Introduction
In the dimly lit corners of Jakarta's bustling neighborhoods and under the neon glow of Manila's streets, a silent epidemic thrives—online gambling. Once relegated to back alleys and clandestine dens, gambling has found a new, pervasive platform in the digital age. In Indonesia, where Islamic principles strictly forbid such practices, the internet has become a gateway for millions to partake in illicit betting. The Philippines has taken a more lenient stance, so there has been a boom in legal online gambling. However, despite these differing policies, both nations face serious challenges regarding the regulation of these activities. This article examines the online gambling crisis in Indonesia and the Philippines through a comparative case study approach, drawing from academic research, government reports, and investigative journalism.
In doing so, the article aims to provide a comprehensive overview of how online gambling affects these two Southeast Asian societies and what lessons can be learned for future regulatory approaches.
How does Online Gambling Work?
Online gambling involves wagering money or goods on events with uncertain outcomes via the Internet, encompassing activities like sports betting and casino games. The Philippine Amusement and Gaming Corporation (PAGCOR) regulates the industry in the Philippines and oversees both land-based and online gambling operations. Conversely, online gambling is illegal in Indonesia, where authorities have intensified efforts to combat it. According to the Asia Gaming Brief, the online gambling industry in Southeast Asia is projected to grow to as much as $4.6 billion by 2026, driven by factors such as smartphone growth and digital payments (Moura, 2024).
Online Gambling in Indonesia
Indonesia strictly prohibits all forms of gambling, including online betting, under its Criminal Code and the 2008 Information and Electronic Transactions Law (Lewiandy et al., 2015). However, despite these regulations, online gambling has flourished, with reports indicating that around 8.8 million Indonesians participate in illegal online betting annually, generating an estimated Rp 900 trillion (US$55 billion) in illicit transactions (Asyidiqi, 2024). The anonymity and accessibility of digital platforms have made it difficult for authorities to control the industry, leading to an underground market that operates beyond legal oversight.
Case Study: The 2023 Surabaya Gambling Bust
In 2023, the streets of Surabaya bore witness to one of Indonesia’s most significant crackdowns on illegal online gambling. A nondescript call center, hidden behind layers of secrecy, turned out to be the nerve center of a transnational syndicate that had woven itself into the fabric of local communities (Naibaho et al., 2025). Its victims were everywhere—unemployed youth searching for an escape and low-income workers grasping at the illusion of easy money. When authorities finally moved in, they took down more than 40 people and seized over Rp 150 billion (USD $9.6 million) in illicit funds (Naibaho et al., 2025).
Despite the police’s success, they recognized that the fight was far from over. “We shut down one ring, and two more appear the next day,” admitted an Indonesian police official, underscoring the sheer scale of the industry’s resilience (Naibaho et al., 2025). The government’s strict ban has not eradicated the problem; instead, it has pushed gambling deeper into the shadows, making it harder to regulate and even harder to control.
The syndicates thrive on desperation, exploiting the economic instability of those already struggling to survive. For many, gambling starts as a quick fix—a promise of luck, a fleeting chance to break free from financial despair. But the house always wins. As long as poverty and digital access remain unchecked, the industry will not just endure—it will evolve, exploiting legal loopholes and targeting vulnerable individuals.
Broader Implications for Indonesia
The proliferation of online gambling in Indonesia has far-reaching implications. Economically, while some individuals may experience short-term gains, the long-term consequences often include significant financial hardship. Many players, particularly those from low-income backgrounds, become trapped in cycles of debt, often borrowing money from illegal lenders (Lewiandy et al., 2015). This economic burden extends to families, with household finances destabilized by gambling-related losses. Legally, the inability to effectively curb online gambling undermines the rule of law, eroding public trust in governmental institutions (Lewiandy et al., 2015). The adaptability and use of offshore servers make eradicating these organizations difficult to regulate and eliminate. Socially, gambling contradicts Indonesia’s Islamic moral values, which causes a rift amongst members of communities and contributes to a decrease in shared cultural values (Naibaho et al., 2025).
