Meta’s Arena Prediction Market App Targets Polymarket and Kalshi

Mark Zuckerberg has directed a small team at Meta to build Arena, a standalone prediction market app that would use video-game points instead of real money to take on Polymarket and Kalshi. The New York Times first reported the effort Tuesday, citing two Meta employees familiar with the matter. Asked about the report, Meta declined to comment.

Arena would operate as a separate product from Facebook, Instagram, WhatsApp, and Messenger. Meta plans to draw users from its existing social network, with the internal effort described as experimental but a top priority within a broader push to test new standalone apps. Meta’s most recent quarterly report in April counted 3.56 billion daily active people across its apps, the funnel Zuckerberg would tap to seed the new product. The project may never ship, the report cautioned.

What Arena Is and How It Would Work

Arena is being built by a small team Zuckerberg put together, with two Meta employees confirming the effort to the Times. The product would let users predict the outcomes of live events like sports games and elections, the same kind of questions Kalshi and Polymarket list for trading. Like those exchanges, Arena would surface odds and let users back outcomes.

No funded account would be required. Users would earn or be assigned video-game-style points to wager, sidestepping the gambling and derivatives rules that govern real-money exchanges. Meta has not ruled out letting users bet real money at some point, according to one of the people familiar with the plans. The points structure mirrors Forecast, a crowdsourced prediction app Meta launched in 2020 and quietly shut down two years later. That earlier product also used a points-only model, with refreshes and a leaderboard ranking total ‘profit.’

Forecast launched in 2020 during the early months of the COVID-19 pandemic. The app let users make forecasts about world events for points, with regular refreshes and a leaderboard. Meta shut down Forecast two years after launch, and the company has not publicly explained why. Arena would be a cleaner version of Forecast, built outside Meta’s main apps.

The Copycat Playbook Returns

The push fits a familiar Zuckerberg pattern. Meta has long watched rivals take off and then spun up parallel products inside or alongside its existing apps. Prediction markets are the latest such category, with a 3.56 billion-user social platform as the latest distribution advantage.

• Instagram Stories launched in 2016 as a direct response to Snapchat.
• Reels arrived in 2020 to compete with TikTok’s vertical-video format.
• Threads launched in 2023 as a text-based rival to X.

In each case, Meta brought the distribution advantage of a billion-plus user base, and the new product grew quickly inside the larger platform. Standalone prediction markets present the same opportunity but a different complication, with Kalshi and Polymarket having already built the regulatory scaffolding the category requires. Forecast, launched in 2020 as a crowdsourced prediction product, ran on a points-only system and was pulled two years later, and is the closest analogue. The points-only design may carry into Arena, where Meta has not ruled out adding real-money wagering later. What changes is the funnel behind it.

Arena would be a cleaner version of that earlier attempt, built outside Meta’s main apps and aimed at the same audiences Kalshi now serves. The funnel Meta is buying today differs from what Forecast had in 2020, with the daily-active-people metric now at 3.56 billion across four apps. Same design, wider audience.

Forecast was shut down two years after launch without explanation. The points-only design from Forecast is what Meta would bring to Arena. Threads, the text-based rival to X launched in 2023, has not reached the daily-active scale of Instagram or WhatsApp. Both are precedents Meta is bringing to Arena.

The Industry Arena Is Walking Into

The prediction market industry has surged since the 2024 U.S. presidential election, when Kalshi and Polymarket both hit record trading volumes. Kalshi, the U.S.-regulated exchange, raised $1 billion in a Series F round in May at a $22 billion valuation, the round led by Coatue, doubling its price tag from five months earlier. Annualized trading volume on Kalshi tripled over six months to reach $178 billion, the company said at the funding announcement. Polymarket, the blockchain-based rival, is in talks to raise $400 million at a $15 billion valuation, in talks first reported in April. Institutional trading volume on Kalshi grew 800% over the past six months.

Both platforms have benefited from a newly friendly regulatory environment in Washington. The Commodity Futures Trading Commission oversees event contracts as derivatives, and brokers like Robinhood and Interactive Brokers have rolled out event-contract products. By decade-end, prediction markets could hit $1 trillion in annual trading volume, Bernstein said in April.

The combined trading volume of the two leading platforms reached $50 billion last year and has already surpassed $130 billion this year, according to Korean outlet Chosun Biz, citing industry aggregates. That growth has come alongside increased regulatory scrutiny. In April, federal prosecutors in New York charged a member of the U.S. Special Forces with using confidential information related to plans to capture Venezuelan President Nicolás Maduro, allegedly earning around $400,000 through related bets. Trump Media & Technology Group has also announced plans to enter the prediction-market space. Arena would land inside that momentum as the first major social media incumbent to enter the category.

