Meta is developing a new prediction market app aimed at competing with existing platforms such as Kalshi and Polymarket. The app, named Arena, allows users to speculate on real-world events. Instead of betting real money, users will get a daily supply of virtual funds for wagering. This approach opens the market to more users, with some estimating the prediction market could grow to a $1 trillion industry in the near future.
Meta CEO Mark Zuckerberg’s direction has led to the formation of a dedicated team tasked with building Arena. The information was first disclosed by The New York Times and confirmed by internal Meta documents seen by NPR. The app uses Meta’s Llama large language model, leveraging artificial intelligence to create and manage market questions based on current trends.
A key distinction of Arena is its AI-powered mechanisms for resolving market outcomes. The AI quickly determines if the predicted events occurred, much like Kalshi and Polymarket’s models, which center on yes/no questions. This process is designed to be fast, providing near real-time verification of results.
Arena builds on Meta’s previous foray into prediction markets with the app Forecast, which was discontinued due to high manual curation costs. The documents describe Arena as a “rebuild,” incorporating automated features to mitigate past hurdles.
Before the public launch, a prototype will be internally tested by Meta staff. While an exact release date remains unspecified, the app will be available for both iPhone and Android users.
Creating a platform without real monetary bets might seem unconventional. However, legal experts like gaming lawyer Daniel Wallach explain this choice. Without real money wagers initially, Meta gains time to navigate regulatory approvals and allows legal uncertainties surrounding prediction markets to be resolved.
The prediction market industry faces ongoing legal debates, with several lawsuits questioning the market’s regulations. These markets, bolstered by shifting regulatory attitudes during the Trump administration, are now under scrutiny by the Commodity Futures Trading Commission (CFTC).
Meta’s move places it among significant Silicon Valley entities exploring these markets. Nevertheless, the firm acknowledges challenges such as potential market manipulation and insider trading. Still, the broader appeal of prediction markets is evident. They attract major players like DraftKings, FanDuel, and even President Trump’s TruthSocial.
Meta faces obstacles in launching new standalone apps, but aims to leverage its daily user base of over 3 billion across Facebook, Instagram, WhatsApp, and Threads. The addition of Arena signifies Meta’s ongoing pursuit of innovation in digital engagement and competition in emerging market sectors.