Meta developing points-based prediction market app: report
Meta is reportedly developing a new prediction markets app called “Arena,” planned to operate on a points system, rather than involving real money such as platforms from Kalshi and Polymarket.
The news was initially reported by the New York Times, with reports indicating Meta founder Mark Zuckerberg is planning to operate the platform as its own product, rather than being part of Meta’s social media platforms Facebook, Instagram and WhatsApp.
The points system that “Arena” is expected to use is likely to mimic those used in online games, rather than real money wagering platforms.
Meta is reportedly looking at bringing in its existing audience to the platform, leveraging its social media sites which clock an average of 3.56 billion visitors a day.
News of the project has also had an impact on the shares of companies with a stake in the prediction markets sector.
According to CNBC, DraftKings shares fell almost 2% on the news. DraftKings stock peaked earlier in the month, rising 11% after the operator announced in a SEC filing that its prediction market platform, DraftKings Predicts, generated US$3.1 billion in total annualized trading volume.
Shares of Flutter Entertainment, owner of US sportsbook FanDuel, and Robinhood also dropped after the “Arena” news came out.
Prediction markets have expanded dramatically in recent years, allowing users to trade contracts linked to the outcomes of real-world events. Combined trading volume in the prediction markets sector has already passed US$130 billion this year, after reaching US$50 billion in 2025.
Alongside the growth, the prediction market sector has drawn increasing regulatory attention, with various legal battles happening between the sector and US states after regulatory bodies accuse prediction markets of offering illegal gambling.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
Verticals:
Sectors:
Topics:
Dig Deeper
Related stories
The Backstory
A consumer tech giant enters a contested category
Meta’s reported work on a points-based prediction market app would put one of the world’s largest consumer technology companies into a sector already testing the boundaries between financial trading, gambling and social entertainment. The project, reportedly called Arena, is notable not because it appears to involve real-money wagering but because Meta has the scale to normalize prediction-style products for a mass audience.
That distinction matters. Existing platforms such as Kalshi, Polymarket and Robinhood have grown by allowing users to take positions on real-world outcomes, including elections, economic indicators and sports. Meta’s apparent plan to use points rather than cash would place Arena closer to gaming mechanics than regulated event-contract trading. Still, the company’s reach across Facebook, Instagram and WhatsApp could make the format familiar to users who have never opened a sportsbook or traded a futures contract.
The market reaction to the report reflected that potential. Shares of sports betting and trading-adjacent companies have become increasingly sensitive to prediction market developments, particularly as investors debate whether these products are a complement to regulated sports betting or a substitute for it. Meta’s involvement could widen that debate by introducing a noncash model that avoids some immediate regulatory triggers while still training users to forecast outcomes and compete around events.
Younger users and illegal-betting states shaped early demand
The current prediction market audience has been concentrated among younger and more active digital bettors, according to a Truist Securities survey reported in an analysis of prediction market demographics. Just 7% of users were older than 49, while the largest group was 30 to 39. The survey also found substantial overlap with online sports betting and daily fantasy sports, underscoring why established sportsbook operators are paying close attention.
Geography has been central to the sector’s rise. The Truist survey found that users were heavily represented in states where traditional online sports betting remains unavailable, including California and Texas. That has made prediction markets attractive to operators seeking customers in large untapped states. It also has made them politically sensitive, because state gambling regulators view sports event contracts as a potential way around licensing systems, taxes and consumer protections.
Sports has become the dominant draw. The survey found 76% of users favored sports contracts, ahead of economic indicators, elections and corporate developments. NFL markets were especially popular. That sports skew has pulled prediction platforms away from their original public-policy and financial-market framing and closer to the most lucrative part of the U.S. wagering business.
For Meta, that user profile cuts two ways. A points-based app could appeal to younger audiences comfortable with gaming-style rankings and virtual rewards. But even without real money, a product built around predicting sports, politics or cultural events could attract scrutiny if regulators or leagues believe it encourages gambling behavior or creates integrity risks.
Sports contracts pushed the legal fight into the open
The legal clash has escalated as prediction markets expanded from elections and macroeconomic events into sports. The Commodity Futures Trading Commission has taken the position that federally regulated event-contract markets fall under its jurisdiction, while several states argue that contracts tied to sports outcomes amount to illegal gambling when offered without state approval.
That dispute sharpened when the CFTC sued Wisconsin over its attempt to stop federally regulated prediction markets. Wisconsin had filed civil suits against Kalshi, Polymarket, Crypto.com, Robinhood and Coinbase, alleging violations of state gambling laws. The CFTC responded by asking a federal court to block state enforcement, arguing that Congress gave the agency exclusive authority over derivatives and event contracts traded on designated contract markets.
