After naming Kunal Shah as WhatsApp boss, Mark Zuckerberg shifts focus to building Meta prediction markets app

Meta CEO Mark Zuckerberg just appointed Cred founder Kunal Shah as WhatsApp's new CEO. And now, Zuckerberg has reportedly set his sights on Meta's next project – a prediction market app like Kalshi and Polymarket, but there is a catch.

In Short

• Mark Zuckerberg wants Meta to take on Kalshi and Polymarket
• New "Arena" prediction market app reportedly in the works
• It may not allow you to make real-money bets

If you spend time on social media, you may be familiar with Kalshi and Polymarket – two prediction market platforms that allow you to place bets on a bunch of different predictions. These can range from match results to elections to even the date when humanity reaches AGI. In the past couple of years, prediction markets have witnessed immense success, with trading volumes crossing $50 billion last year alone. And Meta CEO Mark Zuckerberg reportedly wants to get a chunk of this pie.

As per a report from the New York Times, Mark Zuckerberg has asked a small team within Meta to build a standalone prediction market app that will be similar to Polymarket and Kalshi.

This report comes just days after Zuckerberg appointed Cred founder Kunal Shah as the new CEO of WhatsApp following a $900 million investment in the fintech platform.

Meta’s prediction market may come with a catch

The app, internally called Arena, is being developed as an experimental project that has also been treated as a top priority. Unlike Kalshi or Polymarket, Meta’s Arena is expected to use a video game-style points system rather than have you make real-money bets. Though, the report indicates that the company has not fully ruled out adding money-based betting at a later stage.

Do note that prediction markets usually earn money by charging fees on transactions. To give you some context, as per the report, users have already placed over $130 billion in bets on Kalshi and Polymarket so far this year. With both platforms likely earning millions from fees.

It is unclear how Meta will earn revenue from Arena if it does not allow for real-money bets.

How will Meta’s new prediction market app work?

Arena will reportedly operate separately from Meta’s social media apps – Facebook, Instagram, WhatsApp and Messenger. However, it is expected that the company will use the reach of its social platforms to direct users towards it. Over 3.56 billion people reportedly visit Meta’s social media apps everyday.

Polymarket and Kalshi, where users can bet on outcomes ranging from the Super Bowl to the length of the State of the Union address, have become some of the internet’s fastest-growing destinations. This rise in popularity of prediction markets has seen traditional gambling companies such as FanDuel and DraftKings also move into the space. Trump Media & Technology Group has also announced prediction market plans.

At the same time, the sector has come under increasing scrutiny. Since prediction markets allow bets on a wide range of outcomes, they create fresh opportunities for people with inside information to profit. A pattern of suspicious trading on Polymarket has raised concerns in Washington. In April, federal prosecutors in New York charged a member of US Special Forces with using confidential information to place bets linked to the top-secret plan to capture Nicolas Maduro, the president of Venezuela. Prosecutors said he made more than $400,000 (roughly Rs 3.79 crore) from the operation.

Some reports have pointed to concerns that well-timed trades before major policy surprises by US President Donald Trump may have generated millions of dollars in gains for unknown traders. Some US states have also sued prediction market operators over what they say are breaches of gambling laws, while the current administration has sued states for having sued prediction markets.

Do note that the Indian government is expected to formally block Kalshi and Polymarket.

On the other hand, some are also worried over Meta’s potential entry into this space. US Senator Richard Blumenthal wrote on X, “Meta copied slot machines to addict kids to Instagram. Now Zuckerberg is turning his company into a prediction market.” The tech giant has faced scrutiny over its app algorithms in the past. The company was found guilty of making its platforms addictive to children in a lawsuit earlier this year.

Mark Zuckerberg wants more Meta apps

The report indicates that the Arena app is part of Zuckerberg’s efforts to capture shifts in internet use by quickly following fast-growing competitors and copying popular features.

It is believed that Arena is one of a handful of apps Meta is testing outside its core social network products. Another standalone app under trial, called Meta Photos, is designed to create new forms of media with AI. The push is part of a broader effort by Zuckerberg to build products around changing online behaviour as Meta looks for new areas of growth.

In 2019, a Meta team called New Product Experimentation worked on a range of social apps focused on podcasts, travel, music and matchmaking, but only few are said to have gained traction. With Facebook and Instagram now increasingly centred on video, executives believe there is less room inside those apps to test new ideas, which has pushed the company towards separate products.

This is not Meta’s first experiment in the category. In 2020, it launched Forecast, a crowdsourced prediction market app that asked users to make forecasts about the world in the early stages of the Covid-19 pandemic. The app was presented as a way to share crowdsourced knowledge and also used a points system. Meta shut it down in 2022.

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