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You might think Mark Zuckerberg is busy building smart glasses and AI assistants. According to a report from The New York Times, however, Meta is quietly exploring another booming sector: prediction markets.
The company is reportedly developing an internal project known as “Arena,” a standalone app inspired by prediction market platforms such as Polymarket and Kalshi.
Meta declined to comment on the report, and sources cited by The New York Times said the project remains under development and could still change significantly before launch.
According to the report, Arena would allow users to predict the outcomes of sports events, political races, entertainment awards, and other real-world events. The app is expected to launch with a points-based system rather than real-money wagering, although Meta has reportedly not ruled out introducing monetary incentives in the future.
For the gambling industry, the story is interesting for a different reason.
Meta may have seen this movie before.
Facebook Helped Create Social Casino Gaming
Long before prediction markets became mainstream, Facebook was the platform that helped launch the social casino industry.
Companies such as Zynga built enormous businesses by offering casino-style games using virtual currency rather than real-money gambling. What started as a niche category eventually became a multi-billion-dollar global market.
Facebook benefited from the traffic and engagement, but it never became a major operator itself.
Looking back, one could argue that Meta helped create an entire industry without ever truly owning it.
That experience may be relevant today.
Prediction Markets Are Having Their Moment
Prediction markets have exploded in popularity over the last two years.
Platforms such as Polymarket and Kalshi allow users to trade contracts tied to future outcomes, ranging from election results and economic data releases to sports championships and entertainment awards.
According to The New York Times, the two platforms generated a combined $50 billion in trading volume during 2025. In 2026, that figure has already surpassed $130 billion.
The growth has attracted interest from sportsbooks, crypto exchanges, and fintech companies eager to participate in what many see as one of the fastest-growing categories in digital entertainment.
Yet one group has largely stayed away: Big Tech.
The reason is not difficult to understand. Prediction markets remain politically sensitive and operate in a regulatory grey area that differs significantly across jurisdictions.
Historically, large technology companies have often allowed startups to test emerging markets before entering once demand becomes impossible to ignore.
Arena could be a sign that Meta believes that moment has arrived.
For Meta, prediction markets represent more than a potential betting opportunity. They are inherently social products that generate discussion, engagement, competition, and content around real-world events — exactly the kind of user behaviour Meta has built its empire around.
Not Meta’s First Attempt
This is also not the company’s first experiment with forecasting products.
In 2020, Meta launched Forecast, a crowdsourced prediction platform focused on future events during the COVID-19 pandemic. Users earned points rather than wagering money, and the project was eventually shut down in 2022.
While Forecast failed to gain traction, the market has changed dramatically since then.
Back then, prediction markets were largely a niche product. Today they are regularly discussed during major sporting events, elections, and even entertainment award shows.
Meta may also be able to leverage technology and lessons learned from Forecast, potentially shortening the development cycle for Arena.
The Biggest Challenge Is Regulation
The opportunity is obvious. The risks are equally clear.
Prediction markets have attracted increasing scrutiny from regulators concerned about insider trading, market manipulation, and the use of non-public information.
Unlike traditional sports betting, prediction markets often allow users to speculate on political developments, business events, and other information-sensitive outcomes.
The issue gained national attention earlier this year when U.S. federal prosecutors charged a member of the U.S. Special Forces with allegedly using confidential information to place bets related to a planned operation targeting Venezuelan President Nicolás Maduro. Prosecutors claim the individual generated more than $400,000 in profits through those trades.
The growing sector is primarily overseen by the Commodity Futures Trading Commission (CFTC), which has faced mounting pressure as prediction markets continue expanding into new categories.
A points-based model could help Meta avoid some of the immediate regulatory headaches. However, any future move toward real-money prediction markets would likely attract significant scrutiny from regulators and lawmakers.
Political Backlash Has Already Begun
Meta’s reported plans have already attracted criticism in Washington.
Senator Richard Blumenthal criticized the company following the New York Times report, arguing that Meta was moving from social media engagement toward encouraging speculative behaviour through prediction markets.
While criticism from lawmakers is hardly new for Meta, it highlights how politically sensitive the category has become as prediction markets move further into the mainstream.
A Signal to the Industry
Arena may never launch. Meta has a long history of experimenting with products that never make it to market.
But the fact that Zuckerberg is reportedly exploring prediction markets at all may be the biggest story.
For years, prediction market advocates have argued that the category would eventually become mainstream. If one of the world’s largest technology companies is now investigating the sector, it suggests that prediction markets are becoming too large for Big Tech to ignore.
And unlike the social casino boom, Meta may be looking for a way to capture more of the value this time around.
Whether Arena launches or not is almost secondary. The fact that Meta is reportedly exploring prediction markets at all may be the strongest signal yet that the sector is moving from niche product to mainstream digital entertainment.
