ToplineMeta is developing a new prediction market app to compete with Polymarket and Kalshi, the New York Times first reported, after CEO Mark Zuckerberg directed a small team to start building the new product internally called “Arena.”Meta CEO Mark Zuckerberg reportedly directed a team to start working on a prediction market.Zuffa LLCKey FactsAccording to the report published on Tuesday, the proposed app would work separately from the company’s suite of social media and messaging apps, including Facebook, Instagram and WhatsApp.Users would initially place bets with video game points instead of real money, according to the report, but it could feature bets with real money in the future.It is unclear how far along in development the app is—Meta declined to comment to the Times, and did not return a request for comment from Forbes.Surprising FactMeta briefly ran a similar prediction market app called Forecast, which launched in 2020. In a blog post published that October, researchers at the company outlined a similar plan to use points instead of real money. “Forecasters get points when they join and then regularly get refreshes as they play. There’s a leaderboard that tracks total point ‘profit,’” the researchers wrote. The company quietly shut down the app two years later.Key BackgroundPrediction markets took off in recent years, with companies like Polymarket and Kalshi recording over $23.8 billion in total trading volume in April, according to research from Pew. The exploding popularity has led traditional sports betting companies, including both DraftKings and FanDuel, to launch their own prediction markets over the last year. This is not the first time Meta has taken on a major competitor that has already seemingly cornered a growing market. The company introduced Stories to Instagram after Snapchat grew in popularity, and introduced Reels as a competitor to other vertical video apps, including TikTok and YouTube Shorts. The company is also developing other new apps, according to the Times report, including an AI image app reportedly called “Meta Photos.”