Meta CEO Mark Zuckerberg has reportedly ordered his team to develop a new prediction market platform, according to a source familiar with the company’s plans.
The report, first published by The New York Times, said the platform will not use real money for transactions at the initial stage.
Instead, users will make predictions using a points system that resembles the mechanics in video games. However, the use of real money has not been ruled out in the future.
The platform, known internally as “Arena”, is expected to operate separately from Facebook and Instagram. However, Meta intends to leverage the user bases of both platforms to attract traffic and users to Arena.
The development has put pressure on the sports betting company’s shares.
DraftKings shares fell more than 2% after the report was published, while FanDuel’s parent company, Flutter Entertainment, also fell nearly 2% before paring losses and closing higher.
The main concern for investors is the potential for prediction market platforms like Arena to disrupt the traditional sports betting industry. Over the past year, DraftKings and Flutter have come under pressure as more platforms offer prediction contracts based on the outcome of events, including sporting events.
Meanwhile, shares of trading platform Robinhood, which also offers contracts from several existing prediction markets, also fell after the news was reported.
Meta's move into the prediction market segment is seen as another effort by the company to expand its digital ecosystem beyond social media, opening up opportunities for new business models based on user engagement and predictive data.
