Before Meta CEO Mark Zuckerberg directed employees to build a standalone prediction market app, he proposed buying Kalshi, the leading company in the prediction market sector, according to three people with knowledge of the discussions who were not authorized to speak publicly.
Zuckerberg met with Kalshi CEO Tarek Mansour about a possible takeover last year as Kalshi's popularity surged, but the negotiations never advanced, according to one of the people who had direct knowledge of the meeting.
There are competing narratives about why the talks broke down, with some saying Mansour would not move forward with a sale and others indicating Meta considered the legal and ethical questions surrounding Kalshi too messy.
Whatever made the discussions fall apart, Meta still wants to tap into the prediction market craze. Zuckerberg has stood up a team that is now working to release its own prediction market app called Arena, which internal documents reviewed by NPR show will allow people to make guesses about future events.
Unlike Kalshi and its main competitor, Polymarket, Meta's app will not take bets using real money. Instead, users will wager "play money" on the outcome of happenings in the news and topics trending online. Meta's documents say the company's artificial intelligence systems will power the questions and determine who wins or loses based on something happening or not.
Neither Kalshi nor Meta would provide NPR with a comment when asked about the acquisition talks.
Prediction markets have become one of the fastest-growing parts of the tech industry in recent years. The sites allow people to place bets on everything from sports to elections to whether Iran will develop a nuclear weapon.
The massive influx of users into prediction markets makes the space an obvious target for Zuckerberg, according to Tim Wu, a Columbia University law professor who advised the Biden White House on tech policy.
"Meta seems to clutch at every shiny object," Wu said. "With the help of their advertising cash cow, they've been able to fail again and again without consequence," he said, citing Meta's pullback from the so-called "metaverse," and the abandonment of its cryptocurrency project, Libra. "I can't imagine a casino app with fake money is going to be much of a thrill," he said. "But maybe it's something my children would like, I don't know."
Thanks in part to a permissive regulatory environment in Washington, prediction markets have seen staggering growth.
In June 2025, about $28 billion was traded every month on Kalshi and Polymarket. A year later, monthly volume on the sites is nearly $220 billion, driven mostly by sports-related betting, according to The Block, a news and research company that tracks prediction market data.
Kalshi, which is overseen by commodities regulators in Washington, was valued at $22 billion in its latest funding round in May, up from a $2 billion valuation last year. Polymarket, which operates an overseas exchange outside the reach of U.S. regulators, is valued at $10.7 billion, according to the private market data firm PitchBook.
The rise of prediction markets has set off dozens of legal battles pitting the tech companies against state gaming officials, who insist the sites are gambling under a different name.
President Trump has vowed to protect prediction market companies, even as controversies over insider trading and market manipulation plague the industry.
Justice Department officials have opened two criminal cases over alleged insider trading on Polymarket. One involves a special forces soldier who allegedly profited from classified information about the capture of Venezuelan leader Nicolás Maduro by U.S. forces. In the other case, DOJ accuses a Google employee who earned more than $1 million of using confidential data about search trends to correctly guess the most-Googled people of 2025.
Meta's "buy or bury" strategy
Zuckerberg's interest in acquiring Kalshi follows a familiar corporate pattern. Meta has amassed a user base of more than 3 billion worldwide through the takeover of emerging social media platforms. Notably, Meta's purchases of Instagram in 2012 and WhatsApp in 2014 supercharged its reach and allowed it to become a colossal force in digital advertising. More recently, Meta bought AI wearable company Limitless and Moltbook, a social network for AI bots.
Meta's takeovers have attracted scrutiny from federal regulators. The Federal Trade Commission alleged at a trial last year that Meta engages in a "buy or bury" strategy in which nascent rivals are either acquired by the company, or Meta introduces a service cloning the competitor to squash their business.
A judge sided with Meta, ruling that the company did not violate any competition laws when it gobbled up Instagram and WhatsApp. Lawyers with the FTC are appealing the decision.
While the acquisition talks never advanced, Meta did strike a partnership with Kalshi in March, allowing for easy integration of Kalshi markets on Meta's social media app Threads.
Wu, the former White House tech policy adviser, said Meta became a company worth more than $1 trillion by acquiring apps rather than building its own. He argues Meta throws its power and money around like a monopoly and distorts the competitive field for everyone else.
"WhatsApp and Instagram have given them never-ending profits, but normal companies cannot fail five times in a row," he said. "Meta looking to take over Kalshi fits in with the company's long-standing practices."
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