Meta has reportedly formed a team to develop a prediction market app called Arena, a signal of the company’s entry into a sector that has attracted growing interest from both retail users and institutional investors.
Summary
- Meta is reportedly developing Arena, a prediction platform designed to compete with Polymarket and Kalshi.
- The app is expected to use a points-based system initially, though real-money wagering remains a possibility.
- Meta’s entry comes as prediction markets attract firms like Charles Schwab while facing growing regulatory scrutiny.
According to a report from The New York Times, Meta chief executive Mark Zuckerberg has assigned a dedicated team to work on the project, which is expected to compete with prediction market platforms including Polymarket and Kalshi.
People familiar with the matter told the newspaper that the application is currently designed around a points-based system similar to video games rather than real-money wagering.
The sources also told The New York Times that the possibility of introducing monetary wagers remains under consideration. Arena is expected to operate independently from Meta’s existing products, including Facebook, Instagram, and WhatsApp.
Drawing on its massive social media footprint, Meta reportedly plans to direct users from its existing platforms toward the new service. The project has been described by employees familiar with the effort as a high-priority initiative within Zuckerberg’s push to develop products tied to emerging online trends.
Institutional interest in prediction markets continues to grow
Meta’s reported move comes as prediction-style trading products continue to gain traction across financial markets.
As previously reported by crypto.news, Charles Schwab recently entered the sector through a partnership with Cboe Global Markets. The firms are developing contracts linked to the performance of the S&P 500, placing Schwab alongside companies such as CME Group and Interactive Brokers, which already offer similar products.
People familiar with the matter told The Wall Street Journal that Schwab customers are expected to gain access to the contracts in the coming months. Unlike platforms such as Kalshi and Polymarket, which primarily offer event-based futures contracts, Schwab’s product is expected to be structured as options.
The growing participation of traditional financial firms has coincided with rising attention on prediction markets as tools for speculation, forecasting, and risk management. Institutional investors have increasingly explored these products to hedge positions and gauge market expectations around major events.
Regulatory pressure builds against prediction markets
At the same time, prediction market operators are facing mounting regulatory challenges in several jurisdictions.
State regulators in the U.S. have continued to argue that some prediction market platforms function as unauthorized gambling venues. Separately, gaming industry groups are lobbying U.S. senators to include provisions in the CLARITY Act that would prohibit sports betting activity on prediction market platforms.
Outside the U.S., authorities have also stepped up enforcement efforts. Earlier this month, South Korean regulators launched an investigation into alleged illegal gambling activity linked to Polymarket.
Additional restrictions have emerged in India. Kalshi recently updated its members’ agreement to add India to its list of restricted jurisdictions, bringing the total number of restricted locations to 55. The change came roughly one month after Indian authorities blocked access to Polymarket and warned virtual private network providers against enabling access to prediction market websites.
Polymarket has also come under scrutiny following a Wall Street Journal investigation that alleged the platform paid online creators to produce misleading advertisements. According to the report, the U.S. Federal Trade Commission has not publicly stated whether it intends to investigate those allegations.
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