Foreigner-only casino hubs considered under Indonesian proposal

In a potential move that could follow in the footsteps of Malaysia and the UAE, Indonesia has tabled the possibility of exploring a foreigner-only casino model.

The move appears to be gaining traction as the measure would help boost Indonesia’s tourism industry while also raising much-needed government tax revenues.

However, more importantly, it may also help to pacify those opposed to building casinos who fear the socio-economic problems associated with the industry.

Paramount among these concerns, as also witnessed in Thailand, is the potential of problematic gambling among communities and a potential rise in crime rates.

The proposal, backed by both academics and Indonesian lawmakers, suggests that casinos be restricted to designated economic zones such as Batam or Bali. Tailoring zonal legislation would provide officials with a legal workaround to the national gambling ban that currently exists.

STIE Ekuitas academic Vidya Ramadhan insists that in-person casinos should be off-limits to locals, particularly those living in low-income areas. The purpose of which could see Indonesia benefit from a new wave of casino-based tourism, while simultaneously reducing the potential risk of harmful gambling behaviours.

Drawing inspiration from neighbours Malaysia – where its Resorts World Genting earned US$2.33 billion in 2024 alone – given Indonesia’s huge budgetary deficit, an income stream of this size would be hard to turn away.

This isn’t the first time Indonesia has leaned on the gambling sector to raise taxable income, as Jakarta’s governor, Ali Sadikin, legalised gambling in the 1960s to fund infrastructure projects.

While these measures have since been revoked, they demonstrated the benefits of gambling-related tax revenues at the time.

The latest proposal has also gained further momentum following comments by MP Galih Kartasasmita, who insisted that if Islamic countries like the UAE can explore casinos, why shouldn’t Indonesia? He framed his argument around the proposal not being a religious or moral debate but more of a successfully proven economic strategy.

Indonesia hopes to emulate the success of Asian casino tourist hotspots like Macau and Malaysia to help fuel its much-needed economic growth.

However, the Indonesian government has been forced to proactively seek new ways to balance economic development with its existing moral, social, and legal statutes, which threaten to stifle the introduction of its casino bill.