Online Gambling in the Philippines
Unlike Indonesia, the Philippines has embraced online gambling through its POGO industry, which was introduced in 2016 to regulate and tax offshore betting operators targeting foreign gamblers, primarily from China. Initially seen as an economic boon, the industry generates an estimated US$400 million annually in tax revenues and employs thousands of Filipino workers (Prasetyawati & Lamoste, 2021). However, it soon became associated with widespread criminal activities, including human trafficking, cyber fraud, and money laundering.
Case Study: The 2024 POGO Shutdown
In 2024, the Philippine government pulled the plug on an industry it had once championed. President Ferdinand Marcos Jr. ordered the complete shutdown of all Philippine Offshore Gaming Operators (POGOs), a drastic response to the rising tide of crime that had engulfed the sector (Fletcher, 2024). The final straw came in Pampanga, where authorities uncovered a human trafficking syndicate masquerading as an online gambling firm. Over 1,000 foreign workers, many of them lured by false promises, were found trapped in a web of forced labor and cyber fraud (Tabile, 2024).
The crackdown came at a cost. The POGO industry, once hailed as an economic windfall, had contributed nearly PHP 53 billion ($940 million) in government revenues at its peak (Philippines Offshore Gambling Operators (POGOs): Off-putting | FULCRUM, 2025). Now, thousands of Filipino workers face unemployment, and the country’s real estate market—heavily reliant on POGO tenants—stands on uncertain ground (Tabile, 2024). “It’s a necessary sacrifice,” a government official remarked (Bacelonia, 2025). “We cannot allow the Philippines to become a haven for criminal enterprises disguised as business.”
Yet, the shutdown only exposes a deeper reality: When gambling industries operate with unchecked influence, they become breeding grounds for exploitation. The void left by POGOs may be filled by underground operators, slipping further from regulatory reach. And as the government celebrates its crackdown, one question lingers: How do you truly shut down an industry built to adapt and thrive in the shadows?
Broader Implications for the Philippines
The shutdown of POGOs has resulted in significant economic consequences, with an estimated 23,000 Filipino workers losing their jobs and the government facing a sharp decline in tax revenues (Tabile, 2024). Additionally, the Philippines' relationship with China has been strained, as Chinese authorities have repeatedly raised concerns over POGO-related crimes, including fraud and human trafficking, which have victimized Chinese citizens (Beltran & Beltran, 2024). Reports indicate that POGO-linked crimes surged by 76% between 2019 and 2023, with cases involving illegal detention, torture, and cyber fraud (Prasetyawati & Lamoste, 2021). Domestically, the rise in human trafficking and financial scams has exposed the dangers of insufficient regulatory oversight. The government now faces the dual challenge of addressing unemployment among displaced workers and preventing the resurgence of illegal gambling operations, which could exploit gaps left by the closure of licensed POGOs (Philippines Offshore Gambling Operators (POGOs): Off-putting | FULCRUM, 2025)
What Now?
Despite taking contrasting approaches, both Indonesia and the Philippines struggle with the consequences of online gambling. Given these challenges, neither a total ban nor unchecked regulation appears sufficient. Indonesia could consider a targeted regulatory approach, legalizing and controlling certain gambling sectors while investing in digital enforcement tools to dismantle illegal networks. The Philippines, on the other hand, must strengthen oversight mechanisms, tighten anti-money laundering measures, and establish international cooperation to prevent transnational crime linked to gambling.
Beyond regulation, both nations should address the root causes—economic vulnerability and digital accessibility—through financial education programs and better public awareness campaigns on gambling addiction.
Conclusion
The cases of Indonesia and the Philippines highlight the complex realities of online gambling regulation. While Indonesia’s prohibition has driven gambling underground, the Philippines’ attempt at regulation has exposed its own risks. This study, based on case analysis and academic research, underscores the need for a balanced approach—one that integrates enforcement with social and economic safeguards. Future research should explore the deeper causes of gambling participation, the role of technology in illegal operations, and the effectiveness of alternative regulatory models. As digital gambling continues to evolve, governments must not only react but anticipate and adapt to its shifting landscape.
This article represents the views of contributors to STEAR's online digital publication,
and not those of STEAR, which takes no institutional positions.
References
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