SPECIAL REPORT: The Indonesian President, Prabowo Subianto, recently said that offshore gambling costs the country around US$8 billion (£4.64 billion) a year and is a major economic threat to his Southeast Asian country.
But according to highly-placed sources familiar with the sector, who spoke to iGamingFuture on guarantees of anonymity even this substantial figure is a massive underestimation that fails to capture the true scale of the gambling industry which is “Haram” (forbidden) in the largest Muslim-majority nation by population on earth.
And in a further exotic and complex illicit twist it also fails to tell the tale of the nefarious nexus between Indonesia’s and Cambodia’s land-based casino industry, with its unregulated online gambling platforms, through which Indonesian businessmen make billions annually by targeting their own citizens.
In this exclusive two-part series, iGamingFuture explores the Indonesian-Khmer connection, substantiated by first-hand accounts of workers from within Cambodia’s biggest integrated casino resorts.
It’s a story as wild as a motorbike ride down Jakarta’s bustling and warung-filled back streets on a dark night.
Corruption
Indonesia is a diverse nation and home to over 280 million people, more than 17,000 islands and over 700 languages.
In this complex landscape, there is a lingua franca that everyone understands, and it’s not Bhasa Indonesia: It’s corruption.
Despite almost all forms of gambling being illegal in the Southeast Asian archipelago, corruption is all pervasive linked to the highest ranks of Indonesian society.
Crucially, much of Indonesia’s underground gambling ecosystem routes its operations offshore to protect those involved, with Cambodia the primary hub and haven.
Cambodia Connection
In Cambodia, land-based casinos are legal and thriving. There are around 200 licensed gambling venues, mostly located in the beachside city of Sihanoukville and the western city of Poipet, on the border with Thailand. The land-based sector is nominally regulated by the Commercial Gambling Management Commission.
Cambodia’s casino sector has become especially attractive to Indonesian operators because it allows them to run online operations aimed entirely at foreign players while remaining outside Indonesian jurisdiction.
Khmer casinos are a source of foreign direct investment, tax and local employment. Investors are said to be given the “red carpet treatment”, with licenses easy to procure so long as the investment is attractive enough. The industry has grown from 101 casinos in 2021 to over 200 at the last count.
Access to land-based casinos is strictly prohibited for Cambodian nationals. Instead, these venues serve foreign visitors, primarily from Thailand, Vietnam and China.
Illegal iCasinos
Online casinos in Cambodia were technically outlawed in 2020, but land-based resorts may continue to offer online services until pre-existing permits–issued before the new law came into force–expire. No new permits for online casinos are allowed.
Despite the effective ban, first-hand reports given to me reveal that, in practice, it is the close relationships between casino resort owners and Cambodian officials that lead officials to turn a blind eye, enabling new online operators to partner with the resorts and set up shop within their high, gated walls.
Legal gambling expert Edwin Vanderbruggen calls Cambodia’s online gambling scenario “somewhat opaque”.
He explained that while licensing does not exist, officials may “consider it a matter of policy” and allow land-based casinos to operate online platforms depending on the “significance of the physical side of the business”.
The Indonesian Connection
It is inside these Cambodian casino complexes that Indonesian-run online gambling operations quietly flourish.
The ownership of four of the biggest casino resorts (Kompong Dewa Casino, Trimulia Casino, The Holiday Palace and Istana Casino) has been linked to high-powered Indonesian businessmen and even politicians by the leading Indonesian publication, Tempo.co.
Kompong Dewa Resort, for example, is owned by the Lion Heart Group Cambodia, which was developed by the JHL Group. The founder of the JHL Group is Indonesian businessman Jerry Hermawan Lo.
Until recently, the Cambodian Ministry of Commerce listed the Lionhart Group’s Directors. One of the four names was Tommy Hermawan Lo, Jerry’s son. Another Director was Lo Pichvatanak.
Tommy Hermawan currently serves as the General Treasurer of the Indonesian Olympic Committee. He also holds a majority share of PT Dewa Utd, which runs the Dewa United football club.
Sun Erik AKA Erik Siswanto
Indonesian owners have gone to great lengths to conceal their identities. In some cases, this even includes opting for dual nationality (achieved through speaking Cambodian, earning nationalisation, or making donations to the government for an honorary title) and taking Cambodian names, like Hermawan senior’s Cambodia alias Lo Pichvatanak..
Businessman Sun Erik, who is listed as one of three Directors of Golden Oasis Entertainment, which owns Trimulia Casino. Erik was previously Erik Siswanto, born in Medan, Sumatra, the Islamic stronghold of Indonesia.
In their explosive report, Tempo journalists also linked Golden Oasis Entertainment–although he heavily denied it–to the Deputy Speaker of Indonesia’s House of Representatives and Chair of Indonesia’s second-largest political party, the Gerindra party, Sufmi Dasco Ahmad.
They reported that in a “2022 annual report, PT MNC Digital Entertainment Tbk wrote that their former chief commissioner, Sufmi Dasco, had previous business experience in Golden Oasis Entertainment Co Ltd and Golden Oasis Real Estate in Cambodia.”
Similarly, according to documents seen by Tempo journalists originating from Cambodia’s Ministry of Commerce, the Holiday Palace Hotel (owners of Casino Holiday Palace) lists Sumatran businessman, Susanto Sukardi, on the Board of Directors. Sukardi also appeared as one of three current Directors of Casino PoiPet-Aranh, which operates Casino Holiday PoiPet.
Three of Instanaimpian Corp’s (operators of Instana Casino) former board members are Indonesian citizens.
Intimidation
In the days following Tempo Magazine’s explosive exposé, the newspaper’s site was subject to days of ongoing DDoS attacks, attempting to overwhelm the site and prevent the public from accessing the content.
And other leading news sites that reported the Tempo attack were also targeted, say the Indonesian Committee for the Safety of Journalists,.
The Tempo journalists who wrote and travelled to Cambodia to research the article spoke out, saying they had been stalked and contacted by officials, including a “two-star General”, in attempts to intimidate them.
The Story So Far
So what appears to be on the surface a robust Cambodia casino resort industry aimed at tourists is actually also masking a network of Indonesian-run gambling operations, with high-powered Indonesian businessmen and potentially even politicians pulling the strings.
Essential to this set-up are the thousands of Indonesian employees, many from Java, Sumatra, and Sulawesi, who migrate every year and navigate this underground economy in an effort to improve their economic position and send money home.
And this is only the beginning.
Join us for Part Two tomorrow, where we’ll take you inside the heart of these operations as told by their employees, follow the flow of money, and expose the farce of Indonesia’s so-called online gambling crackdown.
A game that’s rigged from the top down.
