Zuckerberg Steers Meta Toward Prediction Markets With Standalone App 'Arena'

Meta is reportedly developing an experimental prediction-markets app, codenamed Arena, as CEO Mark Zuckerberg looks to plant a flag in one of the internet's fastest-growing categories — a move that immediately spooked traditional sports-betting stocks.

The project is being built by a small internal team and would run independently of Facebook, Instagram, WhatsApp and Messenger, according to reports citing employees familiar with the plan — while still drawing on Meta's enormous existing audience. Per The New York Times, Arena would likely lean on a points-based system resembling video-game mechanics rather than real-money betting, though insiders say cash-based wagering at a later stage hasn't been ruled out. Meta declined to comment.

Meta looks beyond its social platforms

The effort fits Zuckerberg's long-running habit of spotting shifts in online behavior and chasing the products that ride them. With Facebook and Instagram now mature and the company reporting 3.56 billion daily active people across its apps in April, executives are hunting for fresh growth lanes. Arena is reportedly one of several experimental bets — another, internally called Meta Photos, aims to generate new kinds of media using AI. Insiders describe Arena as significant but caution that development is ongoing and the app may never launch publicly.

It wouldn't be Meta's first attempt at the genre. Back in 2020 the company launched Forecast, a crowdsourced forecasting app released early in the pandemic that let users earn points for predicting future events. It was shut down in 2022.

A booming industry draws new competitors

Prediction markets have rocketed from niche curiosity to serious online business. Platforms like Polymarket and Kalshi let users speculate on everything from sports to politics to economic decisions, and together generated roughly $50 billion in trades during 2025 — with volume this year already topping $130 billion. The category gained huge visibility around the 2024 U.S. election and has since matured into a broader financial product, with brokerages such as Robinhood and Interactive Brokers adding event-based contracts. Research firm Bernstein projected in April that the space could reach $1 trillion in annual trading volume before the decade is out.

That momentum has pulled in players from every direction: sports-betting operators DraftKings and FanDuel, crypto exchange Gemini, and even Trump Media & Technology Group have all moved toward the category. Operators typically earn revenue from transaction fees on trades — a potentially lucrative model as participation climbs.

Regulatory questions remain in focus

The rapid expansion has also drawn sharper regulatory scrutiny. Because users can trade on the outcomes of almost any event, officials have flagged concerns about the misuse of confidential information — and recent cases have sharpened those worries. In April, federal prosecutors in New York charged a member of the U.S. Special Forces with using classified information tied to an operation targeting Venezuelan President Nicolás Maduro to place prediction-market bets, allegedly earning more than $400,000.

Oversight largely sits with the Commodity Futures Trading Commission, which reports indicate has seen staffing decline even as the market has ballooned. Observers have also pointed to oddly timed trades around major policy announcements, raising questions about whether some participants traded on information the public didn't have.

Investors react to Meta's plans

The mere report of Meta's interest moved markets. Shares of DraftKings fell more than 2% to a session low before closing down about 2%, while FanDuel parent Flutter Entertainment dropped nearly 2% before recovering to finish slightly higher. Robinhood, which offers access to prediction-market contracts, also slipped after the initial report.

Investors increasingly see prediction markets as a competitive threat to traditional sports betting, and the stock reaction reflected fears that wider event-based trading could reshape parts of the online wagering industry. For Meta, Arena is another bid to gain a foothold in a fast-growing corner of the internet — and a clear signal that Zuckerberg views prediction markets as a trend worth chasing.