Meta Plans to Launch Its Prediction Market App ‘Arena’

Meta is entering the prediction market industry, planning to introduce a new app called Arena. The app is designed to compete with established platforms like Kalshi and Polymarket. Analysts anticipate the prediction market sector could burgeon into a $1 trillion industry soon.

CEO Mark Zuckerberg has directed a team to develop Arena as a standalone app. This development was initially reported by The New York Times. NPR obtained internal documents from Meta that outline the app’s features and objectives, which had not been previously disclosed.

Unlike traditional prediction markets that use real money, Arena will provide users with a daily allotment of virtual currency to predict outcomes of various real-world events. Popular apps like Kalshi and Polymarket feature traders betting billions weekly on diverse subjects, from films to geopolitical events.

Meta envisions utilizing artificial intelligence to enhance its service offerings. According to internal documents, the AI will power features such as automatic question generation from trending topics and personalized market recommendations. AI will also determine the outcomes of predictions in real-time using its large language model, Llama.

The app, internally codenamed ‘Antwerp’ and ‘FBForecast,’ is a revamp of Meta’s 2020 app, Forecast, which was discontinued due to high operational costs for manual question curation. A prototype is underway, with Meta employees set to test it before its public launch on iOS and Android. A specific release date has not been announced.

Though offering a prediction market without monetary stakes might seem unconventional, gaming lawyer Daniel Wallach highlights that avoiding financial wagers could give Meta time to secure necessary licenses and adapt to the fluid legal environment. Currently, over 30 lawsuits challenge the legality of traditional prediction markets.

We’re clearly in legal limbo. And we might not have a clear answer for another year or two.

Meta ventures into this industry amidst ongoing debates about market manipulation and potential incentives. The industry recently gained traction with the previous government administration initiating rule changes, increasing regulatory attention.

Meta’s move places it among significant Silicon Valley firms eyeing this space. Joining platforms like DraftKings and FanDuel, and several other entities that have launched prediction market initiatives, Meta aims to tap into the sector’s growing appeal. Despite existing uncertainties, the rising interest indicates a promising horizon for prediction markets.