ads on Facebook, Google, and Amazon-owned Twitch did not have a license and were in violation of Big Tech regulations, putting minors at risk while allegedly violating the terms of service for each of these platforms.
Skin Gambling Ads
The platforms promoted skin gambling, a form of gambling in the legal gray area that allows players to use virtual goods (in-game items known as “skins”) as virtual currency to bet on the outcome of games of chance.
The sites relied on the iconic Counter-Strike (CS) game to allow players to use skins as gambling currency.
Since the skins won as prizes can bring thousands of dollars in marketplaces from third parties, the stakes and the associated risks are as real as possible, especially when it comes to minors.
Minors, More Vulnerable to the Effects of Gambling & Ads
According to the International Gaming Research Unit at Nottingham Trent University’s director and professor of behavioral addiction, Mark Griffiths, minors “are more vulnerable to the effects of both gambling and gambling advertising.”
As explained by Rob Minnick, a gambling counselor who makes popular gambling addiction videos on TikTok, some of today’s social media ads introduce children to gambling “years ahead of where they otherwise would have found it if it wasn’t advertised to them.”
Minnick reinforced his statement saying that simply “being an adolescent in and of itself is a risk factor” of developing a gambling problem.
In the US, Google does not allow “advertising for internet-based games where money or other items of value are paid or wagered to win a greater sum of money or other item of value.”
Once online “activities involved constitute gambling, including when they involve skins, our gambling policies apply,” said a Google spokesperson.
Meta Platforms regulations say ads promoting online gambling and gaming are only allowed with their “prior written permission.”
Twitch explained skin gambling based on the CS game as well as “any promotion or sponsorship of skins gambling—is not allowed.”
Despite these strict policies, skin gambling ads continue to expand. While Barron offered examples found during the investigation at Google and Amazon’s request, most of the respective gambling platforms continue to actively advertise there.
While Meta Platforms decided to disable several ads following the same inquiries, it only took a few days for them to be brought back to the library.
Big Money Involved
One explanation could be the large amount of money pumped into these ads. For example, Singapore-based online casino Hellcase used a series of Facebook and Instagram ads, pumped millions in Google Search campaigns and spent a lot of money on YouTube influencers to reach millions of potential customers.
Google alone has accepted around $5 million from the online casino in exchange for an estimated eight million users reaching the platform.
Hellcase’s main problem is that it does not provide the mandatory age verification procedure for users needed when advertising gambling-like activity.
Similar issues are reported in other parts of the world.
CSGORoll Ads in Australia
According to the Australian Communications and Media Authority’s (ACMA) chair Nerida O’Loughlin, “Skins gambling services are particularly concerning as they tap into a youth market and have the potential to convert gamers into gamblers.”
In May 2023, ACMA acted against skin gambling site CSGORoll, punishing it for “contravening” the country’s gambling laws by enabling users to deposit CS skins “in exchange for in-game coins” available for gambling on “casino-style games.”
In the year that followed the regulatory decision, Google kept serving ads for CSGORoll to Australians, as per the company’s Ads Transparency Center, a tool that showcases active and past ads published via Google.
In June, a Google spokesperson informed Barron’s that the ad account for CSGORoll’s parent company was “no longer active” with them as a result of the “appropriate enforcement action” taken earlier.
Nonetheless, the ads transparency tool keeps showing active ads for CSGORoll in the country.
In early July, the CSGORoll ads vanished from Australia. However, ads that are directing users to CSGORoll’s platform are still active for US users.
Similarweb estimates the site spent $2.4 million on Google Search ads at a global level in the first half of the current year.
Google explains gambling ads are allowed in Australia and other countries “as long as the advertiser is a licensed operator” that can provide a valid license.
CSGORoll does not display any proof of license on its site. In fact, of the 27 assessed operators advertising via Google, only four provided proof of a gambling license issued by their governments.
Neither of them has issued warnings regarding the dangers of gambling, which is another mandatory requirement to be allowed to advertise gambling on Google’s platforms.
In June, the Swedish Gaming Authority banned four online gambling operators for providing games without a license. Two of them were skin gambling operators.
At the start of the year, we reported on data from a study exploring the functioning of three popular Chinese skin gambling companies that kept flourishing despite legal constraints.
