• Mark Zuckerberg has reportedly tasked a Meta team with developing Arena, a prediction markets app modeled after Polymarket and Kalshi.
• The app will initially use a points-based system instead of real-money wagering.
• Arena will operate as a standalone app independent of Facebook and Instagram.

Mark Zuckerberg has directed a small team at Meta to develop a new smartphone app focused on prediction markets, according to a Tuesday report by the New York Times.

Meta to begin plans for prediction market

The experimental project, internally known as Arena, would allow users to forecast outcomes across sports, politics, entertainment and current events.

Arena is being developed as a standalone app, separate from Meta's core platforms, including Facebook, Instagram, WhatsApp and Messenger. If launched, the app could potentially tap into Meta's ecosystem of more than 3.5 billion daily users to accelerate adoption.

Arena will initially use a points-based system similar to a video game rather than real-money wagering, although Meta has not ruled out introducing cash-based prediction markets in the future, according to the report.

The initiative reflects Zuckerberg's broader strategy of building standalone products around emerging online trends as growth opportunities within Meta's flagship social media apps become more limited.

The report mentioned that executives believe there is less room for major innovation inside Facebook and Instagram, prompting the company to pursue new consumer apps. Other projects currently under development include Meta Photos, an AI-focused media application.

Prediction markets gain momentum amid regulatory push

Meta's renewed interest comes as prediction markets have rapidly entered the mainstream. Platforms such as Polymarket and Kalshi have collectively processed billions in trading volume, with several companies, including Trump Media, exploring competing offerings. The sector has also continued to evolve beyond political and sports events.

Last month, Polymarket introduced markets tied to private companies, allowing users to trade on startup valuations, IPO timing and secondary-market activity. The offering, which uses Nasdaq Private Market data for resolution, is viewed as an emerging price-discovery tool for institutional investors.

At the same time, regulators are working to establish clearer rules for the fast-growing industry. Earlier this month, the Commodity Futures Trading Commission (CFTC) proposed amendments to Regulation 40.11 to create a formal framework for reviewing prediction market contracts.

The proposal focuses on contracts involving terrorism, assassination, war, gaming and activities that violate federal or state law, aiming to provide greater regulatory clarity as event contracts continue to expand across CFTC-regulated platforms.