Zuckerberg eyed Kalshi before ordering Meta’s play‑money app

Mark Zuckerberg met Kalshi co‑founder and CEO Tarek Mansour in 2025 to discuss a potential acquisition. The discussions did not progress to a formal offer. After the meeting, Zuckerberg instructed Meta teams to develop a standalone prediction app called Arena.

Participants in the talks described two explanations for the collapse: Mansour was unwilling to sell, or Meta judged the legal and regulatory risks of owning a real‑money exchange to be too great. Accounts differ on which reason applied.

Arena is being built to use play money rather than cash. Meta plans to use its artificial‑intelligence systems to generate prediction questions and to determine outcomes. The app will not offer cash prizes or permit withdrawal of funds.

The distinction between play‑money and real‑money platforms affects regulatory classification and enforcement. One U.S. state made operating prediction‑market platforms a felony. Federal authorities have opened insider‑trading investigations tied to prediction markets, including probes alleging trades based on classified or confidential information.

Kalshi completed a $1 billion Series F round in May at a $22 billion valuation, up from about $11 billion five months earlier. The company reported annualized revenue above $1.5 billion and said institutional trading volume increased by 800% over six months. An offshore rival was valued at about $10.7 billion.

Trading volumes across the sector have varied. Taker volume for major platforms was about $8.6 billion in April and roughly $29.8 billion in notional terms, with a monthly peak near $25.7 billion in March. Aggregate industry volume for 2025 exceeded $63 billion.

Meta previously reached a commercial agreement with Kalshi to integrate Kalshi markets into Meta’s Threads app. At trial last year, regulators argued Meta employed a “buy or bury” strategy; a judge found Meta did not violate competition law in earlier acquisitions and that decision is under appeal.

Meta and Kalshi declined to comment on the reported acquisition talks. Arena’s structure removes real‑money wagering and the immediate cash revenue that accompanies cash bets.