Meta Tried to Buy Kalshi. Talks Broke Down. Now Zuckerberg Is Building His Own — With Play Money.
NPR reported on 30 June that Meta's Mark Zuckerberg held acquisition talks with Kalshi CEO Tarek Mansour last year, but negotiations never advanced. Meta is now building its own prediction market app called Arena, which will use play money only. Separately, Bernstein named Kalshi and Polymarket as likely M&A targets for DraftKings, Robinhood, or Coinbase.
NPR reported on 30 June that Meta CEO Mark Zuckerberg personally met with Kalshi CEO Tarek Mansour last year to discuss an acquisition of the exchange. The talks did not progress. Two accounts explain why: Mansour would not agree to a sale, having built Kalshi toward an independent IPO; or Meta concluded that the legal and regulatory complexity surrounding a real-money prediction market — CFTC litigation, state-law exposure, gambling-regulation entanglement — was too messy for a company already navigating its own regulatory environment. Both may be accurate simultaneously. What followed was that Meta assembled an internal team to build a competing product.
That product is called Arena. Internal documents reviewed by NPR show an app for making guesses about future events across news, sports, and trending topics — using play money only, with no real-money wagering. The design choice separates Meta from Kalshi and Polymarket at the core product level: Arena is a prediction-market game rather than a regulated financial exchange. That avoids CFTC licensing, state gaming-law exposure, and the operator liability that comes with settling real-money contracts — but also means no trading-fee revenue and no pathway to the price-discovery function that gives prediction markets their financial legitimacy.
The Meta episode fits the M&A picture that Bernstein analysts laid out in a 29 June note identifying Kalshi and Polymarket as acquisition targets. Bernstein's thesis: the two platforms own the exchange technology stack and regulated infrastructure, but they trail on consumer distribution compared to Robinhood, Coinbase, and DraftKings. Robinhood and Coinbase are named as best-positioned: each operates regulated financial infrastructure alongside large retail audiences. DraftKings has the sports audience but would need to navigate overlap between its sportsbook licences and a CFTC-regulated prediction market. The Bernstein note describes the gap Meta tried to fill by acquisition before choosing to build.
The sector is consolidating faster than expected. Combined Kalshi and Polymarket volume hit $44.8 billion in June — up 75% on May — and every major consumer-facing financial and betting platform is now either distributing prediction-market products (Robinhood via Kalshi, Wealthsimple in Canada) or building competing ones (Meta). For UK observers, the strategic question is whether this consolidation pattern eventually forces the hand of UK-based operators — Flutter, Entain, bet365 — to either lobby for a regulatory pathway to prediction markets or watch the product category become a US-only competitor for global trading interest.
Operators mentioned in this article
Recent updates
Crypto.com and Novig Sue Missouri as Market Leaders Hold Back — Eighth Circuit Now in Play via Iowa
Crypto.com and Novig filed federal lawsuits on October 16 challenging Missouri's cease-and-desist orders, arguing their sports event contracts fall under exclusive CFTC jurisdiction. The suits came as Missouri's 30-day compliance window closed. Notably, the market leaders — Kalshi, Polymarket, Robinhood, and Underdog — have not sued; Missouri said it is in 'ongoing discussions' with Kalshi. The outcome is tied to the Eighth Circuit, now weighing the same question in Kalshi's Iowa appeal — the fourth federal circuit to take up the prediction market question.
Ohio Escalates Post-Sixth Circuit — Cease-and-Desist to 10 Operators, but Platforms Keep Operating
Emboldened by its Sixth Circuit win, Ohio escalated enforcement. Governor Mike DeWine and the Ohio Casino Control Commission issued cease-and-desist letters dated October 2 to 10 operators, including Polymarket and Robinhood, with an October 16 deadline and penalties up to the value gained from contracts. Kalshi was excluded because a court order already covers it. As of October 20, platforms were still operating in Ohio despite the deadline. Polymarket has sued the Commission and AG Andy Wilson; Wilson is expected to sue non-compliant operators.
Midterm Election Betting Tops $220M — Double the Entire 2024 Cycle — as Public Opposition Mounts
Traders have wagered more than $220 million on the 2026 US congressional midterms across Kalshi and Polymarket, more than double the $92 million bet across the entire 2024 cycle, according to a Reuters analysis of Anti-Corruption Data Collective data published October 14. The 2026 cycle has more than 21,000 individual markets, up from 463 in 2024. Volume is concentrated in a few races, led by the Texas Senate contest. The growth comes despite a Reuters/Ipsos poll finding most Americans oppose using prediction markets to bet on elections.