Meta is developing a new standalone prediction market application that could place the social media giant in direct competition with fast-growing platforms such as Polymarket and Kalshi, according to a new report.
The New York Times detailed that the project, internally known as "Arena," was ordered by CEO Mark Zuckerberg and is being developed by a small team inside the company. The application would allow users to make predictions about future events ranging from politics and sports to economic developments and cultural trends.
The platform is initially expected to use a points-based system rather than real-money wagering, although Meta has not ruled out introducing financial stakes at a later stage, the report noted.
According to the Times, Arena would operate independently from Meta's existing social media ecosystem. However, the company could leverage its enormous audience to drive adoption. Meta reported 3.56 billion daily active users across its family of apps in April, giving it a significant advantage over startups already operating in the prediction market space.
Prediction markets have become one of the fastest-growing segments of online finance and forecasting. They allow participants to buy and sell contracts tied to future outcomes, with prices reflecting the market's collective assessment of the probability of an event occurring.
Analysts at Bernstein estimated earlier this year that prediction markets could eventually reach $1 trillion in annual trading volume by the end of the decade. Major financial firms have also entered the space. Both Robinhood and Interactive Brokers now offer event-based contracts tied to political, economic, and sporting outcomes.
Earlier this month, the U.S. Commodity Futures Trading Commission proposed new regulations aimed at strengthening oversight of prediction market operators. Meanwhile, Kalshi announced additional compliance measures, including employment disclosures and whistleblower mechanisms, to address integrity concerns.
The regulatory environment could influence how Meta ultimately structures Arena. A points-based model would likely avoid some of the legal complexities associated with real-money event contracts, while still allowing the company to test consumer demand and engagement.
The project would not be Meta's first experiment with forecasting tools. The company previously launched a crowdsourced prediction platform called Forecast in 2020 before discontinuing the effort in 2022. Arena appears to represent a more ambitious attempt to capitalize on growing public interest in prediction markets and collective forecasting.
Arena is only one of several experimental applications currently being tested inside Meta, according to the report. Another project, known internally as Meta Photos, is reportedly focused on generating new forms of media content. Meta has not publicly confirmed the development of Arena, and Reuters noted that it was unable to independently verify details of the project.
