Meta CEO Mark Zuckerberg (left) [AP=Yonhap News file photo]

Meta is reportedly planning to enter the prediction market space, similar to Polymarket and Kalshi.

The New York Times reported on the 23rd (local time), citing multiple internal sources, that Meta CEO Mark Zuckerberg has recently directed the formation of a small internal team to develop a smartphone-based prediction market app.

A prediction market is a betting platform where users wager money or points on the outcomes of numerous future events, such as sports results, award show winners, elections, or major policy changes.

The prediction market app being developed by Meta is internally codenamed "Arena" and is expected to operate independently from Meta's existing social media platforms, including Facebook, Instagram, and WhatsApp.

However, Meta has devised a strategy to leverage its vast existing user base of social media platforms to attract early users to Arena.

Sources stated that unlike existing prediction market services, it is highly likely that Meta will adopt a point-based system rather than allowing real money wagers initially, though they have not completely ruled out the possibility of introducing real-money betting features in the future.

This is not Meta's first foray into prediction market services. In 2020, during the early stages of the COVID-19 pandemic, Meta launched a crowdsourced prediction platform called "Forecast," but it shut down the service after two years.

However, as the prediction market has seen rapid growth—with the total transaction volume of Polymarket and Kalshi reaching $50 billion (approximately 77 trillion KRW) last year and exceeding $130 billion (approximately 200 trillion KRW) so far this year—it appears the company is exploring a re-entry into the market.

Meta's development of a prediction market app is also being evaluated as an extension of its so-called "copycat" strategy, through which it has consecutively released services mimicking Snapchat, TikTok, and Twitter (now X).

The regulatory and oversight risks from Congress and financial and judicial authorities surrounding prediction markets are also hurdles that Meta must overcome.

This is because there is growing demand for tighter regulations after it was revealed that government and agency officials handling classified information could potentially profit from prediction markets by using insider knowledge.

In fact, federal prosecutors in New York previously indicted a special forces soldier on charges of earning over $400,000 (approximately 600 million KRW) in profits by placing bets using classified information related to an operation to arrest Venezuelan President Nicolás Maduro.

Meta insiders stated that "Arena" is still in the early stages of development and that whether it will actually be launched remains fluid.