Meta, the parent company of Facebook, is quietly building a prediction market app called 'Arena,' according to people familiar with the matter who spoke with the New York Times. The product would let users make forecasts on future events — from politics and sports to entertainment and global affairs. Unlike established platforms such as Polymarket or Kalshi, Arena is expected to use a video game-like points system instead of real cash, though the company hasn't ruled out introducing real-money betting down the line.
Polymarket's Boom Fuels Meta's Second Attempt
The timing is no coincidence. During the 2024 U.S. presidential election, crypto-based prediction market Polymarket saw trading volumes surge into the billions of dollars, catapulting prediction markets into mainstream political discourse. Nearly every major trading platform has since explored similar products. Crypto-native firms like Coinbase and Kraken have dabbled, while retail broker Robinhood launched event contracts tied to political and economic outcomes.
Meta had previously tested the waters with a product called Forecast in 2020, encouraging predictions on current events and trends amid the early Covid-19 pandemic. That project was shut down in 2022. Now Arena signals renewed commitment, described internally as both an experimental effort and a top priority.
Regulatory Scrutiny Intensifies
Fast growth of prediction markets has drawn sharp legal and regulatory attention. Critics argue that contracts tied to elections, geopolitics, or other sensitive events blur the line between financial instruments and gambling. The Commodity Futures Trading Commission (CFTC) has repeatedly wrestled with whether certain event contracts serve legitimate hedging purposes or constitute prohibited gaming. Concerns over market manipulation, insider trading, consumer protection, and participants profiting from events they might influence add to the regulatory fog.
Despite the uncertainty, the broader industry continues to lean in. Meta's entry will likely intensify both competition and compliance battles in the prediction market space.