As per reports, Mark Zuckerberg, CEO of Meta, has instructed the development of a new prediction market application like Polymarket and Kalshi to take their share of the market and compete against them.
The new application, internally referred to as Arena, will be developed as an independent, stand-alone application — or app — apart from Facebook, Instagram, WhatsApp and Messenger. Arena will start up as a points system based app where users on the app make predictions about future events, but Meta can decide to add cash-based betting at a later time.
The reason for Zuckerberg to release this application is part of his larger strategy to understand and innovate products for people based on where they are headed in new forms of online behavior. In addition to this Arena app, Meta continues to be focused on developing many other independent apps, including new AI resource-based projects.
This will not be the first effort by Meta to explore prediction markets, as they attempted to launch a crowdsourced prediction platform named Forecast in 2020. Forecast was also a points-based system for users to make predictions about future events; however, it was closed in 2022.
Regulators are concerned as to the rapid growth of prediction markets.
Meta’s reported plans have already drawn criticism from US Senator Richard Blumenthal, who wrote:
Meta copied slot machines to addict kids to Instagram. Now Zuckerberg is turning his company into a prediction market.
He also accused the company of “profiting from addiction” and called for stronger regulation.
Regulators are unsure how to properly classify these types of platforms and whether they are considered financial products or gambling services; they have also raised concerns about the potential for insider trading and market manipulation on these types of platforms.
For now, Arena remains an internal project and may not be launched.
