Meta Faces Lawsuit Over Sports Betting Ads on Facebook, Instagram

A flood of sportsbook ads hit the plaintiff’s Instagram feed the moment he searched for sports betting, despite such advertisements being illegal in his state of California.

A recently filed lawsuit accuses Meta of breaking multiple California gambling laws by allowing Facebook and Instagram to show sports betting ads directly targeting consumers in that state, despite sportsbooks being illegal there.

Joseph Allen brought the complaint (PDF) in California Superior Court in Sacramento on June 2 against Meta Platforms Inc. and a number of yet-unidentified defendants.

According to the lawsuit, Meta used algorithms that detected Smith had an interest in sportsbooks. It then bombarded him with paid ads attempting to coerce him into using sports betting apps for monetized gambling, which has not been approved in California, making it illegal to advertise such services to consumers in that state.

Sports Betting Addiction Problems

Following a landmark Supreme Court ruling in 2018, states were given the option of allowing sports gambling. Many have done so, making online sportsbooks like DraftKings, FanDuel and BetMGM increasingly popular nationwide.

However, critics say that the sportsbook advertisements have not stopped at state borders, enticing consumers into gambling where the practice is not legal. Additionally, the apps are accused of using aggressive and deceptive promotions and algorithms that detect problem gambling habits in consumers and exploit them.

This has led to an increase in concerns about gambling addiction overall, and sports betting addiction in particular, which can cause significant financial and psychological damage. College-age students have been hit particularly hard, both because of their more willing use of online payment systems and because many are on their own for the first time, learning how to manage their money.

As a result, a growing number of sports betting addiction lawsuits have been filed against the sportsbooks, claiming they have intentionally encouraged self-destructive and compulsive behavior for the sake of profits. This appears to be one of the first lawsuits to target a social media platform for its sportsbook advertising practices.

Meta Sports Betting Ads Allegations

Smith’s complaint indicates that in April he conducted an online search to determine which sportsbooks were still illegal in California. The search followed a California law that went into effect in January of this year, indicating that it was illegal to knowingly advertise, promote or facilitate illegal gambling to consumers in that state.

The lawsuit notes that “within moments” Instagram began overrunning Smith’s feed with paid sports betting ads for apps and businesses that provided gambling services that were expressly illegal in the state of California.

“Meta’s advertising system had processed Plaintiff’s private search query about the illegality of gambling in California, identified it as a targeting signal for gambling advertisers, and delivered illegal gambling advertisements in direct response to a query about California gambling law. This real-time surveillance of Plaintiff’s private search behavior, and the weaponization of that data to serve illegal advertising, constitutes actual knowledge by Meta’s systems of California’s legal framework and deliberate disregard for that framework.”

– Joseph Allen v. Meta Platforms Inc. et al.

At the time, Allen states he was already fighting with Meta over a Gwin Sportsbook ad he accessed in 2025 that led to malware being placed on his computer, which cost him $975. He then lost another $68,000 in additional gambling losses.

The lawsuit indicates the stress of the situation and the fraud scheme caused Allen to suffer a heart attack, extreme emotional distress, severe financial damage and numerous severe panic attacks.

Smith presents claims of Violation of California Penal Code, Violation of CCPA/CPRA, intentional infliction of emotional distress, fraud and fraudulent concealment, negligence, and civil Racketeering Influenced and Corrupt Organizations Act (RICO). He is seeking nearly $800,000 in damages.

Sports Betting Lawsuits

Unlike Smith’s complaint, most sports betting lawsuits have been filed against DraftKings and FanDuel. It is expected that thousands of such sports betting lawsuits will be filed in the coming months and years by consumers nationwide who have suffered serious financial losses and disruption due to aggressive sportsbook promotions.

Sports betting addiction lawyers are currently investigating potential lawsuits nationwide, focusing on whether the apps intentionally foster compulsive gambling in order to profit from gamblers’ addictions. Platforms named in various sportsbook lawsuits and investigations include:

To find out whether you qualify for a sports betting lawsuit, submit information about your potential claim for an attorney to review. All cases are handled on a contingency fee basis, meaning you pay nothing unless a settlement is obtained in your case.

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