Indonesia Cracks Down on Payment Service Providers Facilitating Online Gambling

Indonesia Warns Payment Providers: Stop Supporting Online Gambling or Face License Revocation

In a decisive move to combat illegal online gambling, Indonesia’s Ministry of Communication and Information Technology (Kominfo) has issued a stern warning to Payment Service Providers (PJPs). This crackdown, aimed at cutting off financial support to online gambling operations, underscores the government’s commitment to enforcing its stringent gambling laws. With potential penalties including takedown sanctions and the revocation of operating licenses, Kominfo’s message is clear: compliance is not optional.

Kominfo’s Stand Against Online Gambling

Minister of Communication and Information Technology Budi Arie Setiadi has made it unequivocally clear that any PJP found facilitating transactions related to online gambling or other illegal activities will face severe consequences. Kominfo has already sent warning letters to 21 PJPs, each of which is associated with 42 registered Electronic Systems. These service providers are now under scrutiny, as the ministry enforces Government Regulation No. 71 of 2019 on Electronic System and Transaction Management.

“The Ministry of Communication and Information Technology sent warning letters to PJPs to ensure their services do not facilitate online gambling transactions,” Minister Setiadi emphasized during a press briefing at the Kominfo office in Central Jakarta.

Mandatory Internal Reviews and Audits

In response to the warnings, PJPs have been ordered to conduct a comprehensive and thorough internal review or audit of their Electronic System services. This audit aims to ensure that none of these services are being used to support online gambling or other illicit activities. The results of these audits must be submitted to Kominfo within seven working days of receiving the warning letter.

Failure to comply with this directive could result in serious administrative sanctions. “If the Ministry of Communication and Information Technology does not receive the review results within the 7-day deadline, the electronic payment service provider will face administrative sanctions according to the law,” Minister Setiadi warned.

Broader Implications for the Tech and Finance Sectors

This crackdown extends beyond just payment service providers. Earlier, Minister Setiadi called on all Network Access Providers (NAPs) in Indonesia to sever access to foreign internet lines that are suspected of supporting online gambling platforms. This reflects a comprehensive approach by the Indonesian government to dismantle the infrastructure supporting illegal gambling operations.

Indonesia’s stance on gambling is unambiguous; all forms of gambling are illegal under Indonesian law. President Joko Widodo has reinforced this position by declaring that no social aid will be provided to online gamblers, further highlighting the government’s zero-tolerance policy.

Indonesia’s latest measures to curb online gambling underscore the government’s firm commitment to upholding its laws and protecting its citizens from the harms associated with illegal gambling. The Kominfo’s proactive stance, targeting the financial lifelines of these illegal activities, sets a precedent for the stringent enforcement of regulations. Payment Service Providers operating in Indonesia must now ensure that their systems are free from any association with illegal gambling activities or face the risk of severe penalties, including the loss of their operating licenses. As the crackdown continues, the onus is on these providers to comply with the law and support the government’s efforts to maintain a legal and safe digital environment.