INDONESIA Trends and Developments Contributed by: Winnie Yamashita Rolindrawan, Bianca Putri Kadarisman and Qafaldi Putra Ismayudha, SSEK Law Firm
There is no existing framework under Indonesian law that expressly contemplates, permits or prohibits financial products structured as prediction markets. For financial innovations that fall outside existing reg- ulatory frameworks, Indonesia provides a regulatory sandbox mechanism administered by the OJK under OJK Circular Letter No 5/SEOJK.07/2024 regarding a Mechanism for the Testing and Development of Inno- vations (OJK CL 5/2024). In principle, a prediction market product could theoretically be proposed for sandbox testing, as it may arguably be characterised as a financial innovation involving event-based finan- cial contracts that have not previously been regulated or supervised under existing financial sector regula- tions. However, any prediction market proposal would face significant challenges in seeking OJK approval as, from an initial assessment, such a model may poten- tially be viewed as resembling gambling. This percep- tion carries serious weight under Indonesian law. Arti- cle 426 (1) of Law No 1 of 2023 regarding the Criminal Code, as amended by Law No 1 of 2026, provides for criminal sanctions of up to nine years of imprisonment or a fine of up to IDR2 billion for anyone who, without a licence, offers or provides the opportunity to gam- ble or participates in gambling enterprises. While the term “gambling” is not defined in the current Criminal Code, the Old Indonesian Criminal Code defines it broadly to encompass any game or wager in which the possibility of obtaining profit is based on chance, which could plausibly encompass prediction market instruments, depending on how they are structured and presented. Although prediction markets can be structured as financial instruments in other jurisdictions, from a regulatory and public policy perspective in Indonesia they may be perceived as resembling gambling activi- ties, which presents a significant obstacle even where the product is technically designed as an event-based financial contract. Indonesia’s financial sector is sub- ject to high regulatory scrutiny, and regulators tend to adopt a cautious approach toward new financial
products that could be characterised as speculative or gambling-like in nature. Sandbox innovations that have successfully progressed to formal recognition as Technological Innovations in the Financial Sector have generally been products that improve financial inclusion, credit assessment or consumer access to financial services – a profile that prediction markets may struggle to align with. In light of these considerations, interested parties would be best advised to first seek a preliminary audience with the relevant OJK officials to explain the proposed business model in detail, before formally submitting a sandbox application, in order to obtain the regulator’s initial assessment and reduce the risk of outright rejection. Key Takeaways Indonesia’s digital asset regulatory landscape in 2026 is defined by a regulator that is actively deepening and broadening its oversight framework while the market simultaneously pushes at the edges of what the existing architecture can accommodate. OJK Reg 27/2024, as amended, demonstrates the OJK’s will- ingness to refine the foundational regime established under OJK Reg 27/2024, addressing gaps around derivatives, licensing clarity, segregated accounts and administrative requirements. The Draft OJK Regula- tion on digital financial asset offerings signals that Indonesia is moving toward a more comprehensive primary market framework, which, once finalised, will have significant implications for ICO and ITO activity in the country. At the same time, the challenges surrounding predic- tion markets illustrate the limits of Indonesia’s current regulatory architecture when confronted with novel financial products that do not fit neatly within existing categories, particularly where public policy concerns around gambling and speculation are engaged. For businesses seeking to enter or expand in Indone- sia’s digital asset market, careful regulatory naviga- tion remains essential, including early and proactive engagement with the OJK.
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