Gambling in Indonesia: Prospects and Features

The discussions of the Indonesian gambling market have not ceased for several years. Officially, the authorities prohibit any casino activity, but in practice, the income of offshore gambling and sportsbook enterprises is constantly growing.

Experts of the Online Casino Market studio will tell you about the nuances of working in the entertainment niche, popular settlement methods, and rules for creating advertising campaigns.

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Key Facts about Indonesia

This is the largest island country in the world, the area of which is 1.9 million square kilometres. The capital of the state, Jakarta, is located in Java.

The jurisdiction is called the "locomotive" of Southeast Asia. All sectors of the economy are equally well developed here, including industry, agriculture, and services. Low inflation and constantly growing gold reserves make the region attractive for investors.

Features of the business climate:

• Indonesia's GDP is $3.3 trillion. At the end of 2022, this figure increased by 5.31%. This has become the highest value in the last decade. The quarantine cancelation and the strengthening of trade with neighbours (China, Australia, and Japan) are the main indicators of GDP growth.
• The region has the 7th largest economy in the world and is part of the Group of Eleven. This term was introduced by analysts from Goldman Sachs in the early 2010s. It defines a category of states with a steadily developing banking sector, industry, tourism, agriculture, and construction business.
• The local population is 277.7 million people. According to this indicator, the jurisdiction ranks first in Southeast Asia. Besides, it is the largest Muslim country in the world.
• 90% of residents use mobile communications daily. 60% of Indonesians go online from mobile devices, and another 35% use PCs or laptops. Inhabitants of the island of Java are the most advanced in terms of modern technology, while those who live in the remote province of North Kalimantan still do not have access to the Internet.

Features of Gambling Regulation

Indonesia is a secular state. About 80% of its citizens profess Islam. The strictness of sharia law plays a key role in the attitude towards the placement of bets.

All types of casino games are prohibited here, including online and offline areas. Even the lottery held by the national operator was closed due to protests from the Muslim community.

The main legislation that regulates the iGaming market in the country is the Indonesian Criminal Code.

Article No. 303 specifies the responsibility for non-compliance with the law:

• organisation of entertainment for money and lotteries (10 years of imprisonment);
• betting in illegal bookmakers’ offices and on virtual platforms (4 years in jail).

The Kominfo local regulator monitors compliance with the legislation. Its main task is to block offshore sites where residents play.

Despite the official ban, those who live in Indonesia actively place bids on foreign resources and local iGaming portals. In 2022 alone, the Ministry closed more than 80 thousand illegal resources and smartphone applications. Over the past 6 years (since 2018), the regulator has blocked about 900 thousand resources.

According to the results over the past year, Indonesia entered the top 5 countries with the largest number of downloaded VPNs and anonymisers. Local gamblers install applications that mask geolocations on their PCs or mobile gadgets, thanks to which they can easily spend their leisure time in foreign online casinos.

Entertainment Preferences of the Population

Indonesians are one of the most gambling nations in the world.

Digital portals, sportsbook websites, and mobile iGaming applications are extremely in-demand. This can be proven by the example of the Higgs Domino Island arcade. According to Google Play Store, the solution has been downloaded more than 50 million times, which is a record for the number of installations in the local market.

Indonesia is the birthplace of cockfighting. This type of competition is permitted by the Ministry of Communications and Informatics since it does not relate to the placement of bets. Most often, this pastime is organised at the resorts on the island of Bali to please tourists.

Popular Online Games

The most in-demand types of entertainment:

1. Slot machines. The audience prefers traditional 5-reel products, options with jackpots, and thematic offers. These are fruit-themed mixes, solutions dedicated to mythological heroes, etc.
2. Fantasy sports. Most often, customers choose EA SPORTS FIFA 23. This application became the most downloaded in 2023 according to Google Trends analytics.
3. Table games. Cards and roulette with live dealers are gradually replacing content with a built-in RNG. Clients like to play in real-time, watching the reaction of the dealer and opponents. Most bids are placed on live entertainment made in the oriental style. These are Qiu Qiu (a mixture of poker and dominoes), Sic Bo, as well as Dragon and Tiger.
4. Online lotteries. Malaysian Sports Toto is the most popular bingo in Indonesia. People can get access to it through offshore sites.

Betting Vertical

The love for this niche developed thanks to Indonesia's colonial past. Until 1950, the state was an overseas part of the Kingdom of the Netherlands, which led to the popularisation of many European disciplines.

Key sportsbook markets in the jurisdiction:

1. Football. This is the most in-demand and highly profitable sport in the country. Locals bet on the results of matches in the National Division, which regularly includes 7 teams. The audience also follows well-known international events: the FIFA World Cup, European leagues, etc.
2. Badminton. Indonesia has traditionally been strong in this area. It is known for its success in the pair category and is famous for the most passionate fans. Local athletes have received 8 medals in the Summer Olympics. The national team regularly wins the Thomas Cup, Uber Cup, and other international competitions.
3. Martial arts. Players enjoy betting on Thai boxing, judo, sambo, karate, and taekwondo. Pencak silat is extremely popular. It includes the elements of traditional martial arts and dancing to Indonesian traditional music.
4. Board games. Chess and mahjong are also among the favourites. These disciplines have the widest range of events and are well-covered by bookmakers.

Nuances of Attracting Internet Traffic

A typical local player is a man under the age of 28 with a good, stable income and a wide range of interests. Most often, this is a resident of a metropolis (Jakarta, Surabaya, Bandung, or Bekasi) who has already received higher education and found his first job.

