Meta, the company behind the social media platforms Facebook, Instagram, and WhatsApp, is reportedly developing a prediction market app that could rival leading platforms Kalshi and Polymarket. The project is known internally as Arena and was commissioned by CEO Mark Zuckerberg.
Meta has not officially confirmed the project, but internal sources told the New York Times that Zuckerberg recently dispatched a “small team” to start developing an app similar to Kalshi and Polymarket.
Focus on Points Instead of Cash
One difference in the preliminary version of the app is that, unlike other major prediction markets, it would allow users to trade in points rather than directly in dollars. Sources said that the company has not ruled out expanding this to real money.
It is unclear how users would acquire these points. If they could purchase them directly for real money, it would appear to follow the sweepstakes casino dual-currency model, which has increasingly been prohibited nationwide.
Laws banning sweepstakes casinos often rely on the dual-currency model to prohibit users from playing casino-style games. They largely exclude prediction markets, which claim to be legal as financial instruments rather than betting platforms.
The project is one of several that Meta is experimenting with to expand its business. There are no immediate plans to apply for a license from the Commodity Futures Trading Commission (CFTC), the regulator of prediction markets.
There is also no information about the types of markets that would be offered on the platform, or whether it would allow users to predict the outcomes of sporting events.
Meta Facing Lawsuit Over Illegal Gambling Promotions
The news of Meta developing a prediction market platform came in the same week that the company was sued by a group of gambling companies in the Netherlands.
Trade association VNLOK, which includes licensed gambling companies such as Bet365 and Leo Vegas, claims Meta facilitates illegal gambling through advertising on Facebook and Instagram.
“This is not only an economic problem, but above all a major risk to consumer protection. Illegal providers do not adhere to rules regarding addiction prevention and actively target vulnerable groups such as minors and problem gamblers,” says VNLOK Chairman Björn Fuchs in a press release.
VNLOK claims that Meta has no system to stop illegal gambling companies from advertising on its platforms, but relies on retroactive reporting from users.
“That is like trying to mop up water with the tap still running,” says VNLOK. “Illegal providers keep returning with new advertisements.”
Dutch gambling regulator, the Kansspelautoriteit (KSA), says it filed thousands of complaints to Meta over the presence of illegal gambling promotions last year.
A report last year claimed Meta generates $16 billion per year through promoting illegal gambling, scams, and banned products. This makes up around 10% of its total revenue.
A Meta spokesperson told me that, “We aggressively fight fraud and scams because people on our platforms don’t want this content, legitimate advertisers don’t want it, and we don’t want it either.”
Prediction Market Launch Likely to Face Legal Challenges
Meta has also had to pay heavy penalties this year in several judgments ruling that its practices fail to protect minors. It paid $4.2 million in a landmark judgment in California in March, brought by a woman who claimed they encouraged her to become addicted to social media.
In the same month, a court in New Mexico ordered the company to pay $375 million for misleading users about the safety of its platforms for children.
Last month, the company agreed to pay a further $9 million to Kentucky schools over claims it fueled a student mental‑health crisis.
Kentucky also filed a lawsuit against Kalshi and Polymarket last week. Given the litany of legal actions against operators, Meta’s launch of a similar app would likely face strong opposition.
