Tuesday, August 16, 2022

Untapped Indonesia

While Indonesia is not expected to open up its domestic gaming industry in the foreseeable future, the country’s residents still have a role to play and its wealthier citizens are an increasingly important customer segment for Asia’s casinos.

The country has a population of 242 million, making it the world’s fourth most populous nation, and a rapidly expanding middle class.

Fervently held religious beliefs against gambling among the overwhelmingly Muslim population and a government determined to punish in a very public way anyone caught gambling would seem to rule out gambling at home.

However, as in China and India, there is a strong propensity to gamble. The two areas of Indonesia gambling activity are online gaming and overseas visits by wealthier Indonesians to casinos in south-east Asian destinations like Macau and particularly Singapore.

“Indonesia is a very interesting market for sure. Many people do not know it but India and Indonesia have some of the highest numbers of online Poker players in the world,” says Steve J Karoul, president and CEO Euro-Asia Consulting.

Steve Galloway, managing partner, Global Market Advisors, commented, “The Indonesian gambler is an important market segment for casinos in Asia, particularly those in Singapore due to the proximity, ease of access, and similarities in culture. The increasing levels of wealth among a greater population of more than one quarter of a billion.”

Go online and type in the words Indonesia and gambling and there is a high chance that the first sites in the search will be comprehensive and user-friendly guides to intranet-based gaming.

Almost universally they offer betting accounts in Indonesian Rupiah and an easy-to-use deposit method. Asia-based dafabet.com offer an initial match of Rp. 750,000 to customers and the ability to make instant deposits from players’ bank accounts. European operations like 188bet and bet365 have offered new players cash bonuses that are twice as high as their Asian counterparts – up to $200 – which is a large incentive for the profile they’re aiming at.

In 2012 Indonesia’s Ministry of Communications announced it would block Indonesian nationals from accessing online gaming sites. However, online sites offer plenty of helpful advice about setting up overseas payment systems. European bookies also provide IT platforms like EntroPay to facilitate deposits and withdrawals from customers’ betting accounts using a virtual credit card.

Unless the Indonesian authorities divert unrealistic sums of money to build anti-online gambling structures it will continue to flourish quietly. No operator discloses what they earn from Indonesia’s online gamblers. But it will continue to operate under the radar; as one site says: “Online betting will happen on a large scale in Indonesia even if this article never appeared on our website.”

More Indonesians are traveling, though with a slowing economy and a relatively weak currency relative to its neighbors, much growth has so far been at home. Research by the Oxford Business Group says Indonesians made 251 million domestic trips in 2014, according to the Ministry of Tourism (MoT), and that number is expected to rise to 254 million trips in 2015. By 2019 domestic tourist movements are forecast to reach 275 million.

The World Travel and Tourism Council says domestic travel spending accounted for more than three-quarters of all travel spending in 2013. It estimates domestic travel spending reached $33.68 billion in 2014. Over the next decade it forecasts growth of 5.3 percent a year to reach $55.81 billion.

To be classed as a middle-income earner in Indonesia you need an annual income of US$3,500. There was an increase of 40 percent in the number of Indonesians joining the middle class in the first decade of this century, but is clear that even this rise in incomes doesn’t yet leave a lot of disposable income for overseas travel and accommodation.

So the Indonesians who gamble in casinos outside the country will inevitably have significantly higher incomes. Steve Karoul says: “Indonesians are very good players with many very rich and big players who often play in Singapore, Macau and on some of the gaming cruise ships in Asia.  Where this market will end up in the future will depend primarily upon marketing. The trust and relationships the marketers create are critical,” he adds.

Steve Galloway adds: “Like most of Asia, Indonesians have demonstrated a strong proclivity to gamble, despite having poor access to casinos. Being primarily a Muslim country, it is unlikely that the construction of state authorized casinos will happen anytime soon. As such, the population will continue to be of interest to casinos in other Asian countries.”

The unequivocal domestic laws against gambling and Islam’s moral condemnation also means that Indonesian players gambling overseas need to be treated with discretion and sensitivity until – or if – there is a change in attitudes.

As Steve Galloway concludes: “It is very difficult for casinos to reach out to customers as they are not allowed to market to customers directly, or connect with them in any fashion with regards to a casino or casino resort while the player is in Indonesia.  “While it is likely that smaller, independent operators in markets ignore these rules, larger, more respected operators likely do respect these laws which will always preclude their ability to property penetrate the market."

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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