Indonesia faces uphill battle to curb surge in online gambling websites

[JAKARTA] Online gambling in Indonesia is a problem that the government is determined to stamp out, but the scale and reach of these websites make it an uphill battle, observers said.

In the period from the start of 2018 to September this year, the authorities have shut down nearly 939,000 online gambling sites.

Budi Arie Setiadi, the new Minister of Communication and Information who took office on Jul 17, was quoted as telling CNN Indonesia that 42,622 online gambling sites were blocked in his first three weeks on the job.

Gambling is prohibited in Indonesia, the world’s most populous Muslim-majority country, with players and organisers facing hefty fines and jail time if caught and convicted.

Earlier this month, hackers took over the official YouTube account of Indonesia’s House of Representatives and used the platform to post a series of advertisements promoting online gambling.

The channel, which has more than 240,000 subscribers, contained two videos with thumbnails of an online gambling operator promoting slot machine games.

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In recent months, Indonesian authorities have clamped down on social media influencers and celebrities who actively promoted illegal investment platforms that were later found to be scams and akin to online gambling.

Among the trading instruments in the spotlight is binary options, a financial product that depends on the outcome of a “yes or no” proposition. Traders get paid if their binary option expires and yields a profit. This, however, has been derided by market watchers as gambling.

According to data from Indonesia’s Financial Transaction Reports and Analysis Center, an estimated US$5.2 billion was wagered illegally online in 2022, with the majority of the gamblers being millenials.

Indonesia – the largest economy in South-east Asia – has more than 200 million people with access to the Internet, roughly about 60 per cent of the population. As the number of users grew over the years, there has been a surge of gambling platforms that prey on unsuspecting victims.

Devie Rahmawati, a lecturer and researcher at the University of Indonesia, pointed to the Covid-19 pandemic’s role in causing the spike in online gambling in the last few years.

“The pandemic had a devastating impact on families, and it was the primary factor behind the increasing prevalence of online gambling,” she told The Business Times. “Online gambling (is) seen as an alternative avenue for people who need additional income during these challenging times.”

But when it comes to gambling, it’s rare that a punter can ever beat the house. Setiadi was quoted in a report in Kontan, a business and financial regular publication, saying that it is often the poor who end up as the biggest victims of online gambling.

“Imagine that for a day of slot gambling, (a person spends) 30,000 rupiah (S$2.66), in a month that is (about) 900,000 rupiah. The victims even include small children,” he said.

Rahmawati also noted that the pandemic – when people were cooped up at home – resulted in many developing an interest in experimenting with investment platforms for the first time.

Many of these platforms are illegal and are linked to gambling activities endorsed by celebrities and influencers. These sites have largely flourished in a regulatory grey area, she said.

“Unclear regulations regarding the endorsement of financial products and a low level of financial literacy in society have contributed to the growing popularity of illegal investment and online gambling,” she said.

The authorities said the prevalence of online gambling content remains a challenge that’s difficult to overcome, as it continues to infiltrate all sorts of platforms from social media to Internet messaging services.

Adi Vivid Agustiadi Bachtiar, the director for cybercrime at the National Police, said that the challenge of eradicating online gambling in Indonesia persists due to the continuous emergence of various types of websites or applications, despite previous attempts to cut off access to them.