Meta is reportedly building a prediction market app called Arena, marking the social media giant’s entry into a sector that has drawn both retail users and institutional investors. According to The New York Times, CEO Mark Zuckerberg assigned a dedicated team to the project, which will compete directly with platforms like Polymarket and Kalshi.
People familiar with the matter said the app is currently designed around a points-based system similar to video games, rather than real-money wagering. However, the possibility of introducing monetary bets remains under consideration. Arena is expected to operate independently from Facebook, Instagram, and WhatsApp, though Meta plans to leverage its massive social media footprint to funnel users to the new service. Employees describe the project as a high-priority initiative in Zuckerberg’s push to develop products tied to emerging online trends.
Institutional Giants Join the Race
Meta’s move comes as traditional financial firms increasingly embrace prediction markets. Charles Schwab recently partnered with Cboe Global Markets to develop contracts linked to the S&P 500, structured as options rather than event futures. CME Group and Interactive Brokers already offer similar products. These developments have turned prediction markets into tools for hedging and expectation gauging.
Regulatory Heat Intensifies
At the same time, prediction market operators face mounting regulatory challenges. U.S. state regulators argue that some platforms function as illegal gambling venues. Gaming industry groups are lobbying U.S. senators to include provisions in the CLARITY Act that would ban sports betting activity on prediction platforms.
Outside the U.S., authorities have stepped up enforcement. This month, South Korean regulators launched a probe into alleged illegal gambling linked to Polymarket. India blocked access to Polymarket and warned VPN providers against enabling access. Kalshi updated its members’ agreement to add India to its list of 55 restricted jurisdictions. Separately, a Wall Street Journal investigation alleged Polymarket paid online creators for misleading ads; the U.S. Federal Trade Commission has not publicly stated whether it will investigate.
As Meta enters the fray, it must navigate both fierce competition and a tightening regulatory landscape. Whether Arena can balance growth with compliance remains to be seen.