Indonesia Cracks Down on Payment Providers Linked to Online Gambling

The Indonesian government has announced it will take decisive action against digital payment service providers engaging with online gambling operators. This move is part of an escalating campaign by the country’s authorities to combat the growing prevalence of illegal online gambling activities. Indonesia hopes that limiting payment options will reduce traffic to black market sites, but such entities have proven quite resilient.

Limiting Payment Options Should Impact Illegal Operators

On Saturday, Indonesia’s Minister of Communication and Information Technology, Budi Arie Setiadi, announced that his ministry had issued warnings to 21 digital payment providers operating 42 applications. The warnings came after the ministry identified evidence suggesting that these applications were frequently used to process payments for gambling-related activities.

The ministry has instructed the service providers to conduct in-depth internal audits concerning their payment systems and to submit the results within seven working days. Budi Arie Setiadi emphasized the seriousness of the situation, warning that failure to comply could result in administrative action against offenders, although he did not specify what this might entail. 

If their audit reports are not submitted within seven days, they will be subject to administrative sanctions.

Budi Arie Setiadi, Indonesia Minister of Communication and Information Technology

Unlike some of the Indonesian government’s previous anti-gambling measures, cracking down on payment providers could have a noticeable impact on black market operators. While funding options like cryptocurrencies will remain unaffected, this move represents a significant step forward. Limiting payment options will make it substantially more difficult for the average user to engage with illegal platforms, hopefully causing significant disruptions.

Indonesia Remains Committed to Its Anti-gambling Stance

This latest crackdown is part of The Ministry of Communication and Information Technology’s campaign against online gambling, which is illegal under Indonesian law. April saw President Joko Widodo cement the government’s commitment by signing a decree to establish a specialized task force to take decisive action against those involved in the online gambling ecosystem.

The Financial Transaction Reports and Analysis Center (PPATK) has been instrumental in this crackdown, recently announcing that thousands of bank accounts related to online gambling have been blocked, with Rp600 trillion ($36.39 billion) worth of assets frozen. These efforts reflect the scale of the challenge that the Indonesian authorities are confronting as they strive to curb the economic and social impact of illegal gambling.

According to the latest statistics from the Indonesian government, nearly 3 million of its citizens have gambled online over the last year, spending an estimated $20 billion on such illegal activities—about 1.5% of the country’s GDP. With continued enforcement and cooperation from financial institutions, Indonesia hopes to significantly reduce this sum and stem the capital outflow it represents.