Meta Targets Prediction Market Demand With Play Money Platform

Meta is developing a prediction market platform that would initially allow betting with play money before the company considers enabling real stakes, Seeking Alpha reported Tuesday (June 23), citing a paywalled article by The New York Times.

Using play money would allow the new platform to sidestep the regulatory hurdles it would face if it enabled the use of real money, according to the report.

Meta’s platform is called Arena, would run independently of the company’s other platforms such as Facebook and Instagram, and is being developed by a small dedicated team, per the report.

Bloomberg also reported on Meta’s project Tuesday and said that with Arena, Meta aims to capitalize on user interest in prediction market platforms and give users a place to interact around sports, politics and other live events.

PYMNTS reported in February that prediction markets are increasingly popular because they sit at the intersection of the gamification of finance, the financialization of culture, and the internet’s compulsion to keep score.

In addition to leading players like Polymarket and Kalshi, other prediction market platforms include PredictIt, ForecastEx, FanDuel Predicts, Robinhood Derivatives event contracts, Crypto.com event contracts, and Myriad.

When Crypto.com launched a new standalone prediction market platform in February, the company said it had seen rapid growth in its existing prediction markets business, with 40-fold weekly expansion over the previous six months.

Cryptocurrency and prediction markets platform Gemini Space Station said in May that it received a $100 million strategic investment from Winklevoss Capital and would use the new funding to fuel its expansion from a crypto company into a markets company. Gemini received a Derivatives Clearing Organization (DCO) license from the Commodity Futures Trading Commission (CFTC) in April and said the license would allow its Olympus affiliate to act as a clearinghouse for regulated derivatives trading, including prediction markets.

Coinbase said in December that it was expanding its new prediction markets business by acquiring The Clearing Company and gaining the specialized talent it needed to expand further in the category. Coinbase said at the time that its prediction market effort is part of its planned “Everything Exchange,” where users can trade every asset class.