Prediction markets suffer another blow! Indonesia shuts down Polymarket due to President Prabowo's resignation and gambling activities crossing red lines.

On the evening of May 24, Indonesia's Ministry of Communications and Digital Affairs (Kominfo) officially announced the blocking of the prediction market platform Polymarket , classifying it as an "illegal online gambling platform." The reason given was that the platform allowed users to speculate on "uncertain event outcomes," violating local online gambling regulations. This is the most severe blow ever taken against Polymarket by Southeast Asia's largest economy, and the latest wave of regulatory headwinds the platform has faced in Asia.

The direct trigger for the ban can be traced back to May 21: the day after President Prabowo Subianto announced plans to centralize the export rights of Indonesian commodities such as coal and palm oil under the control of a national agency , a controversial betting platform appeared on Polymarket—betting on when Prabowo would step down as president. Prabowo's term is legally set to expire in 2029, and this betting quickly went viral on Indonesian social media, drawing serious attention from the government.

What red line was crossed? Indonesian authorities have classified it as "illegal gambling."

Indonesia, the world's largest Muslim-majority country, has a criminal code that explicitly prohibits all forms of gambling, including online and offline gambling. In a statement released Friday evening, Alexander Sabar, an official from the Ministry of Communications and Digital Affairs, explicitly stated that Polymarket's operating model "involves betting and speculation on the outcome of uncertain events," thus constituting a violation of the law. Sabar further stated that the government is conducting a comprehensive investigation of all social media accounts associated with Polymarket.

It's worth noting that Indonesian authorities' crackdown on online gambling didn't begin with Polymarket. In recent years, the government has shut down tens of thousands of gambling websites and required banks to block gambling-related transactions. Reuters reported that Prabowo's announcement on May 20th of a centrally coordinated commodity export policy had already caused a stir in investment circles, and Polymarket's subsequent listing of a presidential resignation betting scheme touched upon both political and regulatory sensitivities.

Asian regulatory headwinds: South Korea has also taken action, but global attitudes are divided.

Indonesia is not the first Asian country to take regulatory action against Polymarket. Previously, the Korean Gambling Crime Prevention Committee (KCSC) had launched a formal investigation into Polymarket , determining that its operating model may violate South Korea's anti-gambling laws, with betting related to the June local elections being the main trigger.

However, Polymarket has received drastically different treatment in the United States: approved by the Commodity Futures Trading Commission (CFTC), the platform has returned to operate in the US as a "designated contract market," offering regulated forecasting contract trading. This "legal vs. illegal" contradiction existing simultaneously on the same platform reflects the lack of consensus among countries worldwide regarding the legal status of forecasting markets.

The regulatory gray area of ​​prediction markets: Asia-Pacific countries are watching closely.

Prediction markets like Polymarket allow users to bet on sporting events, election results, and even geopolitical events. This multi-billion dollar industry faces vastly different regulatory attitudes from different countries. Some U.S. state governments also consider prediction markets to be illegal, unlicensed gambling activities under local laws.

In the Asia-Pacific region, most countries have yet to establish a clear legal framework for prediction markets. Domestically, for example, prediction markets are currently in a regulatory vacuum; they are neither formally defined as gambling nor regulated by a federal-level agency like the US CFTC. Indonesia's recent strong ban on Polymarket may have a demonstrative effect on other emerging Asian markets, further limiting the development space for prediction markets in Asia.

Polymarket has not yet responded to Reuters' email request for comment. The Indonesian government has stated that it will continue to investigate social media accounts associated with the platform. The Prabowo government's heightened vigilance regarding politically sensitive content, alongside its push for economic reforms, adds further uncertainty to the market's future prospects in Asia.

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