The Impact of Gambling on Indonesia's Economy and Household Consumption
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The Katadata Insight Center (KIC) states that the nominal contribution of online gambling transactions, or "judol", to the overall volume of Indonesia's financial transactions remains below 1%.
However, KIC observes its exponential growth rate indicates a potential for structural disruption that cannot be ignored.
"From an economic perspective, the growth of judol represents a form of unproductive consumption that tends not to generate multiplier effects on national output," KIC wrote in its report, quoted on Friday (8/8/2025).
Judol money is unproductive because the transfer of funds—deposits from players or the public—to gambling operators does not contribute to the economy because these funds are transferred to foreign channels, such as Cambodia.
Research by Algoresearch, processed by KIC, shows a negative impact of judol on the weakening of Indonesia's gross domestic product (GDP), with an estimated impact of 0% in 2017 to minus 3% in 2024.
This impact is even more pronounced on household consumption. It is estimated to have been 0% in 2017, becoming minus 1.7% in 2022, and collapsing to 5.9% in 2024.
In a broader context, KIC sees the consequences created by judol as multidimensional. This means it not only targets the economic sector but also social cohesion and institutional legitimacy.
In a social analysis, KIC assesses that an increase in judol prevalence correlates with the emergence of psychosocial pressures or encourages criminal acts and family conflicts, including an increase in divorce cases and domestic violence.
From an institutional perspective, public perception of weak law enforcement in handling cybercrime affects trust in state institutions, both law enforcement agencies and financial regulators.
The complete KIC policy paper, Breaking the Online Gambling Chain from Upstream to Downstream: The Role and Challenges of the Digital & Financial Sector in Indonesia, can be downloaded here.
(Read: Cash Flow and Transaction Volume History of Judol in Indonesia)
"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."
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