Meta prediction market app hits DraftKings, Flutter shares

Meta Platforms CEO Mark Zuckerberg has directed staff to build a prediction market platform, the New York Times reported Tuesday, sending shares of sports-betting operators lower.

The app, referred to internally as "Arena," would operate separately from Instagram and Facebook, two employees with knowledge of the plans told the Times. The report said Arena would initially use a video-game style points system rather than real money for trading, though the company may add real-money wagering later.

Meta declined to comment to the Times and did not immediately respond to a request from CNBC.

DraftKings fell more than 2% after the report, touching its session low before recovering to trade down about 1%. Flutter Entertainment, the parent of FanDuel, dropped nearly 2%. Both stocks have faced pressure over the past year as prediction market platforms offering sports-related event contracts raised concerns about potential disruption to traditional sports gambling.

Robinhood Markets, which offers contracts from several prediction market platforms, also declined after the report.

Meta's Alpha Score sits at 58/100, a Moderate rating. NYT, which broke the story, carries a 50/100 Mixed score. Flutter rates a 28/100 Weak score.