Is Gambling Prohibited in Indonesia? A Closer Look at the Legal and Cultural Reality

For Japanese and foreign companies operating in or planning to enter Indonesia, understanding the country’s legal framework and cultural values is essential. Among the most strictly regulated areas is gambling , which is prohibited due to complex religious, historical, and social factors. However, with the rise of online gambling, new challenges have emerged, and companies that operate without proper understanding of local laws often find themselves entangled in legal issues.

In this article, we provide a comprehensive explanation of Indonesia’s gambling ban , its legal regulations, enforcement practices, and the implications for businesses.

Background and History of Gambling Prohibition in Indonesia

1. Religious Background: Gambling Prohibition in Islam

The primary reason for the gambling ban in Indonesia is rooted in Islamic teachings .

In Islam, gambling (known as “Maisir” in Arabic) is considered haram (prohibited).
The Quran explicitly refers to gambling as “the work of the devil” and urges believers to avoid it (Quran, Surah Al-Ma’idah 5:90–91). Alongside alcohol and divination, gambling is seen as a major societal threat.

Indonesia is home to the world’s largest Muslim population (approximately 87% of the population), and Islamic values strongly influence national laws and societal norms. As a result, the religious stance against gambling has been deeply embedded in Indonesia’s legal system.

2. Historical Context: From Colonial Era to Post-Independence

Colonial Era (Dutch Rule)

During the Dutch colonial period, certain forms of gambling were legal and often associated with local festivals or events. Activities such as cockfighting (sabungan ayam) and lotteries (roto) were sometimes accepted as entertainment. However, concerns over wealth inequality and social harm were already present.

Post-Independence to Suharto Era (1967–1998)

After independence, gambling such as horse racing, sports betting, and state-run lotteries (Sumbangan Dana Sosial Berhadiah / SDSB) were occasionally permitted. In the 1980s and early 1990s, the government even used SDSB as a source of social welfare funding.

Turning Point: Abolition of SDSB in 1993

In 1993, under pressure from Islamic leaders and religious parties, the government abolished SDSB. Since then, any form of state-sanctioned gambling has been strictly rejected, and gambling has remained illegal nationwide.

3. Social and Cultural Factors

Gambling as a Cause of Financial Ruin and Family Breakdown

Gambling is widely viewed as a cause of family disintegration and poverty , especially among lower-income groups. Cases of debt, domestic violence, and marital disputes linked to gambling have contributed to its strong negative image.

Inconsistent with Moral Education

Indonesian education and religious teachings emphasize values such as honesty, hard work, and self-restraint . Gambling, which relies on chance, is often seen as unethical and socially disruptive .

4. Political Factors: Influence of Islamic Parties and Conservative Sentiment

Despite being a secular democracy, Indonesia’s political landscape requires sensitivity to religious sentiments. In local elections and presidential contests, Islamic groups and conservative voters often demand strict anti-gambling policies. As a result, governments have used the prohibition of gambling as a way to demonstrate moral authority and gain public trust.

5. Regional Differences: Aceh and Other Areas

While Indonesia is a unitary state, some regions have special legal status. The province of Aceh , for example, enforces Sharia Law (Islamic law) . In Aceh, gambling is considered a serious crime and can result in caning or long-term imprisonment , far stricter than in other parts of the country.

 

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Enforcement of Gambling Laws and Its Impact

1. Explosive Growth of Online Gambling and Government Response

In recent years, online gambling has become a major social issue in Indonesia.

According to a 2023 government report, there were approximately 168 million gambling-related financial transactions , with an estimated total value of IDR 327 trillion (about USD 20 billion) (source: PPATK).

Gambling sites often use foreign servers and reach users through social media, WhatsApp, and Telegram , with cryptocurrency and e-wallets making tracking difficult.

2. Key Enforcement Agencies and Their Activities

Several government agencies work together to combat gambling:

Kominfo (Ministry of Communication and Informatics)

• Responsible for detecting and blocking illegal gambling websites.
• In 2023 alone, over 10,000 gambling-related websites were blocked.

PPATK (Financial Transaction Report and Analysis Center)

• Monitors and analyzes suspicious financial transactions.
• In 2023, over 2,000 bank accounts linked to online gambling were frozen.
• Works with OJK (Financial Services Authority) and the police to prevent money laundering.

Police (Polri)

• Handles arrests and investigations.
• Increased enforcement in Java, Sumatra, and Batam, with several foreign operators arrested.

3. Enforcement Outcomes and Challenges

Outcomes

• Increasing number of blocked sites has raised public awareness.
• Financial transparency efforts have forced some major gambling sites to shut down.
• In 2024, the government officially established the Online Gambling Eradication Task Force (Komite Pemberantasan Perjudian Online) .

Challenges

• Use of foreign servers and VPNs makes enforcement difficult.
• Gambling operators use proxy bank accounts and e-wallets to launder money.
• Social media ads continue to attract new users, especially among low-income groups and students.

4. Social Impact: Families, Education, and Youth

Rising Gambling Addiction

• Police reports indicate a growing number of youth falling into debt due to online gambling, leading to criminal activity.
• Gambling is often described as a “silent destroyer of families” , causing domestic violence and marital disputes.

Involvement of Young People

• According to PPATK, children as young as 10 years old have accessed gambling apps through their parents’ phones.
• High school and university students are increasingly lured by promises of “side income”, prompting urgent educational responses.

