A report published by the New York Times Tuesday says that Meta CEO Mark Zuckerberg has tasked developers with creating a prediction market app for mobile devices. Code-named “Arena,” the project – if launched – would operate independently from Facebook and Instagram, according to the report.
The NYT goes on to say that the app would most likely rely on a points-based system that is more akin to a video game. But the potential for the “Arena” project to carry out real money transactions wasn’t ruled out by the two employees who spoke with the news outlet.
The most recent estimates signal that Meta has over 3.5 billion active users per day, a number that dwarfs the “DAUs” of all prediction markets combined (CFTC regulated or otherwise). Approximations for Kalshi’s “Daily Active Users” are posted at 100,000 while Polymarket has about 150,000 DAUs globally.
Instant access to billions of potential “Arena” users would, in theory, instantly place Meta on the top rung of prediction market capture if the product eventually goes live – even if it only allows virtual coins to be used and even if it doesn’t “officially” place a cash redemption value on those tokens.
However, it is widely speculated that social media conglomerates could one day flex into a more solidified “online wallet” service, with branded tokens being not only redeemable at major retail chains but also usable to settle payments. Facebook “Stars” and Twitch “Bits” are just a couple of examples of virtual tokens that already have a closed-loop value in that they can be used to reward creators on the respective platforms.
At the moment, the only “mass-volume” prediction market service that is regulated within the United States is Kalshi, which has seen its net worth skyrocket to a $22 billion valuation due to its enormous market share. BitMart likewise offers sports-based event contracts that are regulated by the CFTC, but does not facilitate real money deposits. Instead, users must purchase cryptocurrency or other virtual coins to buy or sell its hosted contracts. The other regulated prediction market app in the US is ForecastEx, which has yet to offer contracts on sports outcomes.
And then there’s Polymarket, an international exchange that operates offshore and does not enjoy any status as a CFTC-regulated prediction exchange. The company eventually plans to roll out its services to US customers at some point (pending CFTC approval), but has so far been stymied by an onslaught of insider trading scandals, influencer-based advertisements that promote “fake wins,” and competitive pushback from its perceived primary foe, Kalshi. Many Americans do indeed trade on Polymarket, but they must use a Virtual Private Network (VPN) or some other form of remote access mechanism to bypass the international exchange’s geoblocks.
Finally, there’s Novig, which received CFTC approval to offer sports-related event contracts last week. The platform is anticipating a full roll out of its product line to US customers later this summer.
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