Kalshi and Polymarket currently dominate the prediction market industry, but one of the wealthiest men on Earth wants to change the status quo. Meta is developing an experimental prediction app at the direction of CEO Mark Zuckerberg. While Kalshi and Polymarket are both billion-dollar brands, the already controversial prediction market could be turned on its head if the man controlling Facebook and Instagram gets his way.
What is Meta working on?
Zuckerberg has ordered a small team at Meta to “create a smartphone app similar to Polymarket and Kalshi,” according to The New York Times. The app is being referred to within Meta as Arena and “would function independently from Meta’s social networking apps, which include Facebook, Instagram, WhatsApp and Messenger.” Meta hopes to “grow the app by leveraging its large social networking audiences and directing them toward using it.”
As with the other major prediction apps, users will be allowed to “guess the outcome of real-world events,” said NPR. But at least for the time being, Arena would have one big difference from most prediction platforms: Unlike Kalshi and Polymarket, users on Meta’s app “would not wager money, and the app would probably rely on a video-game-like points system instead,” said the Times. However, Meta has “not ruled out the eventual use of real money betting.”
There will also reportedly be an AI aspect to Meta’s app, as it will use “Llama, the company’s large language model, to automatically generate questions from trending topics,” said NPR. Arena is not the first time Meta has tried to get into the prediction marketplace; in 2020, the company “released an app called Forecast, a crowdsourced prediction market app where people could guess about what might happen in the world, including predictions about the course of the pandemic.” The app did not take off and was shut down in 2022.
What does this mean for prediction markets?
Zuckerberg’s bet comes at a time when the industry is booming. Prediction markets “surged in popularity during the 2024 U.S. presidential election and have evolved into an asset class that lets investors wager on a variety of events, from monetary policy to sports tournaments,” said Reuters. The entire market could reach more than $1 trillion in value by 2030, according to wealth management firm Bernstein.
But the industry has also “drawn increasing scrutiny as well-timed trades ahead of President Donald Trump’s major policy surprises have potentially led to millions of dollars in profits for unknown traders,” said Reuters. It is possible that a prediction market app from Meta could create similar scrutiny. Zuckerberg doesn’t seem to mind this, though, and probably wants to follow the lead of “other social media sites” like X, which “forged a partnership with Polymarket last summer” and “have sought to capitalize on the industry,” said TechCrunch.
Adding another prediction tool to the mix could also further complicate legal proceedings, which are already fairly complicated. States have “begun to sue prediction markets over what they allege are violations of gambling laws,” said TechCrunch. In yet another twist, the “current administration, which is decidedly pro-prediction market, has sued states for having sued prediction markets.” But even as these cases progress, the industry has continually “fueled big profits.”
Zuckerberg wants to position himself as a competitor to Kalshi and Polymarket
