Meta challenges Polymarket and Kalshi with the upcoming prediction markets platform

Meta’s latest bet on predictions

Mark Zuckerberg wants Meta to move into prediction markets. Reports citing The New York Times say he directed a small team to develop a smartphone app internally called Arena that would work in a similar space as Polymarket and Kalshi.

The move suggests Meta sees potential in a fast-growing industry built around forecasting future events, from elections to sports. Meta could use its existing apps, including Facebook, Instagram, WhatsApp and Messenger, to send users toward Arena if the project moves forward.

What exactly is Arena?

Meta’s new app, called Arena, would work separately from Facebook and Instagram. Users would not bet real money at first, but instead use video game-style points to make predictions about future events.

This points system makes it feel more like a game than gambling. However, company insiders say Meta hasn’t ruled out adding real money betting later. The app is still in development, and there’s no guarantee it will ever launch to the public.

Why is Zuckerberg interested now?

Prediction markets have exploded in popularity. In 2025, Polymarket and Kalshi together handled about $50 billion in trades, and that number has already surpassed $130 billion in 2026.

Investment firm Bernstein projects total market volumes could reach $240 billion for the full year 2026, a 370% increase compared to last year. Zuckerberg has a history of following successful trends, just like he did with Instagram Stories, copying Snapchat, and Reels copying TikTok.

Meta tried this before

This is not Meta’s first attempt at prediction-style products. In June 2020, Facebook’s NPE Team launched Forecast, an experimental app that let people make predictions about future events using in-app points.

Forecast did not become a lasting Meta product, and the company later moved to shut it down. The timing is different now because Kalshi and Polymarket have helped bring prediction markets much closer to the mainstream.

Fun fact: Combined monthly global trading volume on Kalshi and Polymarket rose from less than $5 billion in September 2025 to about $24 billion in April 2026.

How do prediction markets work?

Prediction markets let people buy and sell contracts based on yes or no questions about future events. For example, you might buy a contract that pays $1 if a certain candidate wins an election or a team wins a championship.

The price of each contract shows the market’s prediction of that outcome. If a contract costs 40 cents, the market believes there’s a 40% chance it will happen. Fans say these markets are often more accurate than polls because people have actual money on the line.

Fun fact: Kalshi’s annual trading volume reached $23.8 billion in 2025, marking a massive 1,108% increase year-over-year.

The big players, Polymarket and Kalshi

Polymarket and Kalshi are among the most prominent prediction market platforms right now. Polymarket uses blockchain-based infrastructure, and Intercontinental Exchange, the parent company of the New York Stock Exchange, announced an agreement to invest up to $2 billion in the company.

Kalshi is a CFTC-regulated exchange for event contracts, giving it a different regulatory position from many earlier prediction market projects. Both platforms drew major attention around the 2024 presidential election and have continued to grow as event-contract trading has moved further into the mainstream.

The controversy factor

Prediction markets have faced serious legal and ethical concerns. In April 2026, federal prosecutors charged U.S. Army Special Forces Master Sgt. Gannon Ken Van Dyke with using classified information about a U.S. military operation involving Nicolás Maduro to profit from Polymarket bets; prosecutors said the trades made more than $400,000.

A Google software engineer was also charged in May 2026 with using confidential Google search-trend data to make more than $1.2 million on Polymarket. The cases show why regulators and law enforcement are paying closer attention to the risk of non-public information being used in prediction markets.

Legal battles heat up

Several US states have started suing prediction market platforms, arguing they’re running illegal gambling operations without proper licenses. The Trump administration has responded by suing those states, creating a messy legal fight between federal and state governments.

This legal uncertainty could affect Meta’s plans for Arena. If prediction markets face tight regulations or bans, Meta might decide to scrap the whole project. For now, the company seems willing to take that risk.

Traditional sports betting jumps in

Prediction markets have caught the attention of traditional gambling companies, too. FanDuel and DraftKings, which are known for sports betting, have started offering their own prediction market services.

This competition has caused some concern among investors. When news of Meta’s Arena app came out, DraftKings stock fell more than 2%. Investors worry that prediction markets could take business away from traditional sports betting, especially since they cover so many different types of events.

What makes Arena different?

Meta’s Arena would stand out by using points instead of real money, at least at first. This might help the company avoid some of the legal and regulatory headaches that Polymarket and Kalshi face.

The points system makes prediction markets feel more like a casual game. Users could earn bragging rights or virtual rewards without risking actual cash. However, this approach might not attract serious bettors who are looking for real financial payoffs.

Meta’s user advantage

Meta has a massive advantage that other prediction market companies don’t: billions of users. About 3.56 billion people use at least one Meta app every single day.

The company plans to use Facebook, Instagram, and WhatsApp to promote Arena and direct users to the new app. This built-in audience could help Arena grow much faster than its competitors had to. But Meta has struggled before to get people to download and use standalone apps that aren’t part of their main social networks.

More new apps in the works

Arena is just one of several experimental apps Meta is developing. The company is also working on something called Meta Photos, which would use artificial intelligence to create new types of media.

Zuckerberg seems to be looking for fresh ways to grow beyond Facebook and Instagram. Both platforms have reached a point where adding new users is getting harder. Creating new standalone apps might be the key to unlocking more growth for Meta in the coming years.

If you want to see how Meta’s broader strategy is unfolding amid growing pressure on the company, check out how Meta seeks congressional backing as youth safety lawsuits mount for a closer look at what’s driving its next moves.

Will Arena actually launch?

Company insiders say Arena is still in development and might never see the light of day. Meta has a history of testing experimental products and then quietly killing them if they don’t show promise.

For now, this is Zuckerberg following his usual playbook, spot a trend, copy it, and try to use Meta’s massive reach to win. Prediction markets have grown from a niche curiosity into a fast-growing segment of global trading.

If you want to see how Meta is backing up that strategy with bigger infrastructure bets behind the scenes, check out how Meta explores unconventional data center construction for AI growth for a closer look at what’s powering its next wave of experiments.

What do you think about Meta jumping into prediction markets? Drop your thoughts in the comments below and give this post a thumbs up if you found it interesting.

This slideshow was made with AI assistance and human editing.

Don’t forget to follow us for more exclusive content right here on MSN.

Read More From This Brand:

• Meta’s smart glasses draw privacy concerns after code discovery
• Meta job cuts spread across multiple divisions during restructuring
• Meta explores unconventional data center construction for AI growth