Meta Develops 'Arena' Prediction Market App Without Real Money

Meta CEO Mark Zuckerberg has tasked a small team at the company with developing a prediction market app internally called 'Arena,' modeled after existing platforms like Polymarket and Kalshi. According to The New York Times, the app will initially operate without real money, instead using a points-based system where users earn points for making accurate predictions. However, Meta has not ruled out eventually allowing real money wagering. Described by Meta insiders as "experimental but a top priority," the app is designed to operate independently from Meta's other platforms, though Meta plans to direct users to it from its social media offerings.

The move reflects growing interest in prediction markets, which have generated tens of billions of dollars in trading volume across platforms like Polymarket and Kalshi. Other social media companies, including X, have already partnered with prediction market platforms. Meta's approach mirrors its historical pattern of developing versions of popular features pioneered elsewhere, such as Stories from Snapchat and vertical video feeds from TikTok.

Prediction markets have been controversial, with legal challenges emerging from multiple directions. Users have faced arrests for suspicious betting activity, and platforms have faced scrutiny over their practices—Polymarket was recently reported to have paid individuals to create fake promotional videos. Several states have sued prediction markets over alleged gambling law violations, while high-profile figures including a former special forces officer and political figure George Santos have faced legal investigations related to prediction market trades. The current administration has taken a pro-prediction market stance, even suing states that have pursued regulatory action against these platforms.