- Meta is developing a prediction markets app called Arena, not allowing real money betting.
- The app aims to capitalize on growing interest in prediction markets similar to Polymarket and Kalshi.
- Concerns arise over potential addictive app design amid rising online gambling rates.
- Meta’s past attempts in this space have seen mixed success, with the company previously closing a similar app in 2022.
- European countries are tightening regulations on unlicensed prediction markets, impacting platforms like Polymarket and Kalshi.
Meta has set its sights on the emerging landscape of prediction markets with the development of its new app, Arena. As reported by The New York Times, this initiative reflects a strategic pivot by the social media giant to tap into an evolving segment of online engagement. Internally labeled as ‘Arena,’ the app is expected to diverge from Meta’s well-known social media platforms—such as Instagram, WhatsApp, and Facebook— operating independently as it aims to gather a significant audience from its existing user base of over 3.5 billion.
Unlike conventional betting platforms, Arena will reportedly forego real money transactions in favour of a points-based system. Although the possibility of incorporating real-money wagering isn’t completely off the table, the emphasis on a points-based model could serve as a mitigating factor against the rising concerns surrounding online gambling. Indeed, the soaring popularity of prediction markets, as evidenced by platforms like Kalshi and Polymarket, has raised alarms among experts. These platforms have been associated with a sharp rise in online gambling, spurred by extensive advertising during sports events and public spaces.
Recent figures indicate that Kalshi and Polymarket amassed approximately $24 billion in global trading volume in just April of this year, a staggering contrast to the average $14 billion wagered monthly through legal sports betting in the U.S. in 2025, according to Pew Research Center. This gateway into gambling behaviour poses intricate challenges. As noted by Mike Proulx, VP Research Director at Forrester, whether these prediction market apps are classified as investment tools or gambling platforms, they may share similar addictive traits—an unsettling prospect for a company already grappling with scrutiny over its product designs.
Moreover, concerns regarding the app’s accessibility to underage users loom large. While Meta has not publicly stated the number of underage users on its platforms, estimates from the EU suggest that around 10-12% of children under 13 engage with Instagram or Facebook. This issue is compounded by the European Commission’s findings that the social media giant has not sufficiently safeguarded younger users against risks on its platforms.
Historically, Meta’s ventures into expanded offerings have encountered mixed outcomes. Past attempts to create new social media applications across various domains—music, podcasts, and travel—failed to achieve significant traction. Moreover, the company had previously experimented with prediction markets in 2020 via an app named ‘Forecast,’ which was quietly shut down in 2022, raising questions about Arena’s long-term viability.
Meta’s approach of capitalizing on the burgeoning interest in prediction markets resembles a familiar strategy for the tech behemoth—replicating successful concepts observed within the marketplace. With prediction markets gaining momentum, particularly among younger demographics, it marks another area where Meta seeks to capture engagement. Nevertheless, history suggests that entering a market before establishing its regulatory framework could lead to complications for both the company and its audience.
On the international landscape, regulatory scrutiny is mounting. Several European nations, including Germany, Belgium, and Spain, have intensified efforts to clamp down on unlicensed prediction market platforms, with temporary blocks issued against Polymarket and Kalshi last month. This tightening of regulations could complicate Arena’s potential launch and operational framework, demonstrating the balancing act Meta faces as it ventures into this high-stakes domain.
As this ambitious project unfolds, it’s worth noting that the European gambling market is among the largest in the world, with an estimated revenue surpassing €20 billion in 2022. This places significant pressure on companies like Meta to navigate not just market demand, but also the intricate web of regulations governing online betting and gambling. As the landscape shifts, the efficacy and ethical implications of such platforms will undoubtedly dominate the discourse in both tech and regulatory circles.
