The prediction market track exploded this week. First, "The New York Times" exposed that Meta is secretly incubating a prediction market platform "Arena", then Kalshi CEO confirmed that it will not go public this year but the valuation has soared to 40 billion US dollars, Polymarket was named by "The Wall Street Journal" for an investigation due to a fake trading video by an internet celebrity, and at the same time, Kalshi also sued the state of Illinois in federal court. PASA's official website found that these four events seem unrelated on the surface, but they all point to the same industry signal: the prediction market is moving from fringe innovation to mainstream asset class, and regulators, capital, and platform players are all accelerating to seize positions.
Meta's "Arena": Cold start with points, 3.5 billion daily active users
According to "The New York Times", Meta CEO Zuckerberg has assigned a team to research the direction of the prediction market and is brewing a platform called "Arena". The initial plan is to use a video game-like points system instead of real money, but the team has not ruled out the possibility of switching to real money in the future. Meta has not yet disclosed the launch schedule, nor has it commented on the report.
But what really makes the industry take notice is not the product form, but the traffic trump card in Meta's hand—Facebook, WhatsApp, Instagram, and Messenger together have about 3.5 billion daily active users. It is now the World Cup window, and large-scale sports events have always been the most efficient scenario for customer acquisition in the prediction market. If Meta really enters at this point, it means pushing the prediction market from the geek circle directly to the national audience. Truth Social has also explored a similar direction before, and the interest of social platforms in the prediction market is shifting from trial to action.
Kalshi: Annual revenue exceeds 2 billion, but it's still early for IPO
While the valuation soars, rumors of Kalshi's IPO naturally abound. CEO Tariq Mansour stated clearly to CNBC this week: Will not enter the public market in 2026. However, he confirmed that the company has started informal IPO discussions with investment banks, as Kalshi has just crossed the critical threshold of annual revenue of 2 billion US dollars.
Mansour's wording is very restrained: "A company with our financial condition and growth rate, such conversations naturally occur, but we don't have an answer yet." Kalshi's current round seeks a 40 billion US dollar valuation, nearly double the 22 billion US dollars earlier this year. After the Series D round last October, the company completed a 1 billion US dollar Series F financing led by Coatue Management this year, with participants including Sequoia Capital, Morgan Stanley, and a16z. On the other hand, arch-rival Polymarket is also seeking to raise funds at a 15 billion US dollar valuation—the valuation competition between the two leading platforms is no longer a niche topic.
Internet celebrity fake crash: Polymarket was exposed by WSJ
Polymarket had a tough week. "The Wall Street Journal" published a heavy investigation, revealing a series of fake trading videos concocted by Polymarket internet celebrities. A typical case is: a college student claimed to have won 100,000 US dollars on a prediction market in January about whether Trump would publicly say "McDonald's", but WSJ found that this transaction did not exist at all. The paper reviewed more than 1100 videos for systematic analysis.
Polymarket then announced that it had launched an internal investigation in response to the report, emphasizing in the statement that it is "committed to maintaining accurate, fair, and transparent markets". But in the fragile trust assets of the prediction market, such content scandals are not to be underestimated—after all, the core selling point that the industry talks about every day is "more transparent and more decentralized than traditional gambling".
Illinois fires the first shot: 15% tax, Kalshi sues for unconstitutionality
If the first three events are still within the scope of business competition, Illinois' move directly touches the most sensitive nerve of the prediction market industry. Last week, Illinois Governor Pritzker signed an annual budget of 56 billion US dollars, which includes a pioneering provision: a 15% total revenue tax on sports event contracts in the prediction market. This is the first tax in the US specifically targeting the prediction market, effective July 1.
Kalshi reacted quickly, filing a 31-page lawsuit in the Northern District Federal Court of Illinois, accusing the state of violating the Supremacy Clause of the US Constitution—when state law conflicts with federal law, federal law prevails. The lawsuit's wording is unapologetic: "Illinois apparently believes it is not bound by the Supremacy Clause." Kalshi is seeking a temporary restraining order to prevent the tax from being implemented.
PASA's official website believes that the significance of this lawsuit goes far beyond Illinois. Once the 15% tax precedent is established, other cash-strapped state governments are likely to follow quickly—the prediction market's transition from an "unregulated arbitrage period" to a "compliant taxation period" may start timing from this lawsuit.
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This article is from "PASA-Global iGaming Leader" gambling industry news channel: https://t.me/pasa_news
Original in-depth gambling channel: https://t.me/gamblingdeep
Free data report: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
