Indonesia’s Minister Setiadi takes a firm stand to eradicate iGaming

Lea Hogg May 26, 2024

SiGMA news

Indonesia’s Minister Setiadi takes a firm stand to eradicate iGaming

Indonesia’s Communication and Informatics Minister, Budi Arie Setiadi, (photo above) announced that his ministry has blocked 1.9 million pieces of online gambling content since he took office on 17 July, 2023, through to 21 May, 2024.

The Ministry of Communication and Informatics has also requested the Financial Services Authority (OJK) and Bank Indonesia (BI) to block bank accounts and digital wallets associated with online gambling. As a result, 5,364 bank accounts have been proposed for blocking by the OJK, and 555 digital wallets by BI.

In a further step to eradicate online gambling, President Joko “Jokowi” Widodo directed the formation of a comprehensive task force. “The formation of the online gambling task force is a commitment from the government to systematically and measurably eradicate online gambling from upstream to downstream,” Setiadi stated.

The task force, expected to be established within one to two weeks, will be led by the Coordinating Minister for Political, Legal, and Security Affairs, Hadi Tjahjanto. Setiadi will head the prevention division, while National Police Chief Listyo Sigit Prabowo will lead the enforcement division.

Digital wallets associated with online gambling blocked

Setiadi also revealed that stern warnings and ultimatums were issued to various social media platforms, including Meta in October 2023 and X (formerly Twitter) in January 2024. These warnings resulted in Meta removing 1.65 million pieces of online gambling content and 450,000 related advertisements from August to October 2023.

The law governing electronic transactions and information, enforced in January, explicitly prohibits online gambling. It imposes severe penalties of up to 10 years imprisonment and fines of up to IDR 10 billion ($645,000) for operators found guilty of running gambling sites.

Now, let’s delve into the iGaming sector in Indonesia. The gaming market in Indonesia is the 16th largest in the world and the largest in Southeast Asia. At the end of 2021, sales accounted for 1.92 billion USD. The eSports sector in Southeast Asia is developing mainly on account of Indonesia, as 43% of the total number of players in the region are located in Indonesia.

Historically, many Indonesian developers created mobile games because they were more accessible, and making PC games or buying consoles in Indonesia was still relatively expensive². However, the mobile market turned out to be top-heavy, making it difficult for new mobile games to catch up. As a result, Indonesian developers eventually switched to PC and console games.

Despite the challenges, the future of Indonesia’s game development ecosystem looks promising, with potential for further growth and recognition in the international gaming market. The Indonesian government has recognized the video-game industry as one of the most promising sectors for attracting foreign investments.

In conclusion, while Indonesia is taking stringent measures to curb online gambling, its iGaming sector continues to thrive and shows promising potential for future growth. The government’s support and the country’s young, tech-savvy population are key drivers of this growth. However, the journey is not without challenges, and it will be interesting to see how the sector evolves in the face of these challenges.