According to data from PASA, a global platform for getting rich, as of June 2024, the Indonesian Financial Services Authority had frozen 4,921 bank accounts and the BRI had frozen 1,049 accounts related to online gambling.
With the popularization of Internet technology and the rapid increase in the popularity of smartphones in Indonesia, online gambling has expanded rapidly around the world. Indonesia is also facing the problem of rampant online gambling.
In order to eradicate this problem, the Indonesian government has set up the Internet Gambling Eradication Task Force or Internet Gambling Task Force, which aims to cut off Internet gambling and eradicate it from upstream to downstream. The task force has pocketed 4,000 to 5,000 accounts active in online gambling transactions. These thousands of accounts were obtained through calculations conducted by the Financial Transaction Reports and Analysis Center.
The Indonesian Financial Services Authority directly froze 4,921 bank accounts. This number is based on data sent by the Ministry of Communications and Information. At the same time, in order to curb this phenomenon, BRI (Bank Rakyat Indonesia), one of Indonesia's largest state-owned banks, has frozen 1,049 online gambling-related accounts as of June 2024.
The author will analyze this move by the BRI and the working group and its impact on the Indonesian online gambling market.
Current state of Indonesia’s online gambling market
The growth of online gambling
Internet penetration:The increasing penetration of the Internet in Indonesia, especially the development of mobile Internet, has made online gambling common and easy to promote.
economic pressure:Amid economic pressures and high unemployment, many Indonesians have been drawn to online gambling in the hope of striking it rich.
The social and economic impact of online gambling
social influence
1. Family Relationship:Online gambling can lead to gambling addiction, which in turn can affect family relationships. Many gamblers may neglect their family responsibilities, which can even lead to family breakdown.
2. Rising Crime Rate:Gambling addicts may resort to crime, including theft and fraud, in order to obtain gambling funds.
3. Mental health issues:Gambling addiction can not only lead to financial problems, but also mental health issues such as anxiety, depression, and may even lead to suicide.
Economic impact
1. Illegal economic activities:Since online gambling is mostly illegal in Indonesia, it has spawned an underground economy from which the government cannot generate tax revenue.
2. Foreign exchange outflow:Many online gambling platforms are operated overseas, and Indonesian gamblers transfer large amounts of funds abroad, leading to foreign exchange outflows.
3. Decreased productivity:Gambling addiction can lead to personal and family financial difficulties, which in turn affects work efficiency and productivity.
Legal and Regulatory
Strict legal crackdown:Indonesian law strictly prohibits gambling activities, both offline and online. However, enforcement is difficult, especially because the cross-border nature of online gambling makes crackdowns more complicated.
Financial Supervision:Indonesia’s financial regulator has stepped up monitoring of gambling-related money flows to prevent funds from passing through the banking system for gambling transactions.
Government and bank actions
freeze the account
Account Screening:The Indonesian Financial Services Authority has frozen 4,921 bank accounts. BRI regularly searches BRI accounts used by criminals to store online gambling funds. By analyzing account transaction behavior, it identifies and freezes accounts related to online gambling. As of June 2024, 1,049 such accounts have been frozen.
Cooperating with the government:BRI’s actions are consistent with the government’s anti-gambling policy, which aims to cut off gambling funding chains through financial means.
Economic measures:Encourage the development of legal entertainment and leisure industries to provide the public with healthy entertainment options. Strengthen supervision of economic activities to reduce the problems of underground economy and capital outflow.
At the same time, the Indonesian Financial Services Authority (OJK) also requires banks to close accounts in the same Customer Identity File (CIF). The move is to maintain the stability of the financial services industry. OJK Committee Chairman Mahendra said the Financial Services Authority has directed banks to conduct verification, identification and customer due diligence, including tracking and analyzing lists of account holders proven to have conducted online gambling-related transactions.
OJK has also incorporated the list of customer accounts related to online gambling transactions into the Anti-Money Laundering and Terrorist Financing Prevention (SIGAP) Program Information System so that it can be accessed by all financial services institutions, narrowing the space for online gambling players and overcoming the challenges in the financial services sector. Information asymmetry.
Conclusion:
These actions demonstrate the Indonesian government's firm determination to combat online gambling. By blocking the gambling funding chain through financial means, the increasingly active online gambling activities in Indonesia have been dealt a blow to a certain extent, and the stability of the financial system and economic taxation has been maintained in disguise.
However, the complexity and prevalence of online gambling also have a significant impact on the subsequent implementation of this behavior, and continuous technological iteration and cross-departmental cooperation are still needed to deal with this situation.
