Meta chief executive Mark Zuckerberg has directed employees to develop a prediction markets app called Arena that would operate separately from the company’s existing social media products, The New York Times reported on Tuesday, citing two employees familiar with the project.
Summary
- Meta has reportedly assigned a dedicated team to build Arena, a standalone prediction markets app that could compete with Polymarket and Kalshi.
- The proposed platform would initially use a points based system, though The New York Times reported that real money wagering remains under consideration.
- Meta’s reported entry comes as prediction markets face growing scrutiny from U.S. lawmakers, regulators, and gaming industry groups over oversight and consumer protection concerns.
The report said Arena would initially allow users to make predictions using a points-based system rather than real-money wagers. Sources cited by the newspaper said Meta has also discussed the possibility of introducing monetary betting in the future.
Meta plans to keep the app independent from Facebook and Instagram, though The New York Times reported that the company could use its existing platforms to funnel users toward the new service. Employees familiar with the initiative described the project as experimental but said it remains a high-priority effort inside the company.
Arena would place Meta in direct competition with prediction market operators such as Polymarket and Kalshi. Meta reported 3.56 billion daily active users across its family of apps as of March, giving the company a potential distribution advantage if it launches the product.
Prediction markets attract major firms
Meta’s reported plans arrive as prediction-style products gain attention from large financial institutions.
As crypto.news previously reported, Charles Schwab partnered with Cboe Global Markets to develop contracts tied to the performance of the S&P 500. People familiar with the matter told The Wall Street Journal that Schwab customers could gain access to those products in the coming months.
Unlike Polymarket and Kalshi, which primarily offer event-based contracts linked to elections, sports, economic developments, and other real-world outcomes, Schwab’s proposed offering is expected to be structured as options contracts.
Meta has also pursued other initiatives tied to digital assets and blockchain technology in recent years. The company introduced the Libra stablecoin project in 2019 before rebranding it to Diem and ultimately discontinuing the effort in 2022.
In April, Meta expanded support for USDC payouts to selected Facebook creators in Colombia and the Philippines. Some U.S. lawmakers later raised concerns about reports that the company was exploring additional stablecoin-related activities in the United States.
Meta also announced workforce reductions earlier this year. Reports in April said the company planned to cut about 10% of its staff, affecting roughly 8,000 employees as it increased investment in artificial intelligence projects.
Regulatory scrutiny intensifies
Prediction market operators continue to face challenges from regulators, lawmakers, and gaming industry groups.
Earlier this month, nine House Democrats led by Representatives Kevin Mullin and Gabe Vasquez asked the Federal Trade Commission to investigate whether prediction market companies present themselves differently to consumers and regulators. The lawmakers cited advertisements that promoted sports betting-style activity while companies simultaneously described their products as financial contracts in regulatory settings.
Congress has also examined prediction market platforms over issues including insider trading, geolocation controls, and market surveillance practices. Lawmakers previously questioned how companies identify users with direct knowledge of events that could influence contract outcomes.
The policy debate has expanded beyond consumer protection issues. On June 17, the American Gaming Association, the Indian Gaming Association, and other gaming organizations urged Congress to use pending crypto market structure legislation to prevent sports and casino-style prediction markets from operating under federal derivatives rules.
Those groups argued in a letter cited by Semafor that sports event contracts function similarly to traditional sports betting products and should remain subject to state and tribal gaming laws rather than oversight by the Commodity Futures Trading Commission.
Federal regulators, however, have maintained a different position. The CFTC has continued defending its authority over event contracts while developing a framework that could evaluate individual contracts rather than impose broad restrictions across entire categories.
