Meta CEO Mark Zuckerberg has assembled a small team to develop Arena, an experimental application inspired by prediction platforms such as Kalshi and Polymarket.
Speaking to the media, employees familiar with the project, Arena will initially rely on a video game–style points system rather than real-money wagers. It is one of several apps Meta is testing, designed to operate independently of Facebook, Instagram, WhatsApp, and Messenger.
Audience reach and strategy
Insights from Meta reveal that there are 3.566 billion daily active users since April 2026. It plans to channel audiences toward Arena through its existing ecosystems, but no release date has been announced.
This year, Meta provides insights into its broader strategic plans by stepping away from reliance on ad revenue toward other avenues like subscription models, AI-driven advertising automation, and selective investments in hardware and infrastructure.
Subscriptions, for one, enable recurring income to offset ad instability while points-based systems found in Arena reduce exposure to privacy and gambling laws.
Additionally, AI is reshaping prediction markets into algorithmic trading ecosystems, blurring the line between them and traditional derivatives. Kalshi and Polymarket are already testing AI models in live trading with measurable success. The balance between collective intelligence and automation will determine whether prediction markets remain participatory or become institutional venues.
Market outlook
Meta is also positioning itself as a full-stack AI and infrastructure company, not just a social media giant. Subscription services and AI-driven advertising reassure investors amid concerns over heavy capital expenditures, according to Localogy.
Furthemore, experts forecast that prediction markets could reach $1 trillion in annual trading volume by 2030, highlighting the stakes for Meta’s entry. But challenges arise. For one, paywalls may alienate users who are already familiar with free services. Allowing subscription bundling could attract antitrust scrutiny.
Formerly known as Facebook Reality Labs, Reality Labs is a division of Meta Platforms and focuses on developing virtual reality (VR) and augmented reality (AR) technologies. But reports reveal that it continues to post multi-billion-dollar losses, raising questions about their long-term viability.
Regulatory spotlight on Polymarket
As of mid-2026, the main competitors in prediction markets include Polymarket, Kalshi, Manifold Markets, Metaculus, Azuro, PredictIt, and legacy platforms such as the Iowa Electronic Markets and Augur.
Each platform provides its own strengths: Polymarket dominates liquidity in decentralised trading. Meanwhile, Kalshi remains the only fully regulated U.S. exchange. Other platforms like Manifold and Metaculus focus on play-money forecasting and research.
Last Tuesday, media reports revealed that Polymarket had allegedly paid influencers to create fake trades and winnings in U.S. marketing campaigns, potentially adding fuel to an already strained regulatory landscape for prediction markets. The company pledged to conduct a “comprehensive audit of active promotional content” to ensure compliance with internal standards and disclosure laws, as reported by several media outlets.
CFTC regulation
The Commodity Futures Trading Commission (CFTC) has been actively reshaping prediction market regulations, releasing proposals to clarify permissible event contracts and to reinforce its exclusive federal authority. Key debates include retail safeguards, market integrity, and the balance of state versus federal oversight.
Moreover, Meta may initially avoid classification as a gambling operator by using a points-based system. Yet ensuing monetisation could spark CFTC scrutiny. With pending lawsuits on the horizon, they could be taken to the Supreme Court, shaping the future of regulatory authority. The latest allegations of fake trades and influencer manipulation further weaken credibility across the sector.
Despite potential fallout, experts also suggest an inquiry from President Donald Trump’s administration is unlikely, given the family’s ties to prediction markets and CFTC Chairman Michael Selig.
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