Meta reportedly building prediction markets app called Arena to challenge Polymarket and Kalshi

Meta wants a piece of the prediction market boom.

Mark Zuckerberg has reportedly assigned a small team inside Meta to build a smartphone app modeled on prediction platforms like Polymarket and Kalshi, according to a New York Times report published Tuesday. The app, internally known as Arena, would give users a place to make forecasts on real-world events, marking Meta’s latest attempt to turn online behavior into a new product category.

The early version of Arena is expected to look more like a game than a gambling app. According to the report, Meta is leaning toward a points-based system instead of real-money wagers, at least at launch. The company has not ruled out allowing users to bet real money later.

“Mr. Zuckerberg, the chief executive of Meta, recently dispatched a small team at his company to create a smartphone app similar to Polymarket and Kalshi,” The New York Times reported, citing two employees with knowledge of the matter.

“Users would not wager money, and the app would probably rely on a video-game-like points system instead, one person said, though the company had not ruled out the eventual use of real money betting,” the report added.

The project is notable for two reasons. The first is timing. Prediction markets moved from niche corners of crypto and finance into the mainstream during the 2024 U.S. presidential election, when traders flocked to platforms such as Polymarket and Kalshi to bet on everything from election outcomes to interest-rate decisions. Since then, the category has grown well beyond politics. Users now place bets on sports, macroeconomic events, policy shifts, and a steady stream of breaking news. Wall Street has taken notice too, with trading platforms including Robinhood and Interactive Brokers rolling out event contracts of their own.

The second is distribution. Meta already has one thing every startup in the category would kill for: reach. The company said in April that 3.56 billion people use at least one of its apps daily. Arena would reportedly operate as a standalone app, separate from Facebook, Instagram, WhatsApp, and Messenger, but Meta could still use those products to funnel users into it. That gives the company a built-in growth engine that Polymarket and Kalshi simply lack.

Meta’s reported push into prediction markets fits a familiar pattern. Zuckerberg has spent years trying to spot shifts in online behavior early enough to build around them, or at least keep Meta close to where user attention is moving. Sometimes that has meant copying features that gain traction elsewhere. Other times it has meant betting on entirely new categories, with mixed results. Arena appears to sit somewhere in the middle: a fast-growing market with real user demand, but one that still carries serious regulatory and reputational risk.

That risk is part of the story. Prediction markets have drawn fresh scrutiny in recent months as trading volumes have climbed and high-profile bets have produced eye-popping payouts. Questions have followed about market integrity, information asymmetry, and whether well-timed trades tied to major policy announcements are giving certain participants an unfair edge. Bernstein said in April that prediction markets could reach $1 trillion in annual trading volume by the end of the decade, a forecast that helps explain why more companies want in. It also explains why regulators are paying closer attention.

Arena is reportedly one of several standalone products Meta is testing. Another, called Meta Photos, is said to be focused on generating new forms of media. Taken together, the projects suggest a company still hunting for the next product that can live outside its core social apps, yet still benefit from the giant distribution machine those apps provide.

For Meta, the appeal is obvious. Prediction markets turn attention into participation. They keep people engaged during live events, give them a reason to return throughout the day, and create a stream of data about what users care about, fear, and expect to happen next. If Meta can package that behavior into a product that feels more like entertainment than finance, Arena could end up being less about betting and more about building another sticky social experience around live information.

That is the bet, anyway. The harder question is whether users want a Meta-owned venue for forecasting the future, and whether regulators will be comfortable with a company of Meta’s scale deciding to sit between social conversation and speculative trading.