Meta develops prediction market app "Arena," targeting Polymarket and Kalshi.

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Meta is betting on the emerging field of prediction markets.

On June 23, according to The New York Times, the social media giant is secretly developing a prediction market app called "Arena," directly targeting Polymarket and Kalshi, in an attempt to get a share of this rapidly growing field fueled by the 2024 U.S. presidential election.

According to sources cited in the report, the product is currently classified internally as an "experimental project," but at the same time, it is also a "top priority" task. Arena will operate independently of Facebook and Instagram, allowing users to make predictions on future events in politics, sports, entertainment, and international affairs. Unlike platforms such as Polymarket, Arena may initially use a video game-like points system rather than real money, but Meta has not ruled out the possibility of introducing real-money betting in the future.

Analysts point out that Arena's entry reflects a broader industry trend toward prediction markets. Mainstream trading platforms such as Coinbase, Kraken, and Robinhood have all launched event contract products, and Meta’s move is aimed at seizing a share of this rapidly expanding market. However, uncertainties remain around regulation, and the legal definition of such contracts by the U.S. Commodity Futures Trading Commission (CFTC) is still unresolved.

The Polymarket Effect: Prediction Markets Enter the Mainstream

The development background of Arena is closely linked to the explosive growth of prediction markets in recent years.

During the 2024 U.S. presidential election, crypto-based prediction platform Polymarket saw a historic breakthrough—a large number of traders flocked to the platform to bet on election outcomes, pushing transaction volume to billions of dollars and elevating prediction markets from niche tools to important references in mainstream political discussions. This phenomenon attracted strong attention from the entire tech and financial industry.

Almost at the same time, crypto-native companies such as Coinbase and Kraken explored prediction market opportunities, and retail broker Robinhood also launched event contract products tied to political and economic outcomes. Prediction markets are moving from the periphery to the center.

Arena Product Design: Points First, Real Money as a Future Option

According to reports, Arena intends to differentiate its product from existing competitors.

The app will operate independently from Meta’s Facebook and Instagram, and will cover prediction fields such as politics, sports, entertainment, and international affairs.

In terms of monetization, Arena is expected to use a video game-like points system initially, rather than direct cash betting—this design may help to avoid direct regulatory conflicts. However, Meta has not ruled out the possibility of introducing real money in the future, thereby keeping options open for the product's commercialization path.

It is worth noting that this is not Meta's first foray into the prediction field. In 2020, Meta launched a similar product called "Forecast" to encourage users to make predictions about current affairs and emerging trends at the start of the COVID-19 pandemic, but the product was ultimately shut down in 2022.

In addition, Meta previously ambitiously promoted the stablecoin project Libra in an attempt to enter the payments wallet market, but that too ended in failure, with Zuckerberg announcing its abandonment in 2022. In some ways, Arena can be seen as a continuation and restart of those earlier attempts.

Regulatory Cloud: Legal Boundaries of Prediction Markets Remain Unclear

The report notes that the rapid expansion of prediction markets has also drawn increasingly close scrutiny from regulators.

Critics argue that contracts tied to elections, geopolitics, or other sensitive events blur the line between financial instruments and gambling. Regulatory concerns cover many dimensions: risks of market manipulation, abuse of insider information, lack of consumer protection, and the possibility that participants could profit from events they themselves are able to influence.

In the United States, the CFTC has long faced a core legal dilemma: do certain event contracts serve a legitimate hedging function, or do they constitute gambling strictly prohibited by law? This question remains unresolved. For Meta, the initial use of points rather than real money may be precisely an effort to find a safer foothold amid regulatory gray areas.

Whether Meta can break through in this opportunity- and risk-filled field by leveraging its huge user base and platform resources remains to be seen.

Risk Warning and DisclaimerThe market has risks, and investment should be cautious. This article does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at your own risk. ```