Where the Threat First Landed

Investors read the Arena report as a near-term competitive risk to sportsbooks and event-contract brokers. Shares of DraftKings fell more than 2% on Tuesday before trimming the loss to around 1%, CNBC reported. Flutter Entertainment, the parent of FanDuel, slipped nearly 2% in the same session. So did Robinhood, which has rolled out event contracts over the past year.

Each of the three has staked growth plans on the prediction-market category, and each now faces the prospect of a 3.56 billion-user competitor entering the field. The market reaction was small but pointed, with incumbents weighing Meta’s distribution reach more than Arena’s product features. Already, the Kentucky lawsuit against Kalshi and Polymarket has moved the regulatory floor on event contracts.

• 3.56 billion daily active people across Meta’s apps (April 2026).
• $22 billion valuation for Kalshi from its May 2026 Series F.
• $15 billion valuation target for Polymarket in talks reported April 2026.
• DraftKings fell more than 2% on the Arena report.
• Flutter Entertainment fell nearly 2% in the same session.

Meta counted 3.56 billion daily active people across Facebook, Instagram, WhatsApp, and Messenger in April, with onboarding flows already in place on each one. The metric is the funnel Zuckerberg would tap if Arena ships. DraftKings and Flutter have rolled out event-contract products on top of their sportsbook user bases. Each of those companies spent the past year scaling event contracts.

And the Arena plan leans on the same distribution advantage. Meta plans to direct users from its existing apps to the new platform, the Times report said. DraftKings and Flutter have spent the past year building event-contract businesses. Their user bases sit on top of sportsbooks, which themselves are a fraction of Meta’s daily active audience. Arena would not need a funded account to begin seeding that funnel.

Regulation and Meta’s Track Record

The points-only design is also a regulatory hedge. U.S. prediction markets operate inside a CFTC framework that treats event contracts as derivatives. Several states have moved to block sports-related event contracts. Kentucky has sued Kalshi and Polymarket over sports betting, naming Coinbase, Robinhood, and Webull as defendants. Under that pressure, a points-only app sidesteps the derivatives question and the patchwork of state gambling regulators.

Forecasters get points when they join and then regularly get refreshes as they play. There’s a leaderboard that tracks total point ‘profit.’

That description comes from a 2020 Meta blog post about Forecast, the company’s first attempt at a prediction product. The points-only model that defined Forecast would define Arena as well. Two years after launch, Meta shut down Forecast without publicly explaining why.

Arena now offers Meta the chance to revisit Forecast with a wider distribution strategy and a larger audience in reach. Forecast lacked the audience Meta now reaches across Facebook, Instagram, WhatsApp, and Messenger. This time, the strategy would route users from those apps to Arena, the Times report said. Meta is also testing Meta Photos, a separate app for AI-generated media, the Times report said.

Arena may never ship, the report cautioned. Both efforts are part of a broader Zuckerberg initiative to develop new types of apps based on emerging online social behavior. The Times report described Meta Photos and Arena as parallel experiments under the same umbrella.

And both efforts are small in headcount. The Times report cited two Meta employees familiar with the Arena work. Meta Photos is similarly early-stage. Zuckerberg has framed both as ways to test new product surfaces outside the saturated Facebook and Instagram feeds. The Arena project has received more media attention so far.

Frequently Asked Questions

What is Meta’s Arena prediction market app?

Arena is a standalone smartphone app Meta is developing that would let users predict outcomes on live events like sports games and elections. It would run on video-game-style points, with no cash wagering, letting Meta launch without the gambling licensing Kalshi and Polymarket carry.

When will Meta’s Arena app launch?

Arena is still in early development and has no public release date. The Times report warned the project may never ship, and Meta declined to comment on the effort.

Will Arena let users bet real money?

Meta has not ruled out real-money wagering in a future version of Arena, according to people familiar with the matter who spoke to the Times. The current design centers on a points-only model that mirrors Meta’s 2020 Forecast product.

Why are DraftKings and Flutter stocks falling on the news?

DraftKings fell roughly 2% on Tuesday before trimming the loss to around 1%, and Flutter Entertainment, the parent of FanDuel, slipped nearly 2% in the same session. Robinhood, which has rolled out event contracts, also declined. All three had pushed aggressively into event contracts and prediction markets over the past year, and a 3.56 billion-user competitor entering the space reads as a direct threat to that growth lane.

Has Meta tried prediction markets before?

Meta launched Forecast, a crowdsourced prediction app, in 2020 during the early months of the COVID-19 pandemic. The product used a points-only model with refreshes and a leaderboard tracking total point ‘profit.’ Meta shut Forecast down two years later without publicly explaining why, though the design closely mirrors what Arena is now attempting.