Norman Simpson
Meta CEO Mark Zuckerberg has directed a small internal team to build a prediction markets app called Arena, a move that rattled shares of DraftKings and Robinhood when the plans surfaced publicly on Tuesday.
At a Glance
- The app, known internally as Arena, would launch with a points-based system rather than real money wagering.
- Meta's 3.56 billion daily active users across its platforms would serve as the primary audience pipeline.
- DraftKings fell as much as 2% on the news; Robinhood and Flutter Entertainment also moved lower.
- Combined trading volume on Kalshi and Polymarket has surpassed $130 billion so far in 2026.
- This is Meta's second attempt at prediction markets, following the short-lived Forecast app launched in 2020.
What Arena Is and How It Would Work
Sources familiar with the matter told The New York Times, which first reported the story, that Arena would operate as a standalone product, kept separate from Facebook, Instagram, WhatsApp, and Messenger. Meta declined to comment on the plans.
At launch, real money betting would not be on the table. Instead, Arena would run on a points system similar to what players earn in video games. That said, the door to eventual cash wagering has not been closed. The experimental app is described by insiders as a top priority despite its early stage.
Meta's reach is the obvious weapon here. The company's family of apps collectively draws 3.56 billion people every day, a scale that no prediction market startup can match. Funneling even a fraction of that audience into Arena would immediately make it a formidable entrant in the space.
Market Reaction and What It Means for Rivals
DraftKings dropped as much as 2% after the news broke before paring losses to roughly 1%. Flutter Entertainment, the parent company of FanDuel, also slipped, though it managed to stay in positive territory for the day. Robinhood, which gives users access to event contracts from several prediction market platforms, fell as well.
Investor anxiety in this corner of the market is not new. The rise of prediction market platforms trading sports-related event contracts has pressured both DraftKings and Flutter for most of the past year, raising questions about what continued growth in that category means for traditional sports betting operators. Meta's entry puts a much larger shadow over that concern.
Trump Media and Technology Group has also announced its own prediction market ambitions, meaning legacy operators now face competitive pressure from multiple directions at once.
Meta's First Attempt at Prediction Markets
Arena would not be Meta's first swing at this concept. In 2020 the company launched Forecast, an app that let users predict outcomes for real world events, including the early trajectory of Covid-19, using a points-based currency rather than real money. Meta shut Forecast down in 2022.
The landscape has changed dramatically since then. Combined trading volume on Kalshi and Polymarket reached $50 billion last year and has already blown past $130 billion in 2026 alone. That growth has pulled in established sports betting operators and drawn scrutiny from federal investigators.
Regulatory Cloud Hanging Over the Sector
Congressional investigators opened an inquiry into both Kalshi and Polymarket on insider trading grounds. Separately, federal prosecutors brought charges in April against a U.S. Special Forces soldier accused of exploiting knowledge of a classified military operation to place bets on Polymarket, allegedly collecting more than $400,000 in the process.
Meta Photos, an AI-driven app designed to produce new media formats, is another standalone experimental product the company has in development alongside Arena, suggesting the company is running several of these parallel bets simultaneously.
Frequently Asked Questions
Will Arena allow real money betting?
Not at launch. The app is planned to use a points-based system like those found in video games. Real money wagering could come later, but no timeline has been announced.
How does Arena differ from Meta's previous prediction market app?
Forecast, launched in 2020 and shut down in 2022, also used a points-based format for predicting world events. Arena is described internally as a higher priority and would operate as a fully standalone product separate from Meta's main social apps.
Why did DraftKings and Robinhood stocks fall on this news?
Meta's enormous user base makes Arena a potential threat to existing prediction market and sports betting platforms. Investors reacted to the possibility that Meta could draw users away from competing services.
How large is the prediction markets sector right now?
Trading volume across Kalshi and Polymarket hit a combined $50 billion in 2025 and has already exceeded $130 billion in 2026, reflecting rapid growth in the category.
Where the Prediction Market Race Goes From Here
Meta's entry into prediction markets with a 3.56-billion-user runway changes the competitive math overnight. The sector already had momentum, money, and regulatory heat before Tuesday. Now it has one of the world's largest technology companies pointing its full social graph at it, and the startups that built this market from scratch are no longer the biggest names in the room.
