Meta reportedly explored acquiring prediction market operator Kalshi before deciding to build its own forecasting platform.
Sources familiar with the discussions told NPR that Meta chief executive Mark Zuckerberg met Kalshi founder and chief executive Tarek Mansour in 2025 to discuss a potential acquisition. However, the talks reportedly never advanced beyond an early stage, with differing accounts emerging over why a deal failed to materialise.
The reported discussions took place as prediction markets experienced explosive growth, attracting billions of dollars in trading activity and drawing increased attention from investors, regulators, and major technology companies.
Meta turns to Arena after Kalshi acquisition talks stall
While acquisition discussions with Kalshi did not progress, Meta has continued pursuing its ambitions in prediction markets through the development of a standalone application called Arena.
According to internal documents reviewed by NPR, Arena is being designed as a prediction platform that allows users to forecast future events using virtual points rather than real-money wagers.
Unlike Kalshi and rival platform Polymarket, Arena is not expected to facilitate cash betting. Instead, users will make predictions on news events, cultural developments, entertainment trends, and online discussions.
Meta’s artificial intelligence systems are expected to play a central role in the platform by generating market questions, managing forecasts, and determining outcomes once events have been resolved. Neither Meta nor Kalshi publicly commented on the reported acquisition discussions.
Meta Arena prediction market app follows broader strategy
Meta has increasingly focused on artificial intelligence, subscription products, and emerging digital platforms as it seeks new growth opportunities. Arena is one of several standalone applications currently being tested outside Meta’s core ecosystem of Facebook, Instagram, WhatsApp, and Messenger.
According to company figures, Meta recorded 3.566 billion daily active users for January to March quarter. Industry observers believe the company could leverage its vast audience reach to drive adoption of Arena once the platform launches.
Prediction markets become a billion-dollar industry
Meta’s interest comes as prediction markets transform from a niche financial product into a major global industry. Research from The Block shows combined monthly trading volume across Kalshi and Polymarket reached approximately $28 billion in May 2026.
Much of the growth has been driven by sports-related contracts, although traders increasingly use prediction markets to speculate on politics, economics, technology and global events.
Investor confidence has risen alongside trading activity. Kalshi achieved a reported valuation of $22 billion in its latest funding round in May 2026, up from $2 billion one year earlier.
Industry analysts forecast that prediction markets could generate as much as $1 trillion in annual trading volume by 2030, making the sector increasingly attractive to major technology firms.
Regulatory scrutiny continues to grow
Despite rapid expansion, prediction markets remain under intense regulatory scrutiny. State gaming regulators across the United States continue to argue that many event-based contracts closely resemble gambling products. At the same time, federal regulators have been working to establish clearer rules governing prediction market activity.
The Commodity Futures Trading Commission (CFTC) has proposed measures aimed at clarifying which event contracts are permissible while reinforcing federal oversight of the industry.
Key issues include market integrity, retail investor protection and the balance between federal and state regulatory authority. The sector has also faced reputational challenges.
Polymarket recently came under scrutiny following a Wall Street Journal report alleging that influencers were paid to create misleading promotional content involving fabricated trades and winnings. In response, the prediction market launched an internal audit of its active promotional materials.
Despite renewed scrutiny, Polymarket has reported annualised revenue exceeding $1 billion, marking a milestone just six weeks after opening its regulated United States exchange to the public. According to CNBC, the annualised revenue was driven by strong trading activity on both its newly accessible US platform and its international decentralised exchange.
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