Meta's Zuckerberg enters the prediction market arena — again, a step behind

• Mark Zuckerberg is launching his next major project: a betting platform modeled after Polymarket.
• The prospects for success are good — which alarms some experts.
• This story was originally published on WELT.

Mark Zuckerberg has spotted a trend — once again, after others got there first. When videos exploded on TikTok, the Meta chief built Reels. When users began fleeing Twitter, he launched Threads. When dating apps flourished, he introduced Facebook Dating. And now, as online betting booms, the 42-year-old is entering the business — a few years late.

Internally, the project is called "Arena," and it is set to become an app competing with platforms such as Polymarket and Kalshi — platforms where users can bet in real time on who will win the next election, whether the Federal Reserve will cut interest rates, or whether Donald Trump will mention McDonald's in a speech next week.

News of the "Arena" plans, first reported by The New York Times, spread within minutes on Tuesday. The market quickly grasped what Meta's potential entry would mean: When a company with more than 3 billion members on Facebook and Instagram begins nudging its users toward betting, there is much to lose — and even more to gain.

"Meta shows that we are still in the early days of the prediction market experiment," historian and author Jonathan D. Cohen said.

Cohen, who researches online gambling, predicts the current dominance of market leader Kalshi is likely to end soon. "We might not even understand yet the degree to which the market will change — how many new platforms we are going to have, and how much further gambling is going to seep into every corner of American life."

A Supreme Court ruling that changed everything

Until 2018, online betting was effectively prohibited in the United States. Then the Supreme Court overturned the ban, and what followed was a gambling expansion onto millions of phones at a scale almost reminiscent of the Gold Rush era.

Today, America bets. And it does so massively. According to the American Gaming Association, Americans wagered approximately $150 billion on sporting events alone last year — predominantly on smartphones or laptops. That represents an increase of 11% compared to 2024. Thirty-nine states have now legalized online sports betting. A survey by the Siena College Research Institute found nearly 22% of US adults report having at least one active account with a betting provider. Nearly half of men aged 18 to 49 have an account.

"We are witnessing the largest and fastest explosion of gambling this country has ever seen," said Cait Huble of the nonprofit National Council on Problem Gambling. Public awareness, however, is lagging about a decade behind other addiction issues, she says — a gap that could lead to unforeseen harm.

Alongside this development, a second industry has emerged — one that prefers not to call itself gambling: so-called prediction markets. Polymarket and Kalshi, the two dominant platforms, claim they are not running gambling operations but rather information markets. The concept: The more people bet real money on events, the more accurate the resulting probabilities become.

The platforms' breakthrough came during the 2024 presidential election. Billions of dollars were wagered on the candidates, and the platforms delivered accurate forecasts — in some cases outperforming traditional opinion polls. Since then, they have become a fixture in political discourse.

Polymarket CEO Shayne Coplan put it this way: Prediction markets are "the most precise thing humanity has ever had" when it comes to forecasting the future. Experts dispute that, but so far the platforms' success lends it credibility. In 2025, Kalshi and Polymarket together recorded a combined trading volume of around $50 billion, and both companies expect a significant increase this year. A report by Eilers & Krejcik, a research firm specializing in sports and gaming, says the figure could reach $1 trillion by the end of this decade.

A regulatory gray zone

Traditional sports betting apps are subject to state-level regulation, complete with protective measures — self-exclusion programs, advertising restrictions, and contributions to addiction prevention initiatives. Prediction markets, by contrast, are overseen by the federal Commodity Futures Trading Commission (CFTC). That means they are legal even in states that have otherwise prohibited online betting, without being subject to the same oversight that governs other providers or casinos.

Kalshi CEO Tarek Mansour insists on the distinction: He says his platform does not operate gambling, but trades contracts on events. Eight states see it differently and have filed cease-and-desist actions against Kalshi. The Trump administration has left the matter unresolved for now. Ultimately, the Supreme Court may well have to decide.

Heather Wardle, a professor of gambling research at the University of Glasgow, sees an urgent need for action. "Companies are using all the information, data, and insights they have about people to increase their profits," she told Psychology Today. Is that precisely what Meta now has in mind? The company has denied, according to The New York Times, that the "Arena" app will be directly linked to Facebook, WhatsApp, and Instagram.

The phenomenon of online betting has also become a subject of academic research. A 2024 study by researchers at the University of Southern California examined the effects of the legalization of online sports betting. The findings were stark: The probability of personal bankruptcy rose by 10%, and the value of debts passed on to collection agencies increased by 8%.

Young men are disproportionately affected. According to the University of Rochester, 2 million adults in the United States meet the clinical criteria for gambling disorder — a condition that researchers say falls into the same diagnostic category as alcohol and drug dependence.

Cohen, the historian and author, is calling for stricter regulation of the platforms. "We're talking, for example, about 19-year-old men who've put together an Excel spreadsheet with three AI lines of code in their parents' basement and then think they've figured out the betting system and will never have to work a real job again," he says. And the platforms' strategy, he argues, is clear: "Betting on a cell phone should become as normal and accessible as playing Candy Crush."

There is also a political dimension. In April, federal prosecutors in New York City indicted a member of the US special forces for allegedly using classified information to place bets on the secret plan to arrest Venezuelan President Nicolás Maduro.

Mike DeWine, the Republican governor of Ohio, has said he would not vote for legalization and is pushing for higher taxes on sports betting revenues. Democratic Massachusetts state Sen. John F. Keenan introduced the "Bettor Health Act," which would, among other measures, restrict aggressive push notifications.

Such measures could also affect Zuckerberg's "Arena" plans. What makes the experiment compelling is that Meta has more experience than virtually anyone else in the world in keeping users on a platform and analyzing their behavior.

Whether "Arena" will shake up the market remains to be seen in the months ahead. The conditions are certainly favorable in a society where betting on the future — on elections, on crises, on catastrophes — has become a routine leisure activity. Then again, Zuckerberg's last major venture, the 3D universe known as the Metaverse, turned into a multibillion-dollar flop.

Chances are, it won't be long before someone opens a market on whether Zuckerberg will fail or triumph with "Arena".

This story originally appeared on WELT and is courtesy of the Axel Springer Global Reporters Network, which harnesses the resources of the company's newsrooms to publish ambitious scoops, investigations, interviews, opinion pieces, and analysis. It allows journalists — including those from POLITICO, Business Insider, WELT, BILD, Onet, and Fakt — to collaborate on major stories for an international audience of hundreds of millions across platforms.

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