Zuckerberg's New Bet: Prediction Markets, But Please Don't Call It Gambling 🎰

Meta is developing a prediction market application internally called "Arena," according to two employees familiar with the matter who spoke with the New York Times. The project, championed by CEO Mark Zuckerberg, would allow users to forecast outcomes across politics, sports, entertainment, and world affairs, positioning the Facebook parent to compete with established platforms Polymarket and Kalshi. The employees described the initiative as both experimental and a top priority within the company.

Unlike Polymarket and Kalshi, Arena would initially rely on a video game-like points system rather than cash wagers, though the employees said Meta has not ruled out eventually allowing real-money betting. The app will reportedly operate independently of Meta's existing platforms, Facebook, WhatsApp, and Instagram. Meta is expected to leverage its massive social networking audiences to drive adoption. As of March, Meta reported 3.56 billion daily users across its apps.

The Arena project revives elements of Meta's earlier Forecast app, launched in 2020 during the early stages of the Covid-19 pandemic, which encouraged users to predict current events and emerging trends. Meta shuttered Forecast in 2022. The renewed effort comes as prediction markets have surged in popularity following Polymarket's breakout success during the 2024 U.S. presidential election, when traders placed bets on electoral outcomes, driving billions of dollars in trading volume and elevating the sector into mainstream political conversation.

Nearly every major trading platform has since moved into the space. Crypto-native firms Coinbase (COIN) and Kraken have explored prediction market offerings, while retail brokerage Robinhood (HOOD) has introduced event-based contracts tied to political and economic outcomes. The Charles Schwab Corporation and Cboe Global Markets have also announced plans for their own prediction market products featuring S&P 500 contracts. Meanwhile, U.S. regulators including the Commodity Futures Trading Commission remain engaged in legal battles with state authorities over whether event contracts constitute gambling or legitimate financial instruments, with CME suing the CFTC over the regulation of these products and perps.

Meta's push into prediction markets follows a pattern of crypto-adjacent ventures, including its failed Libra stablecoin unveiled in 2019, rebranded to Diem and dropped in 2022. The company has reportedly invested $80 billion into Zuckerberg's metaverse vision and recently stopped creating new virtual reality experiences for Horizon Worlds. In April, Meta began allowing content creators in Colombia and the Philippines to receive earnings in USDC stablecoin directly to their crypto wallets, with some U.S. lawmakers expressing concerns about Meta's domestic stablecoin plans. The company reportedly planned to cut 10% of its staff in April amid a pivot to artificial intelligence, a move expected to affect about 8,000 people.