Meta Platforms Inc. is developing a new smartphone application centered on prediction markets, a rapidly growing online trend that allows users to speculate on the outcomes of various events. The app, internally called “Arena,” is designed to function independently from Meta’s existing social networking platforms, including Facebook, Instagram, WhatsApp, and Messenger, according to two employees familiar with the project who spoke anonymously.

Unlike popular platforms such as Polymarket and Kalshi, where users place monetary bets on events ranging from sports outcomes to political developments, Meta’s Arena app is expected to initially employ a points-based system resembling video game scoring rather than real-money wagering. However, the company has not ruled out the future introduction of financial betting. Meta plans to leverage its vast user base—comprising more than 3.56 billion daily visitors across its apps—to drive adoption of the new service.

This initiative represents part of Meta CEO Mark Zuckerberg’s broader strategy to innovate by identifying emerging social behaviors and rapidly developing new applications around them. It comes amid concerns that Meta’s flagship platforms may be approaching user saturation, limiting opportunities to introduce fresh features within those existing environments. Several other experimental standalone apps are reportedly under development, including “Meta Photos,” which would use artificial intelligence to create novel types of media.

Meta’s recent history with standalone apps has been mixed. Since 2019, teams under its “New Product Experimentation” unit have launched various social apps targeting niches such as podcasts, travel, music, and matchmaking, but few have achieved widespread usage. Shifting popular content toward video on Facebook and Instagram has also constrained opportunities internally, prompting a pivot toward external applications as a means of growth.

Prediction markets themselves have grown substantially over the past several years. In 2025, Kalshi and Polymarket collectively processed about $50 billion in online trades, with that figure already more than doubling in the current year. These platforms have gained popularity through major sports broadcasts and awards shows, turning prediction markets into a cultural phenomenon. Operators benefit financially by collecting fees on each trade, making the sector potentially lucrative.

Traditional gambling companies like FanDuel and DraftKings, the cryptocurrency exchange Gemini, and even the Trump Media & Technology Group have launched or announced prediction market offerings, intensifying competition in this space. However, the expansion of prediction markets has also attracted regulatory scrutiny.

Concerns have arisen over risks such as insider trading and market abuse. In one notable case, federal prosecutors in New York charged a U.S. Special Forces member with using classified information to make illegal bets on a covert operation targeting Venezuelan President Nicolás Maduro, profiting over $400,000. Such incidents have drawn the attention of the Commodity Futures Trading Commission (CFTC), the federal agency charged with overseeing prediction markets. The CFTC faces challenges as its resources have diminished in recent years even as the regulatory responsibilities linked to these markets have grown substantially.

Meta declined to comment on the development of the new prediction market app. Kalshi and Polymarket also did not respond to requests for comment.