The Wisconsin case followed similar conflicts involving New York, Arizona, Connecticut, Illinois and other states. The result is a fragmented legal landscape in which platforms claim federal preemption and states seek to preserve authority over gambling within their borders. Until courts resolve that divide, operators face uncertainty over whether sports event contracts are financial instruments, wagers or something in between.
Meta’s reported points model may be designed in part to avoid that fight. If users cannot win or lose money, the product may sit outside many gambling statutes. But regulators have shown a willingness to scrutinize adjacent products that mimic wagering behavior, especially when they involve sports outcomes, prizes, leaderboards or potential conversion paths to paid activity.
Nevada drew a line for sportsbook operators
No state has sent a clearer warning than Nevada, where the Gaming Control Board accepted the license surrender of FanDuel and allowed DraftKings to withdraw pending applications after determining their planned involvement in prediction markets was incompatible with Nevada gaming law. The regulator’s stance was detailed in the account of FanDuel and DraftKings exiting Nevada amid the crackdown.
Nevada regulators said sports event contracts and other outcome-based contracts are wagering under state law. The board also warned licensees that partnerships or associations with firms offering such contracts could affect their standing. That put sportsbook operators in a difficult position: pursue national prediction market opportunities under federal market rules or preserve access to the most influential state gambling jurisdiction.
The pressure on DraftKings and FanDuel highlights why the sector matters beyond pure trading volume. The largest sportsbook operators see prediction markets as a way to reach users in states without online sports betting and to build customer databases ahead of possible legalization. State regulators, however, see that strategy as a challenge to their authority and to the economic model built around licensing fees, suitability reviews and gaming taxes.
Meta is not a licensed sportsbook, and a points-based app would not place it in the same regulatory posture. But Nevada’s action shows how quickly regulators may respond when prediction-style products are perceived as sports betting by another name. A consumer platform with billions of daily users would likely invite even closer examination if Arena evolves beyond casual play.
Kalshi’s NFL growth changed investor assumptions
Investor anxiety intensified after Kalshi expanded deeper into football. A report on the market reaction to Kalshi’s NFL parlay launch found that the new parlay feature was still small relative to broader platform activity, but its symbolism was powerful. Parlays are among the most profitable products for sportsbooks, and Kalshi’s move suggested prediction markets could replicate core betting formats.
The early numbers were mixed. Kalshi’s parlay volume reached $6 million in its first week and $10.1 million the next, a small share of overall trading. Yet the platform’s NFL contracts had already drawn more than $1 billion in September volume, with college football adding hundreds of millions more. Sports reportedly accounted for nearly 90% of Kalshi’s activity during that period.
That shift helped explain why shares of DraftKings and Flutter have moved sharply on prediction market news. Even if current volumes remain modest compared with regulated sportsbooks, the growth rate and national accessibility of event contracts create a perceived threat. A platform that can offer sports-related markets across many states without traditional sportsbook licensing could pressure customer acquisition, margins and lobbying strategies.
Meta’s reported entry adds a different kind of competitive risk. Arena may not take wagers, but it could capture time, attention and habit formation around predictions. In digital markets, those advantages can be valuable even before monetization is clear.
Leagues are treating the products as betting
Sports leagues have started to align more closely with state regulators than with the platforms’ financial-market framing. The NFL formally told players and league personnel that prediction markets are treated as sports betting, prohibiting participation under league policy. League officials cited concerns that some platforms lack the information sharing, integrity monitoring and market restrictions required of licensed sportsbooks.
The NFL’s position is consequential because sports leagues were central to the legalization and regulation of online sports betting after the Supreme Court struck down the federal sports wagering ban in 2018. If leagues view prediction markets as insufficiently regulated, they may press lawmakers and regulators to impose stricter rules, particularly for player props, injury-related markets and other outcomes that could be influenced by insiders.
For Meta, the league response is a reminder that even free-to-play or points-based prediction products can become sensitive if they involve live sports and player-specific outcomes. A platform operating at Meta’s scale could raise questions about data use, youth exposure, advertising practices and whether virtual competition serves as a gateway to real-money products elsewhere.
The broader stakes are now clear. Prediction markets are no longer a niche corner of financial speculation. They sit at the intersection of sports betting, fintech, social media and gaming. Meta’s reported Arena project would not resolve the legal fight over real-money event contracts, but it could accelerate the cultural adoption of prediction-based entertainment just as regulators, leagues and incumbents are still deciding where the boundaries belong.
