Meta Platforms Inc. CEO Mark Zuckerberg has reportedly dispatched a specialized team to develop a standalone smartphone app aimed at capturing the rapidly expanding prediction markets.

The forthcoming application, internally designated as Arena, would compete with popular platforms like Polymarket and Kalshi, according to a report by The New York Times citing employees with knowledge of the matter.

Unlike its established, cash-based competitors, Arena is expected to initially launch utilizing a video-game-like virtual points system rather than real-money wagering.

However, sources note that the social media giant has not entirely ruled out transitioning to real-money betting in the future. The strategy allows Meta to navigate rigid global gambling regulations; cash-based betting faces severe legal restrictions in several of Meta’s largest user markets, including India, Indonesia, and Brazil.

The initiative represents Meta’s latest attempt to capitalize on financial and analytical trends that surged during the 2024 U.S. presidential election.

Prediction markets allow participants to buy and sell contracts based on the probability of real-world outcomes spanning politics, sports, entertainment, and monetary policy. Operating similarly to a stock market for future events, these platforms have gained mainstream traction, prompting major trading brokerages like Robinhood Markets Inc. and Interactive Brokers to roll out their own event contracts.

Despite the sector’s rapid growth – financial research firm Bernstein projects annual trading volumes could balloon to $1 trillion by the end of the decade – it has attracted intense regulatory scrutiny. Critics point to potential market manipulation, highlighted by anonymous traders securing millions of dollars in profits from well-timed wagers placed immediately before major U.S. policy announcements.

To ensure Arena’s viability, Zuckerberg has classified the project as a top priority. Meta plans to aggressively scale the independent application by leveraging its massive existing ecosystem, cross-promoting Arena to its 3.56 billion daily active users across Facebook, Instagram, WhatsApp, and Messenger.

Arena will operate independently from these core platforms alongside other experimental standalone software currently in development, including an AI-focused media generation tool called Meta Photos.

This is not Meta’s first foray into the speculative event space. In 2020, the company launched a crowdsourced predictions app called Forecast, which was quietly shuttered two years later after failing to sustain a sufficient user base.

Meta did not immediately respond to requests for comment regarding Arena’s development timeline.