Meta's Prediction-Market Ambitions Face Scrutiny Amid Trust and Legal Concerns

13 October 2026

Meta is developing a standalone prediction-market app called Arena, aiming to compete with the likes of Polymarket and Kalshi. But the social media giant's foray into this fast-growing yet legally uncertain market faces significant challenges, from consumer trust issues to potential regulatory hurdles.

A Points-Based Gambling App

Meta's new app, codenamed "Antwerp," will not initially allow real-money wagering. Instead, it will use a video game-like points system, according to early reports. However, the company has not ruled out adding real-money betting later. Internal documents describe Arena as a rebuild of Meta's 2020 prediction app Forecast, which was shut down two years after launch.

The app will leverage Meta's AI models, such as Llama, to automatically generate questions from trending topics and make personalized market recommendations. Meta's AI would also resolve markets in near real-time. Before a public launch, Meta plans internal employee testing and a rollout on both iPhone and Android devices.

A Legal Quagmire and Trust Deficit

The prediction market industry is facing legal questions over market manipulation, insider trading, and regulatory oversight. There are more than 30 pending lawsuits questioning the legality of prediction markets. The Biden administration has begun reviewing federal rules governing the sector.

Consumer trust is also a major issue. A Forrester poll of 509 online adults in the US, UK, and Canada found that 56% of respondents do not trust Meta with a prediction market product. A full one-third of respondents said Meta's backing makes them less likely to try the app. Meta declined to comment to NPR when asked about the poll results.

Forrester Director of Product Research Michael Gu says Meta's reputation means whatever it builds will be under heavy scrutiny from the start:

"A prediction market is a relatively straightforward concept, but it's a brand-building exercise for Meta. Consumers will be watching closely to see if it's any good, but also if it does anything underhanded. And regulators will be doing the same."

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In addition, more than 70 other companies have launched prediction market projects or services, according to Event Horizon. Polymarket and Kalshi are currently the leading players in the space. The prediction market sector has expanded beyond politics into categories like sports, technology, and entertainment.

The Prediction Market Revival and Future Risks

Meta first launched a prediction market app called Forecast in 2020, but the project was shut down two years later. In internal documents, Meta cited the operational cost of manual question curation as a significant factor. Arena's AI-driven approach aims to address this challenge and pave the way for a more sustainable product.

The question now is whether Arena can establish itself in a crowded and contentious field. Can Meta's vast user base and technological prowess set it apart, or will the company face an uphill battle for trust and regulatory clarity?

In addition, the points-based design may be a deliberate move to avoid regulatory and reputational risks associated with real-money gambling. However, consumers may view it as a limiting feature rather than a strength. If Arena eventually allows real-money wagers, it opens up a new set of concerns and regulations.

Meta declined to provide a timeline or specific details about the app. Its next move will come after a period of internal testing. When Arena eventually reaches the public, all eyes will be on how Meta navigates the unprecedented risks and rewards of the prediction market business.