Meta develops prediction market app 'Arena' to challenge Polymarket and Kalshi

Mark Zuckerberg has directed Meta to develop a new prediction market application, reportedly named 'Arena', according to a report by The New York Times. The project is described as a top priority for the company, aiming to capitalise on Meta's extensive user base across Facebook and Instagram to compete with established platforms such as Polymarket and Kalshi.

The app is currently in an experimental phase. Initial reports suggest the platform may utilise a video-game-style points system rather than real money, potentially offering rewards such as stickers or badges. However, company insiders have stated that Meta has not ruled out the eventual use of real currency within the platform.

This initiative follows Meta's previous attempt in the sector, the 'Forecast' app, which operated from 2020 to 2022 before being discontinued. Forecast utilised a similar points-based system for users to make guesses about world events but did not gain significant traction before being shut down.

Polymarket and Kalshi are established competitors in the prediction market space, having been active for over five years and holding near-complete dominance of the industry. Meta would therefore face a significant challenge in gaining market share against these incumbents.

Meta has a documented history of developing features that follow the success of other platforms, including Instagram Stories, which followed Snapchat, and Facebook Reels, which came after TikTok. Other examples include Facebook Dating following Tinder and Threads following Twitter.

The final name of the application 'Arena' is based on reports and may change. It remains unclear whether the app will ultimately use real money or remain strictly points-based, as insiders have not confirmed the final monetisation model. The app may also remain in the experimental phase indefinitely and may never be publicly released.