WASHINGTON — Meta is developing a standalone prediction market application named Arena. This development follows Meta's earlier consideration of acquiring Kalshi, another prediction market startup.

Last year, Meta CEO Mark Zuckerberg met with Kalshi CEO Tarek Mansour to discuss a potential acquisition. These negotiations did not advance. Meta's internal documents indicate the Arena app will enable users to make predictions about future events.

The Arena app will utilize artificial intelligence systems to generate questions and determine outcomes. Users will wager "play money" on news events and online trends, and Meta's Arena will not accept bets using real money. In March 2026, Meta formed a partnership with Kalshi, allowing for the integration of Kalshi markets on Meta's Threads app.

Columbia University law professor Tim Wu commented on Meta's strategy. "Meta seems to clutch at every shiny object," Wu said. He added, "With the help of their advertising cash cow, they've been able to fail again and again without consequence." Wu also stated, "I can't imagine a casino app with fake money is going to be much of a thrill." He noted, "Meta looking to take over Kalshi fits in with the company's long-standing practices."

Meta previously acquired Instagram in 2012 and WhatsApp in 2014. The company has also acquired the AI wearable company Limitless and Moltbook, a social network for AI bots. Last year, the Federal Trade Commission alleged in a trial that Meta engages in a 'buy or bury' strategy. A judge ruled that Meta did not violate competition laws with its acquisitions of Instagram and WhatsApp. Federal Trade Commission lawyers are appealing that judge's decision.

The prediction market landscape has seen activity. Kalshi was valued at $2 billion in 2025 and $22 billion in its May 2026 funding round. In June 2025, approximately $28 billion was traded monthly on Kalshi and Polymarket. By June 2026, monthly trading volume on these platforms reached nearly $220 billion. Most of this growth in volume was driven by sports-related betting. Kalshi is overseen by commodities regulators in Washington, while Polymarket operates an overseas exchange.

Why It Matters

Meta's development of the Arena app and its prior interest in acquiring Kalshi indicate the company's entry into the prediction market sector. This move aligns with Meta's history of acquisitions, including Instagram and WhatsApp, which have faced scrutiny from the Federal Trade Commission regarding competition practices. The growth in prediction market trading volume, particularly in sports-related betting, marks increasing activity in this financial area.