Key facts
- Meta is developing a prediction market app internally named 'Arena'.
- CEO Mark Zuckerberg is prioritizing the app's development.
- The platform may initially use points instead of real money.
- The app aims to capitalize on the growing prediction market sector.
- Existing platforms like Polymarket and Kalshi have seen significant trading volume.
Meta is reportedly developing a prediction market application named 'Arena,' signaling a move into a space currently dominated by platforms like Polymarket and Kalshi. According to a New York Times report citing company employees, CEO Mark Zuckerberg has prioritized the development of this app, which aims to capitalize on the growing sector. Initially, 'Arena' is expected to operate using a points system rather than real money, though integration of crypto payments is a possibility. The platform would function independently of Meta's existing social media services but could leverage them for user acquisition.
Prediction markets function as financial exchanges where participants buy and sell contracts tied to the outcomes of real-world events, such as election results or sports championships. The price of these contracts reflects the market's perceived probability of an event occurring. Platforms like Polymarket and Kalshi have seen substantial growth, with combined trading volumes reaching approximately $44 billion in 2025. Polymarket, founded in 2020, received a significant investment from the New York Stock Exchange's parent company in late 2025, indicating growing institutional interest.
Kalshi, established in 2018, became the first prediction market sanctioned by the US Commodity Futures Trading Commission (CFTC) after a court ruling allowed it to offer election contracts. This led to a surge in its monthly trading volume, surpassing that of traditional US sportsbooks. The involvement of Donald Trump Jr. as an investor in Polymarket and an advisor to Kalshi, alongside a more permissive regulatory stance, has further fueled the sector's boom.
However, the prediction market sector has faced controversy and legal challenges. Allegations of insider trading, such as a case involving a former special forces soldier using intelligence to profit on Polymarket, have emerged. Some US states have initiated lawsuits against these platforms, deeming them illegal gambling operations. This has created a legal standoff between federal and state authorities, as the Trump administration has reportedly sued states attempting to ban prediction markets. Concerns have also been raised about misleading social media posts and influencer campaigns promoting the accuracy of platforms like Polymarket.