Meta Reportedly Developing ‘Arena’ Prediction Market App

Meta Platforms (NASDAQ: META), the parent company of Facebook, is reportedly working on a new prediction market-style application called Arena, according to sources cited by The New York Times. The project would allow users to forecast the outcomes of future events across categories such as politics, sports, entertainment, and global affairs.

Unlike established prediction market platforms such as Polymarket and Kalshi, Arena is expected to use a points-based system similar to video games rather than real-money wagering. However, sources familiar with the matter said Meta has not completely ruled out the possibility of introducing cash-based betting features in the future. The project is reportedly considered both experimental and a major priority within the company.

Meta’s interest in prediction markets follows the sector’s rapid growth in recent years. Platforms like Polymarket gained significant attention during the 2024 U.S. presidential election, attracting billions of dollars in trading volume as users placed bets on election outcomes. The surge in activity helped bring prediction markets into mainstream public discussion and increased interest from both technology and financial companies.

This is not Meta’s first attempt at crowd-based forecasting. In 2020, the company launched Forecast, a platform that encouraged users to predict developments related to current events and emerging trends during the COVID-19 pandemic. The service was discontinued in 2022.

The growing popularity of prediction markets has prompted many companies to explore similar offerings. Crypto-focused firms including Coinbase (NASDAQ: COIN) and Kraken have examined opportunities in the space, while brokerage platform Robinhood (NASDAQ: HOOD) has introduced event contracts tied to political and economic outcomes.

Despite increasing adoption, prediction markets continue to face regulatory challenges. Critics argue that contracts linked to elections, geopolitical events, and other sensitive topics can resemble gambling rather than legitimate financial products. Regulators have also expressed concerns regarding market manipulation, insider information, consumer protection, and the possibility that participants could profit from events they may influence.

In the United States, the Commodity Futures Trading Commission (CFTC) has repeatedly examined whether certain event contracts provide valid hedging functions or fall under prohibited gaming activities. As Meta moves forward with Arena, the company may face similar regulatory questions while seeking to capitalize on the growing demand for prediction market platforms.