5. Economic and Financial Sector Impact

Stricter Regulation of Banks and Fintechs

• OJK (Financial Services Authority) has tightened monitoring of e-wallets and QRIS transactions .
• Enhanced KYC (Know Your Customer) requirements have increased operational costs for fintech companies.

Legal Risks for Businesses and Marketers

• Affiliate marketing that promotes gambling has led to legal actions.
• Even casual use of terms like “prize,” “winner,” or “spin-to-win” in promotional campaigns can trigger investigations or social media account suspensions.

6. Future Government Policies and New Measures

The Indonesian government has declared online gambling as a “national enemy” and is implementing stricter measures:

Creation of a National Task Force (2024)

• Involves Kominfo, PPATK, police, education, and religious ministries.
• Plans to regulate online advertising and social media platforms.

Education and Awareness Campaigns

• Strengthening awareness in schools and mosques.
• Launch of a public reporting app (Aduan Perjudian Online ) to build a community-based surveillance network.

Impact of Gambling Ban on Business and Key Considerations

1. Importance of Understanding Gambling Regulations in Business

Indonesia is the fourth-largest population in the world , making it an attractive market for foreign companies. However, due to the deep connection between religion, culture, and law, understanding gambling regulations is crucial.

Gambling is not just illegal—it is seen as immoral and socially harmful , which can severely damage a company’s reputation and brand image.

2. Specific Business Impacts and Risk Areas

(1) Online Services and App Development

• Social games, gacha mechanics, or loot boxes may be viewed as gambling if they involve:
  • Random rewards
  • Monetary or valuable item prizes
  • Probability-based systems

Prevention Measures:

• Clearly disclose gacha odds.
• Allow gacha only with non-monetary currency .
• Define clear terms of use stating that the system is not gambling .

(2) Marketing and Campaigns

• Using terms like “win,” “lottery,” “prize,” “spin,” or “cashback” in advertising can lead to:
  • Legal violations
  • Social media account suspensions
  • Public backlash

Prevention Measures:

• Partner with local social media agencies for language and cultural review .
• Replace risky terms with “reward” , “special gift” , or “exclusive offer” .

(3) Financial and Fintech Businesses

• Platforms such as e-wallets, QRIS payments, or online payment systems must monitor and prevent gambling-related transactions.

Prevention Measures:

• Monitor keywords like “judi” (gambling), “taruhan” (betting), “slot”, or “togel” (lottery) .
• Establish clear procedures for monitoring and freezing suspicious accounts.

(4) Entertainment and Amusement Industry

• Offering coin-operated prize games, tip systems, or prize redemption machines in arcades, karaoke bars, or restaurants may be seen as gambling.

Prevention Measures:

• Ensure that prizes have zero or negligible cash value (e.g.,纪念品 only).
• Never implement on-site cash redemption systems .

(5) Internal Compliance and Employee Education

• Even employees’ personal gambling activities can harm a company’s reputation.
• Since online gambling is accessible via smartphones, companies must implement employee training and internal compliance policies .

Summary

In Indonesia, all forms of gambling are strictly prohibited under Islamic law and national legislation. Online gambling is no exception, and the government has intensified enforcement through website blocking, financial monitoring, and criminal prosecution.

Gambling is not only illegal but also socially condemned, making it a high-risk area for businesses . Companies must ensure that their product design, marketing, and payment systems avoid any gambling-related elements and align with local laws and cultural values.

For digital and entertainment businesses, ignorance of these laws can lead to serious consequences. Therefore, accurate information gathering and legal preparation are essential for successful market entry.

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Glossary of Terms Used in This Article

• KUHP (Kitab Undang-Undang Hukum Pidana): Indonesia’s criminal code, which prohibits gambling and sets penalties.
• PPATK (Pusat Pelaporan dan Analisis Transaksi Keuangan): Indonesia’s financial transaction monitoring agency, responsible for tracking suspicious gambling-related transactions.
• Kominfo (Kementerian Komunikasi dan Informatika): The Indonesian Ministry of Communication and Information Technology, responsible for monitoring and blocking illegal gambling websites.
• Sharia Law: Islamic law, formally applied in Aceh, where gambling can result in corporal punishment.
• SDSB (Sumbangan Dana Sosial Berhadiah): A state-run lottery system that was abolished in 1993 due to opposition from Islamic groups.
• ITE Law (Undang-Undang Informasi dan Transaksi Elektronik): Indonesia’s electronic information and transactions law, used to regulate online gambling.
• KYC (Know Your Customer): Customer verification procedures used by financial institutions.
• AML (Anti-Money Laundering): Measures to prevent illicit financial transactions, including those linked to gambling.

FAQ (Frequently Asked Questions)

Q1. Is all gambling illegal in Indonesia?
A1. Yes. All forms of gambling—online or offline—are illegal under Indonesian law if they involve betting money or goods.

Q2. Is private gambling among friends also illegal?
A2. Yes. Even private gambling involving money is considered illegal. Enforcement may vary, but legal risk exists.

Q3. Can game apps with gacha or loot box mechanics face legal issues?
A3. Yes. If gacha involves real money and random rewards, it may be classified as gambling. Careful design and clear legal disclaimers are essential.

Q4. Can a company avoid Indonesian law by hosting servers overseas?
A4. No. If the service is accessible to Indonesian users, it falls under local jurisdiction and may be blocked or face legal action.

Q5. Are banks or fintech companies liable for gambling-related transactions?
A5. Yes. Allowing gambling-related transactions may be considered a violation of KYC and AML regulations, leading to fines or operational suspensions.

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