Indonesia Debates Casino Legalisation Amidst State Revenue Concerns

The discourse surrounding the legalisation of casinos in Indonesia, raised by Member of Commission XI of the House of Representatives, Galih Kartasasmita, has sparked a heated debate. Some parties have voiced their support, citing rampant online gambling and the country’s substantial state budget deficit.

At the time, Kartasasmita proposed that Indonesia follow the example of the United Arab Emirates, which operates casinos under the pretext of generating additional non-tax state revenue.

However, a member of the Jakarta Regional House of Representatives, Lukmanul Hakim, firmly rejected the idea of opening casinos as a means of boosting state revenue. He dismissed the assumption that legalising casinos in Indonesia could curb the spread of online gambling.

“I firmly state that I reject casinos to increase state revenue, in the form of Non-Tax State Revenue or as an entertainment tax, which is the right of the region. Indeed, in a country that is so rich, are there no other sources of income that can be explored? Can the pattern of intensification and extensification of halal income no longer be done?” remarked Hakim in an official statement on Wednesday, the 14th of May.

He also added, “There are still many opportunities that can be utilised. No need to use casinos or legalise gambling.”

On the other hand, international relations observer Hikmahanto Juwana believes the proposal is not without merit. He, furthermore, supports the legalisation of land-based casinos under state control, noting that this potential legalisation should be accompanied by continued efforts to eradicate online gambling, which has caused trillions of Rupiah belonging to Indonesians to flow abroad.

“[Casinos could take] a place on an island or a certain place – because the money turnover is very large and we can control it more than they operate in Cambodia and Myanmar,” remarked Juwana to the press on Tuesday, the 20th of May.

Juwana cited the example of Genting Malaysia Berhad, which operates Malaysia’s only legal casino. In its annual report, Resorts World Genting recorded revenues of RM10.91 billion in 2024, equivalent to Rp37.09 trillion.

An academic from STIE Ekuitas, Vidya Ramadhan, also expressed his support for the legalisation of casinos. He suggested that one possible approach could be to allow casinos to operate exclusively for foreign nationals while prohibiting Indonesian citizens from participating.

“For example, a casino is opened with a Special Economic Zone in an area like Bali or Batam. The state could also collect taxes from casino gambling transactions on condition that there is direct supervision,” opined Ramadhan on Tuesday as well.

Indonesia once legalised gambling, particularly in Jakarta, during the tenure of Ali Sadikin as the Governor of DKI Jakarta from 1966 to 1977. At a time when the development budget was severely limited, he legalised gambling activities such as lotteries and casinos to support the capital’s development — although even then, the move was met with both support and opposition.