Online gambling is a scam, warns Indonesia government in bid to curb the vice

JAKARTA - Around 2.7 million Indonesians gamble online regularly, with fund circulation of roughly 327 trillion rupiah (S$27.5 billion) in 2023 prompting a worried government to try to eradicate the vice by calling it a scam.

In its fight against the promoters of gambling sites, the Ministry of Communications and Informatics took down more than 800,000 such websites in the second half of 2023 – the same number as the gambling websites that were taken down in the previous five years.

But new gambling sites have popped up just as quickly, with new names and web addresses. The government has been unable to block them as the computer servers of these sites are mostly located overseas, including in the Philippines and Cambodia, officials said.

The fund circulation, according to the government, refers to the amount of money gamblers spent and lost as well as winnings.

“Nobody could win by betting their money against a machine that is designed to always be in profit. We are doing public campaigns to convey this message,” Communications and Information Minister Budi Arie Setiadi said in a text-message reply to The Straits Times on May 13.  

The Indonesian government is now seeking Interpol assistance and is keen to have discussions with the authorities of its two Asean neighbours to help shut down the online sites.

Making matters worse, many gamblers are going into debt by taking loans with high interest rates from popular online lending platforms, known locally as pinjol, which typically approve loans within minutes. 

The government estimates that some 78 per cent of the 2.7 million gamblers, out of the country’s total population of 280 million, are young people, with many aged between 17 and 20 and from low-income families.

Indonesian law stipulates gambling is a criminal offence punishable by a jail term. Anyone implicated in online gambling faces a maximum of six years’ jail and a fine of up to one billion rupiah.

But the government wants to educate people against the vice, besides using legal means to stop or punish them.

Officials want the public to know that online gambling is like a scam, enticing people by using algorithms that let players win in the beginning. When they become addicted, the more they play, the more they lose.

But once they are sucked in, many people cannot bring themselves to stop until they run out of money and can no longer get a loan.

One such gambler was Mr Nofrianto, a 32-year-old resident of Lampung province in Sumatra, who said online gambling had cost him his house and two cars.  

“At first, I only wanted to try it out with 1.5 million rupiah and managed to win a total of 31 million rupiah. This was the start of me getting trapped,” Mr Nofrianto, who uses only one name, told Jakarta-based news portal Okezone in October 2023.

The father of two children, who works at an oil and gas company, continuously topped up his cash on a gambling website to try to recoup his losses. But he kept losing more money.  

In late April, Kominfo’s director-general for public information Usman Kasong said that President Joko Widodo is committed to resolving this gambling problem, with various ministries and agencies roped in to combat the online menace that has reached an alarming level.  

“Kominfo cannot take down (websites operating from) servers located overseas, while the OJK (Financial Services Authority) cannot block accounts with banks overseas,” said Mr Usman, adding that Indonesia will try to do this via government-to-government cooperation.

However, the OJK has the authority to order any bank to suspend or block a bank account being used for crime. In the last three months of 2023, it ordered private banks to block 4,000 accounts implicated in online gambling.  

Under the plan, Indonesia’s Financial Transaction Reports and Analysis Centre will trace the money trail of everyone implicated in the online gambling scourge, while the police will conduct investigations and make arrests.

Others, including private banks such as Bank Central Asia, the country’s lender with the largest value of savings accounts, and Bank Jago, the largest digital bank, are also doing their part.  

“We never facilitate online gambling in any form and will block any account used for online gambling based on the existing regulations,” said Ms Hera F. Haryn, a Bank Central Asia spokeswoman.

Bank Jago chief executive Arief Harris Tandjung said online gambling is a concern faced not only by the regulator but also by the banking industry. 

“Accounts with unusual behaviour such as those that had thousands of transfers a month... would go into our screening. We regularly monitor and request explanation when transactions get suspicious,” said Mr Arief.  

He added: “We will block the account as soon as possible if it is found to be linked to online gambling.”