Meta Considers Entering Prediction Markets
The app would use a points system at first and could later add cash trading as prediction markets draw more users and regulatory scrutiny.
- On Tuesday, Meta Platforms Inc. CEO Mark Zuckerberg directed staff to build a prediction market app internally called "Arena," which will operate independently of Facebook and Instagram.
- Meta previously launched a similar prediction market product called Forecast in 2020, but the company quietly shut down the app two years later.
- The new app will rely on a video-game-style points system rather than real money, allowing Meta to leverage its roughly 3 billion monthly active users across Facebook and Instagram.
- Following the report, shares of betting platforms DraftKings and Flutter Entertainment fell more than 2 percent on Tuesday, reflecting investor concerns about Meta's distribution advantage.
- Prediction markets have recorded over $23.8 billion in total trading volume, though companies face increasing legal scrutiny regarding whether such event contracts constitute prohibited gambling activities.
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