Meta CEO Mark Zuckerberg proposed buying Kalshi, a leading prediction market company, before deciding to develop Meta’s own prediction market app, according to people familiar with the discussions. The talks, which took place last year, ultimately fell apart, with differing accounts of why the negotiations stalled. Some sources indicate that Kalshi CEO Tarek Mansour was not interested in selling, while others suggest that Meta was concerned about the legal and ethical implications of acquiring the company.
Zuckerberg’s interest in the prediction market sector is no surprise, given its rapid growth in recent years. The sector has seen a massive influx of users, with sites like Kalshi and Polymarket allowing people to place bets on everything from sports to elections. Meta’s own app, called Arena, will allow users to make predictions about future events using “play money” rather than real currency.
Prediction Market Trends
Prediction markets have become a significant part of the tech industry, with the sector seeing staggering growth in recent years. In June 2025, about $28 billion was traded every month on Kalshi and Polymarket, with that number increasing to nearly $220 billion just a year later. The rise of prediction markets has also led to numerous legal battles, with state gaming officials arguing that the sites are essentially gambling operations.
Despite the controversies surrounding the industry, President Trump has vowed to protect prediction market companies. However, the Justice Department has opened several cases involving alleged insider trading and market manipulation on these sites. The growth of prediction markets has also led to significant investments, with Kalshi valued at $22 billion in its latest funding round and Polymarket valued at $10.7 billion.
The rise of prediction markets has significant implications for the tech industry and beyond. As the sector continues to grow, it is likely to attract even more attention from regulators, investors, and users. Meta’s entry into the market, even if it is with a non-monetary app, is a significant development that could further legitimize the sector.
Implications and Next Steps
The development of Meta’s prediction market app, Arena, is a significant move for the company, which has been looking to expand its offerings beyond social media. The app’s use of “play money” rather than real currency may help to mitigate some of the regulatory risks associated with the sector. However, it is unclear how the app will be received by users, who may be more interested in using sites like Kalshi and Polymarket that offer real-money betting.
As the prediction market sector continues to evolve, it is likely to face increasing scrutiny from regulators and lawmakers. The industry’s growth has already led to numerous legal battles, and it is likely that these will continue in the coming years. Despite these challenges, the sector is likely to remain a significant part of the tech industry, with companies like Meta and Kalshi playing major roles.
The broader significance of the prediction market sector lies in its potential to transform the way we think about probability and decision-making. As the sector continues to grow and evolve, it is likely to have significant implications for a wide range of industries, from finance to sports. The development of new technologies and platforms, like Meta’s Arena app, will be critical to the sector’s continued growth and success.
