Mark Zuckerberg urges Meta to explore working with Polymarket and Kalshi

Mark Zuckerberg, Meta’s chief executive, has urged his lieutenants to explore partnerships with popular prediction markets Polymarket and Kalshi as his company builds a similar app, three employees with knowledge of the matter said.

The app Meta is building, called Arena, could let people bet on virtually anything, with the goal of taking advantage of how prediction markets are becoming a bigger business. Internally, Meta executives said Arena differs from Polymarket and Kalshi, which accept real-money bets, as it will instead rely on video game-like “points”.

But Mr. Zuckerberg has made Arena a top priority, and his plans for it go deeper than previously known. He has asked Meta executives to talk to Polymarket and Kalshi, although it is unclear how a partnership with them might work, said three employees, who spoke on condition of anonymity because they signed non-disclosure agreements.

The employees added that Mr. Zuckerberg’s target demographic for Arena is 18 to 34-year-olds, and Meta is trying to reach at least 100 million monthly active “predictors” for the app. Arena is positioning itself as a place where people can bet on sports, culture, entertainment, politics and finance against friends and family. Executives called it an app “designed for everyone,” they said.

“We believe that predictive markets are one of the most exciting new types of content,” said Ime Archibong, Meta’s vice president of product, who leads the Arena initiative, in an internal post last month introducing the app, which was provided to The New York Times. “With the right containers, social conversation pays off because people want to show off how good they are at predicting things to their friends.”

Meta, Polymarket and Kalshi declined to comment.

Mr Zuckerberg’s moves to potentially involve Polymarket and Kalshi signal his willingness to take risks as he studies emerging digital behaviors and looks for ways to incorporate them into Meta’s products, which include Facebook, Instagram, Messenger and WhatsApp. He and his managers keep a close eye on other companies that might become competitors to learn from them or, in the case of prediction markets, clone them outright.

However, prediction markets are under increased legal scrutiny for how they can create opportunities for people to use inside information to make money. In April, federal prosecutors in New York charged a member of US special forces with using confidential information to place bets on Polymarket about a secret plan to capture Nicolás Maduro, the president of Venezuela. The soldier made more than $400,000 from the operation, according to prosecutors.

On Tuesday, when The Times first reported on Meta’s plans for the Arena, Sen. Richard Blumenthal, Democrat of Connecticut, he said the Silicon Valley company’s business model “profited from addiction.” He directed people to support some of his legislative efforts on online child safety and prediction market rules.

On Friday, more than a dozen Democratic senators sent a letter to the Senate Budget Subcommittee on Financial Services. In the letter, lawmakers asked to bar the Commodity Futures Trading Commission, the federal agency that oversees prediction markets, from interfering with state oversight of the platforms.

Arena is being tested internally and may not be released, Meta staff said. If released, it will initially be a standalone app to see if people are interested in using it, they said. Meta plans to eventually integrate parts of Arena into Facebook and Messenger, including adding prediction bets to group chats, the Reels video product and ephemeral “Stories,” and to Facebook’s popular news feed, they said.

It is unclear whether Arena will include real money betting. But Mr. Zuckerberg believes betting behavior could lead to increased activity on Meta apps, the people said. Users can engage in conversations and debates on Facebook and Messenger about bets, or share more often if their bets are correct, the people said. The meta may also contain gameplay features, including leaderboards that allow users to compete against each other.

The app sparked a debate among Meta employees. On internal message boards and private chats, some workers said the company would cross an ethical line by offering predictive markets on the world’s largest social network, which could become an avenue for more gambling, employees who have seen the discussions said. Other employees said they were comfortable with the project because it didn’t involve real money betting, at least in its current form.

“When markets are built into a personalized feed, they stop feeling like something for marketers,” Mr. Archibong wrote in his post. “They start to feel like they’re part of a conversation that’s connected to memes and moments and whatever people are paying attention to. Betting becomes less about analysis and more about saying, ‘This is what I think.’

Mr Archibong added: “Influencers will drive volume and culture will drive attention.” His post included a subtitle explaining the rationale for Arena: “Betting as a Conversation.”