Because that makes them money. Next question.

Because they're blood soaked assholes who would be facing very uncomfortable consequences if there was justice in the world.

Because the US refuses to regulate tech

I have personalized ads turned of in YouTube and it seems half the ads are for gambling as of late.

Because Google's corporate philosophy is "Anything for a buck" which is of course quite different from the "Dont Be Evil" they started with...

Why wouldn't they?

It's not like they face any consequences for being accessory to fraud. Laws are for poor people.

Before I put adblockers on everything, I was served an ad for a stupid mobile shooter game, either on YouTube or Facebook, that started with a real life hunter shooting a coyote in the neck, which made it cry out in pain and tumble down a hill.

Now as a matter of sanity, I block all ads. If they can't keep crap like that from being advertised, then fuck off.

Growing up you’re told “If it don’t make dollars, it don’t make sense” and I think that sums up the answer to this question.

#1 money/greed
#2 ineffective government

Because like all ad companies, Google gives way less of a shit if the ads are malicious than they do there being lots of ads displayed.

Money. Criminals and immoral people pay good money to show these ads. At least for Facebook, a court case regarding identity fraud has established that they knew quite well which ads were fishy, so they just charged those advertisers more. If I remember correctly, that amounted to about 10% of Facebook's revenue. It will be a similar case for Google, I assume. Sketchy ads pay too well to remove all of them and laws make it so the platform is only liable if they don't take it down after receiving notice of every single sketchy ad. Google, Facebook, and the others are all well near monopoly and built deep moats, so they don't really have to fear losing customers, because there's no simple alternative.

Huh? Not for me. I kicked the big G out with DNS.