Meta is gearing up to introduce a new app focused on prediction markets, aiming to position itself against competitors such as Kalshi and Polymarket in a rapidly expanding market that some analysts predict could reach a staggering $1 trillion in value over the next few years.
According to two employees who spoke on condition of anonymity, Meta CEO Mark Zuckerberg has directed a team to create a standalone application named Arena. This platform will enable users to make predictions about various real-world events. Initial reports about Meta's venture into prediction markets were first highlighted by The New York Times.
NPR has obtained previously unshared internal documents that outline Meta’s initiative. In contrast to other platforms that involve real monetary betting, this new app will provide users with a "daily virtual allotment" of "play money" for making bets on anticipated outcomes of future events.
On existing prediction market platforms like Kalshi and Polymarket, traders are currently betting billions weekly on a diverse range of topics, from expected Rotten Tomatoes scores for upcoming films to geopolitical events. While the specific topics for Arena have not been confirmed, internal documents suggest that artificial intelligence will play a crucial role in shaping the app’s offerings.
Currently referred to by code names such as "Antwerp" and "FBForecast," the app will utilize Llama, Meta’s advanced language model, to automatically generate questions based on trending subjects. Additionally, the AI will provide "personalized market recommendations" to users who download the application. The AI system will also have the final authority over market resolutions, determining the outcome of predictions—similar to how transactions are assessed on Kalshi and Polymarket. This AI-guided process is expected to operate in "near real-time," as per the details within the documents.
Previously, Meta launched an application known as Forecast in 2020, which allowed users to predict global events, including projections related to the pandemic. However, this app was decommissioned two years later due to the high operational costs associated with manually curating questions. The new app is described as a "rebuild" of the old one.
Once a prototype is developed, Meta employees will test the app prior to its official release on both iPhone and Android platforms, although a specific launch date remains undisclosed.
Meta has chosen not to comment on the development.
Creating a prediction market that does not involve real financial stakes may seem unconventional, especially since the potential for profit has attracted millions to platforms like Kalshi and Polymarket. However, gaming lawyer Daniel Wallach, who closely monitors the prediction market sector, suggests that this approach may give Meta additional time to secure licensing approvals from federal regulators and navigate the murky legal landscape surrounding prediction markets.
"We're clearly in legal limbo," Wallach remarked, highlighting the over 30 pending lawsuits regarding the legality of these markets, adding that a definitive answer might not be available for a year or two.
With Meta's entrance into the prediction market space, it becomes the largest Silicon Valley entity to venture into this area, despite ongoing concerns regarding market manipulation, insider trading, and the potential consequences of these markets on reality.
The prediction market industry has garnered support from the Trump administration as officials seek to revamp federal regulations governing these platforms, which were largely overlooked by regulators for many years.
"The prediction markets of today are a novel creation that only arrived at the dawn of the second Trump administration," Wallach said. He noted that this evolution has led to numerous legal disputes regarding the intentions of Congress concerning oversight by the Commodity Futures Trading Commission (CFTC), the agency responsible for regulating these platforms.
Meta is the latest innovator looking to capitalize on the increasing interest in prediction markets. Established sports betting platforms, including DraftKings and FanDuel, have also launched their prediction market services, while Trump’s Truth Social has announced similar plans. In total, over 70 other companies have initiated prediction market projects, as reported by Event Horizon, a newsletter tracking the sector.
With more than 3 billion users engaging with at least one of Meta’s applications each day—including Facebook, Instagram, WhatsApp, and Threads—the company has faced challenges in successfully launching new standalone apps.
