Meta launches prediction markets app to compete with Polymarket and Kalshi

What happened?

Meta, the parent company of Facebook and Instagram, is building a prediction markets app to compete with platforms like Polymarket (blockchain-based) and Kalshi (regulated by the CFTC). According to Gizmodo on February 26, 2025, the app would allow users to bet on outcomes of events such as elections, awards, or economic indicators. The project is in its early stages and has no official name or launch date yet. Meta's team is reportedly exploring the use of proprietary technology instead of blockchain, which would mark a key difference from Polymarket. Additionally, the company has already initiated contacts with regulators to understand legal requirements in the United States and other markets.

Why is it important?

Prediction markets have grown exponentially: Polymarket processed over $3.5 billion in bets during 2024, driven by the U.S. elections. Kalshi, meanwhile, operates under federal oversight in the U.S. and has handled growing volumes in economic and political events. Meta, with its reach of billions of users, could democratize access to these markets, but it also carries a history of controversies over content moderation and data handling. The entry of a tech giant legitimizes the sector but attracts scrutiny from regulators and politicians. The Trump family, according to Gizmodo, has shown interest in the area, and federal prosecutors have been watching the industry. This political context is relevant: favorable or unfavorable regulation could define the initiative's success.

Potential consequences

• For the market: Increased competition and possible reduction in fees. Polymarket and Kalshi will need to innovate to retain users. Polymarket, which already faces regulatory challenges in the U.S., could see its advantage eroded if Meta offers a more integrated social media experience. Kalshi, being regulated, could benefit if Meta takes a similar path, but could also lose share if Meta bypasses regulation.
• For users: Greater event offerings and possibly integration with social networks, but also risks of misinformation if bets on sensitive topics are not properly managed. Users could benefit from a more user-friendly interface and real-time notifications, but also risk information bubbles if Meta's algorithms prioritize popular bets without verification.
• For Meta: New revenue streams and engagement, but exposure to regulatory lawsuits if it fails to comply with gambling and securities laws in each country. Meta already faces fines in Europe over privacy; adding betting could complicate its relationship with regulators. Additionally, the company will need to invest in fraud detection and market manipulation systems.

What readers should know

Meta's app will likely use proprietary technology, not blockchain, differentiating it from Polymarket. This could offer greater control over transactions and lower volatility, but also centralizes trust in Meta. The company will need to obtain licenses in key jurisdictions, such as the CFTC in the U.S., the FCA in the UK, and the DGOJ in Spain. The political context is relevant: the Trump administration has shown interest in regulating or even operating prediction markets, which could influence the legal environment. Meta faces the challenge of balancing free speech with preventing manipulated or illegal bets. Historically, Meta has had issues with political content moderation; now it must ensure that bets are not based on false or misleading information. Moreover, the launch could coincide with the U.S. midterm elections in 2026, increasing scrutiny.

“Meta is betting big on prediction markets, but the regulatory path will be complex,” says an analyst at TheVortiq.

In summary, Meta's entry into prediction markets represents a milestone that could transform the sector, but also carries significant risks. The company will need to navigate a regulatory maze, manage user trust, and compete with established platforms. Success will depend on its ability to innovate without repeating past mistakes.