Meta’s new prediction market app Arena could bring betting to 3 billion users

Mark Zuckerberg has directed a small team at Meta to build a smartphone app that would compete with prediction market platforms Polymarket and Kalshi, the New York Times reported on Tuesday. The app, internally called Arena, would operate independently from Facebook and Instagram. Meta declined to comment.

Arena would initially use a video-game-style points system rather than letting users wager real money, according to the report. The company has not ruled out introducing real-money betting in the future. The distinction matters because real-money prediction markets face federal oversight from the Commodity Futures Trading Commission, which regulators around the world have increasingly treated as gambling.

The announcement sent shares of existing betting and prediction market companies lower. DraftKings fell more than 2 percent on the news, Flutter Entertainment dropped roughly 2 percent, and Robinhood also declined. The market reaction reflects the threat that Meta’s distribution advantage poses to smaller platforms.

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Meta could direct its roughly 3 billion monthly active users across Facebook and Instagram toward a prediction market product, a scale that no existing platform comes close to matching. Polymarket and Kalshi have grown rapidly but remain niche by comparison. Combined monthly trading volume across both platforms quadrupled from under $5 billion to $24 billion between September 2025 and April 2026, according to Pew Research, but even that surge is small relative to Meta’s user base.

The timing is notable. The CFTC proposed new rules on June 10 that would ban contracts tied to war, assassinations, and terrorism while potentially legalizing wagers on sporting events. The regulatory framework for prediction markets in the United States is still being written, and Meta’s entry could accelerate that process by bringing mainstream consumer attention to a product category that has operated largely in the margins.

DraftKings launched its own Predictions platform in December 2025, but the company’s stock has fallen 37 percent year to date. Its 2026 revenue guidance of roughly six and a half to seven billion dollars came in well below the seven and a third billion that analysts expected. The gap between its ambitions in prediction markets and its financial performance suggests the category is harder to monetise than incumbents anticipated.

Prediction markets have also faced integrity problems. Kalshi and Polymarket both announced new insider trading curbs in March 2026 after a series of high-profile incidents. A Google engineer was charged by the Department of Justice with using internal search data to profit on Polymarket, and a US soldier was charged separately for betting on Venezuelan political outcomes using non-public information.

Arena is one of several new apps Meta is testing, according to the Times. Others include Meta Photos, a media-generation tool. The company has been expanding beyond its core social networking products under Zuckerberg’s direction, with recent initiatives including the Meta Business Agent for customer service across WhatsApp, Messenger, and Instagram, and paid subscription plans for its apps.

Whether Meta ultimately builds a points-only game or a real-money trading platform will shape the regulatory and competitive implications. A points-based product would sidestep CFTC jurisdiction entirely and could launch quickly. A real-money version would require regulatory approval and compliance infrastructure that Meta has never built, but would tap into a market that has shown it can generate billions in monthly volume.

For Polymarket and Kalshi, the threat is existential in either scenario. A free, points-based prediction game from Meta could drain casual user attention from platforms that depend on active participation to set accurate prices. A real-money version would pit them against a company with more cash, more engineers, and more users than the entire prediction market industry combined.