Gambling and online casinos in Indonesia

Indonesia is the largest Muslim country in the world where gambling is banned in all forms.

The ban is enshrined both in criminal law and in Islamic norms (sharia) in force in most provinces.

Even so, gambling in Indonesia is thriving in the shadows, especially in the online segment, where offshore casinos and crypto platforms are shaping a multibillion-dollar shadow market.

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Legislative framework

Gambling in the country is regulated and simultaneously prohibited by a number of laws:

1. Criminal Code of Indonesia (KUHP) - Article 303 prohibits the organization, participation and advertising of gambling.

2. Law No. 7/1974 "On Gambling Control" - completely prohibits all forms of betting and lotteries.

3. Sharia Law (in Aceh and partly in other regions) - provides for corporal punishment for gambling (up to 40 strokes with a stick).

4. Electronic Information and Transactions Law (ITE Law, 2008) - prohibits online gambling and provides for blocking sites.

Main provisions:

• organizing and participating in gambling is a crime;
• fines up to IDR 10 billion (~ $650,000) and imprisonment up to 10 years;
• Muslims are also punished under Sharia;
• online gambling and casino advertising are prohibited without exception;
• only social lotteries and charity draws without cash prizes are allowed.

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Historical context

Until the 1970s, gambling existed legally in Indonesia, especially on the islands of Java and Bali.

In 1974, the government, under pressure from religious circles and spiritual leaders, introduced a complete ban.

However, over time, the underground market has only grown.

Today, Indonesia is considered one of the largest illegal gambling markets in the world, comparable in turnover to Malaysia and Thailand.

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Online gambling

Online gambling has become an alternative to land casinos for Indonesians, which are not in the country.

Players massively use offshore platforms registered in the Philippines, Cambodia and Curaçao.

Real situation:

• More than 17 million citizens (≈6% of the population) regularly make online bets;
• Popular sites: W88, M88, 1xBet, BK8, Fun88, Parimatch;
• Payment takes place through cryptocurrencies (USDT, BTC, TRX) and P2P services;
• VPN and Telegram bots are used to bypass locks;
• Illegal platforms are advertised through Instagram, TikTok and local streams.

In 2023, the government blocked more than 1.5 million sites related to online gambling, but new ones appear daily.

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Fighting illegal operators

Control is performed by:

• Ministry of Communication and Information Technology (Kominfo) - responsible for blocking sites;
• National Police (Polri) - harassing operators and players;
• Financial Services Authority (OJK) - controls bank transfers and e-wallets.

Control measures:

• weekly blocking of hundreds of domains and Telegram channels;
• ban on the use of keywords "casino," "slot," "bet" in Indonesian domains;
• monitoring of bank transactions related to excitement;
• confiscation of the property of the organizers.

️ In 2024, police arrested more than 7,000 people, including operators of illegal online casinos.

Among them were public personalities - streamers, bloggers and former officials.

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Cryptocurrencies and grey market

Due to banking control, players are increasingly switching to cryptocurrencies.

USDT, BTC and Binance Smart Chain (BSC) are used for transfers to offshore casinos.

Many transactions go through P2P platforms and Telegram groups, making them virtually untraceable.

However, from 2023, authorities began working with Binance and TRON to track gambling-related wallets.

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Social and religious aspect

Indonesia is a country of 270 million inhabitants, of which about 87% are Muslim.

Gambling here is seen not just as an offense, but as a sin and social degradation.

In the province of Aceh, where Sharia operates, people are publicly flogged with sticks for participating in gambling.

Similar measures are approved by local religious councils, which believe that "play destroys the soul and family."

Nevertheless, interest in gambling does not disappear - it simply went into the digital underground.

For non-Muslims (mainly Chinese communities in Bali and Java), excitement remains part of the cultural tradition.

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Economic effect (shadow)

Although the state does not receive taxes from gambling, the shadow market is estimated at $8-10 billion per year.

This money circulates outside the official economy, which causes alarm among the authorities and the Central Bank.

Asian Gaming Brief (2024) estimates:

• about 65% of online gambling traffic from Indonesia goes to sites with a Philippine license;
• budget losses are estimated at $500 million per year due to lack of taxation;
• more than 3,000 illegal online groups operate in the country.

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Taxation and licensing

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Challenges and challenges

1. Unsuccessful blocking - offshore sites instantly appear under new domains.

2. The growth of cryptogembling is the translation of games into decentralized ecosystems.

3. Cyber ​ ​ fraud and ludomania - especially among young people.

4. Difficulties of financial monitoring - banks do not have time to filter suspicious transactions.

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Prospects

Despite the official ban, the Indonesian government began discussing the introduction of licenses for foreign operators aimed at tourists and non-Muslims (for example, in Bali).

Such a model could replicate the experience of Singapore and Macau, keeping the Muslim ban in place but allowing controlled gambling tourism.

Potential directions of development:

• the creation of "special tourist areas" where casinos are allowed;
• introduction of state monitoring of crypto payments;
• cooperation with international regulators (PAGCOR, MGA, Curacao).

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Indonesia is a country of absolute prohibition of gambling, but also the largest shadow market for iGaming in the region.

Officially, casinos and betting are illegal here, but in reality, millions of players use offshore sites every day.