Meta Is Coming For Prediction Market Giants Polymarket And Kalshi, NYT Reports

Meta, the parent company of the world’s largest social media networks, is developing a prediction market app that could reshape a sector currently dominated by Polymarket and Kalshi. 

According to the New York Times, the company’s founder, Mark Zuckerberg, has secretly assembled a team to develop a standalone smartphone app that allows users to predict real-world outcomes.

Meta’s Second Attempt At Prediction Markets

Per the report, the app is internally known as “Arena.” It would operate separately from Meta’s existing platforms — Facebook, Instagram, WhatsApp, and Messenger — and would use a points-based system in place of cash wagers, though the company has not ruled out introducing real money betting down the line. 

Notably, this isn’t Meta’s first attempt in this space. In 2020, the company launched Forecast, a crowdsourced prediction app built around the early days of the COVID-19 pandemic. It used a points system, attracted a small following, and was shut down in 2022 without ever reaching mainstream adoption. 

According to people familiar with the matter, cited in the report, Arena is a more serious effort. Those close to the project describe it as experimental, but a top priority for the company.

But for now, Meta is not the only major name moving into prediction markets. Traditional sports betting operators FanDuel and DraftKings have both entered the space. Gemini, the cryptocurrency exchange founded by the Winklevoss twins, has done the same. 

Legal Concerns Mount

The growing attention that platforms such as Polymarket have received since last year has attracted legal scrutiny. Prediction markets allow users to bet on almost any outcome, creating potential opportunities for those with access to non-public information to profit illegally. 

A pattern of suspicious trading on Polymarket has already caught the attention of federal authorities. In April, prosecutors in New York charged a member of the US Special Forces with using confidential knowledge of a covert operation to capture Venezuelan President Nicolás Maduro to place bets on Polymarket — earning more than $400,000 in the process, according to the charges.

These concerns have drawn increased scrutiny to the Commodity Futures Trading Commission (CFTC). The federal agency is responsible for overseeing prediction markets and is currently involved in lawsuits against states such as Kentucky, in a bid to secure the sole authority to regulate these platforms. 

For now, Arena remains in development and may never see a public release, Meta insiders told the Times. But the fact that Zuckerberg is paying attention to this space at all says something about the growing interest in the sector throughout the past months.

Featured image generated with OpenArt.