The female audience makes up 40% of online traffic. Despite religious considerations, in Indonesia, women feel the freest in the Islamic world. Here, ladies can get an education, take a leadership position, and be more independent.

Main Communication Channels

Operators can attract the audience using the following tools:

1. Search engines. Google holds the lead, providing 70% of all visits to gaming sites. Customers also use Yandex, as well as such local services as Y2Mate and Ssyoutube.
2. Social networks. Indonesians spend time on Facebook, Instagram, WhatsApp, and Twitter. The average duration of daily sessions is 2 hours. The most popular online activity is watching videos. Players communicate with each other in messengers, read the news, listen to music, and, of course, place bets.
3. Local platforms. These are BeeTalk (a dating site from Singapore), Line (a Japanese application), MigMe (a platform for corporate communication/networking development), and other solutions.

Despite the policy of tightening, which is actively supported by the authorities, the island is included in the top 3 countries with the highest level of Internet coverage. For example, the same Twitter has been repeatedly blocked by the government, although the audience of this social platform is more than 22.3 million Indonesians.

Since 2021, a 5G broadband network has been operating in the jurisdiction. All leading communications providers (Telkomsel, Indosat (IOH), XL, and other well-known companies) have switched to it.

Features of Advertising Creatives

Rules for forming an effective marketing campaign:

1. Taking into account local traditions. Residents of the country do not like to flaunt their wealth. They prefer a modest life and respect the religions and customs of other people. The audience is attracted by slots with images of gold coins, national clothes, and animals. The frog and rooster are considered symbols of prosperity here.
2. Love for bright colours. The state's cultural heritage consists of folk music, dance, and paintings. Indonesians like mottled patterns with beautiful tints. The tones of the flag (white and red) and coat of arms (gold, green) can be used in the design of websites.
3. Attention to detail. Alcohol is prohibited in the region. Therefore, a picture of a mug of beer or a glass of martini will look out of place. Entrepreneurs should avoid slots with overly joyful images (such as club life or drinking alcohol). It is better to give preference to thematic solutions (dedicated to the topics about animals, nature, and holidays).
4. Localisation. The user interface should be translated into the country’s language and support the placement of bids in the national currency (rupees). It would also be good to add the Indonesian coefficient system to the bookmaker line. Its main difference is the presentation of quotes in the form of fractional values.

Popular Payment Solutions

The state has a well-developed banking sector and a large selection of alternative settlement methods.

Currently, the financial system is undergoing a massive transformation: most transactions are moving to the online space, and the share of cash transfers is rapidly declining.

Financial options used in the gambling industry:

1. Digital banking. Internet acquiring services are provided by PT Bank Negara Indonesia (Persero), CIMB Niaga, BTPN Jenius, OCBC Nyala, Permata, Mandiri, and many others. Each major commercial bank has its branded mobile application. With the help of such a product, it is possible to make fast and secure transactions, as well as accumulate bonuses and cashback.
2. Electronic wallets. In Indonesia, 4 international services have a local licence: Neteller, Skrill, ecoPayz, and MuchBetter. Players can create a wallet in any of them, having passed preliminary two-factor identification.
3. Transfers using credit and debit cards. The audience uses Visa and MasterCard. These 2 payment systems occupy 80% of the market. There are no restrictions on using borrowed funds.
4. Local financial products. Customers have great confidence in local settlement methods. These are OVO, GoPay, GrabPay, Boost, Touch ‘n Go, DANA, and other solutions for instant money transfers. They have a multi-currency environment. Deposits can be made in Indonesian rupees, US dollars, Japanese yen, etc.
5. Cryptocurrency. The government allows transactions with digital funds. This includes buying, selling, and much more. Almost 6% of residents regularly invest in ICO projects, and 10% have savings in cold and hot wallets.

Prospects for Legalising Gambling

The grey online casino and sportsbook market is actively developing despite government restrictions. Every year, the local treasury loses tens of millions of dollars that could be spent on social needs (healthcare, construction of educational institutions, etc.).

Analysts from PriceWaterhouseCoopers (PwC) predict that in the next 3 years, the entertainment industry in Southeast Asia will grow from $34 billion to $80 billion. The predominant share of income will come from the illegal Indonesian market, which is characterised by a high population density and active digitalisation of the economy.

The government is in no hurry to legalise games for money. On the contrary, it is introducing new measures to block offshore sites and advertising.

Budi Arie Setiadi, head of the Ministry of Communications and Information, said:

We will cooperate with mobile providers to combat illegal gambling. Our goal is to block sites related to this activity and publications within 24 hours from the moment of its detection.

The Main Things about the Online Casino Sector in Indonesia

In the country, this niche is still in the formation stage.

Key aspects that operators need to take into account:

• The government prohibits any form of gambling, including arcades, slot machines, and sports betting. Users play on offshore sites, bypassing the blocking thanks to VPN technologies.
• Themed slots, table entertainment, and online lotteries are the leaders in the field of the audience’s preferences. Clients like oriental-style entertainment and sportsbook options. Football, badminton, and martial arts are the most widely represented. These disciplines have an extremely variational betting line.
• It is possible to attract Internet traffic through search engines (Google, Yandex), social networks, and local instant messengers. Facebook and Instagram have the largest audience.
• When creating advertising creatives, it is worth focusing on local traditions and culture. Indonesians are famous for their love for bright colours and national themes.
• Popular settlement methods include digital banking, e-wallets, and local financial products. The country allows the use of cryptocurrency.

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