Meta is building a prediction markets app. These stocks are falling in response

Meta Platforms CEO Mark Zuckerberg has directed staff to create a prediction market platform, according to a New York Times report on Tuesday. 

Two employees with knowledge of the plans said the app — referred to internally as “Arena” — would be separate from Meta’s social media platforms, Instagram and Facebook, the report said. 

The Times added that the prediction market app would rely on a video-game style points system for trading, rather than actual money, in contract to other prediction market platforms where traders wager money to speculate on future events. The report said money may be used on the Meta app in the future.

Meta would seek to leverage its Facebook and Instagram user base to direct potential traders to the platform, the report said. 

The company declined a request for comment by the Times, and did not immediately respond to a request from CNBC. 

Sports betting platform DraftKings fell more than 2% after the report was released, reaching its low of the day. The stock was last down 1%. FanDuel parent Flutter Entertainment also fell nearly 2% after the report. 

Flutter and DraftKings have both struggled over the past year on worries about how prediction market platforms — which offer sports-related event contracts — could disrupt their sports gambling businesses. 

Trading platform Robinhood, which offers contracts from various prediction market platforms, also declined after the Times report.