Should Indonesia Reconsider Legalizing Gambling?
In recent years, illegal online gambling has become increasingly prevalent in Indonesia. With the rise of unregulated gambling platforms, it is essential to evaluate whether legalizing gambling is a viable solution to address this issue. In this article, we will discuss the potential benefits and drawbacks of legalizing gambling in Indonesia, with a focus on the economic and social aspects. Additionally, we will draw insights from the successful era of Governor Ali Sadikin, who introduced legalized gambling in Jakarta during his tenure.
Economic Impact: Employment Opportunities, Economic Growth, Tax Revenue, and Economic Multipliers
A study conducted in the United Kingdom in 2021 revealed that the gambling industry’s gross value added (GVA) increased significantly over the past decade. In 2019, the GVA of the gambling sector was estimated at £8.1 billion, contributing 0.4% to the country’s economy. This growth coincided with the surge in online gambling, which now accounts for 56% of the industry’s yield. Legalized gambling could potentially boost Indonesia’s economy and generate substantial tax revenue, similar to how it contributed £4.3 billion to the UK’s exchequer.
The same study showed that the gambling industry in the UK employed 85,000 people in 2019, comprising 0.3% of the national workforce. While employment in the sector has declined due to the shift towards online gambling, it remains a significant source of jobs in certain regions. Stoke-on-Trent, for instance, sees the gambling industry employing 2.5% of the local workforce. Legalizing gambling could create job opportunities in Indonesia, particularly in areas with a strong gambling presence.
The study also compared the economic multipliers of gambling with other consumer sectors. It found that gambling had lower multipliers, meaning that each pound spent on gambling had a limited impact on GVA and job creation compared to retail or food services. Therefore, legalizing and regulating gambling could lead to economic benefits, as it might encourage individuals to spend money elsewhere, ultimately boosting GVA, tax revenue, and job creation.
Social Impact: Problems, Health-Social Cost, and Community Well-Being
Legalized gambling can lead to an increase in problem gambling cases, which could have negative social repercussions. Individuals struggling with gambling addiction may experience difficulties in their personal and professional lives. Their performance at work may suffer due to concentration issues, absenteeism, and, in some cases, job loss. Addressing problem gambling is essential when considering the social implications of legalized gambling.
Problem gambling incurs costs on healthcare and the criminal justice system. Individuals affected by gambling addiction may suffer from mental health issues and physical illnesses due to stress. Furthermore, increased crime rates, including fraud and theft, may be associated with problem gambling, impacting communities and the criminal justice system.
Gambling-related financial strain can affect families and communities. Escalating debt, bankruptcy, and even homelessness may result from problem gambling, affecting not only the individuals involved but also their families and the community as a whole. It is crucial to consider the broader social consequences of legalized gambling, especially in terms of family stability and community well-being.
Lessons from Jakarta’s Governor Ali Sadikin’s Era
Governor Ali Sadikin’s era in Jakarta, from 1966 to 1977, is a period of Indonesian history that offers valuable insights into the impact of legalized gambling. During his tenure, Ali Sadikin introduced a policy of legalizing various forms of gambling in the city. This move, albeit controversial, was motivated by a desire to harness the potential economic benefits of gambling to transform Jakarta into a thriving urban center. However, examining this historical episode reveals a more complex narrative and provides several lessons that policymakers today should consider when contemplating the legalization of gambling.
One of the most significant lessons from Ali Sadikin’s era is the potential for economic transformation through the generation of tax revenue from gambling. By legalizing and taxing various gambling activities, the Jakarta government was able to accumulate substantial funds. These revenues were subsequently channeled into critical areas of development, such as infrastructure, education, public transportation, and community facilities. The lesson here is that gambling can be a significant source of revenue for public projects, potentially alleviating financial burdens on taxpayers and stimulating economic growth.
While the economic gains from gambling taxation were evident, Ali Sadikin’s era also revealed the importance of effective regulatory oversight. The introduction of legalized gambling brought with it the potential for social issues, particularly related to problem gambling. Some individuals experienced financial difficulties, addiction, and other negative consequences. This underscores the necessity of having comprehensive regulatory mechanisms in place to protect vulnerable individuals and address the social costs of gambling.
Ali Sadikin’s approach to legalized gambling raises questions about the balance between economic development and social well-being. It is essential for policymakers to weigh the economic benefits against the potential social harms. In the case of Jakarta, the tax revenue from gambling was reinvested in projects that aimed to improve the lives of residents. However, this approach was not without controversy, as religious groups protested the legality of gambling. The lesson here is that achieving a balance between economic growth and social well-being is a complex endeavor that requires careful consideration of both perspectives.
Another critical lesson from this era is the awareness of the broader social consequences of legalized gambling. Problem gambling can affect not only individuals but also their families and communities. Escalating debt, bankruptcy, and homelessness are issues that may arise, influencing the overall stability and well-being of communities. Policymakers must consider these implications when deciding on the legalization of gambling and take measures to mitigate any adverse social effects.
Learning from Past Mistakes
The era of Governor Ali Sadikin also serves as a reminder of the need to learn from past mistakes. While legalized gambling brought economic benefits, it also had social costs that should not be overlooked. Contemporary policymakers can draw valuable lessons from this historical episode, including the importance of comprehensive research, a thorough understanding of the potential consequences, and a commitment to effective regulation when considering the legalization of gambling.
Question Remains
The question of whether Indonesia should reconsider legalizing gambling is complex, involving economic benefits and social costs. While legalized gambling has the potential to contribute to economic growth, generate tax revenue, and create job opportunities, it also raises concerns about problem gambling and its associated social consequences. Learning from Governor Ali Sadikin’s experience, the government must carefully weigh the pros and cons, conduct thorough research, and consider the social and economic implications before making any decisions regarding the legalization of gambling. The goal should be to strike a balance between economic development and the well-being of Indonesian society.
References
