The US government is set to partially shut down at midnight, despite the Senate voting in favor of a funding package to keep the government running – showing the importance of specificity in predictable market contracts.
The House of Representatives is out of session this week and will not return until Monday. Because the House must pass the package the Senate passed Friday night, that means the government will technically shut down at 12:00 PM ET Saturday and will likely remain closed through the weekend. It is only a partial shutdown and should not have a significant effect on US residents.
In this way, the shutdown differs radically from the previous US government shutdown, which was the longest in the nation’s history and saw federal employees go without pay for well over a month while lawmakers negotiated upcoming health care premiums.
Polymarket and Kalshi contracts, which let users bet on whether or not the government will shut down, varied in how they precisely defined a government shutdown, showing the importance of specificity for these event contracts.
“This market will settle to ‘Yes’ if the US Office of Personnel Management (OPM) announces another shutdown of the federal government due to lapses in appropriations by January 31, 2026, at 11:59 PM ET. Otherwise, this market will settle to ‘No,'” one contract read. Under this contract, a partial shutdown qualifies as a shutdown, but most importantly, it depends on OPM announcing a shutdown.
Earlier on Friday night, it put the odds at 88%, having risen steadily from 40% over the past 24 hours, despite reporting from Thursday that made it clear the House would not be able to vote until Monday.
A similar Kalshi contract likewise pointed to OPM as its way of verifying the outcome of the bet. Chances of a shutdown were 93% at press time, having increased from 44% over the past 24 hours.
OPM’s media response email did not immediately return a request for comment on whether it would announce a shutdown.
Other bets were more specific. One Polymarket contract allowed users to bet on how long the government could remain shut down, with one, two and three-plus days all seeing 90%+ chances at press time. A Kalshi counterpart suggested that players gave “more than [two] days” over 90% odds.
Another Polymarket contract, which asked if government funding would lapse on January 31, had a 99.6% chance at press time, defining a lapse as “the president failing to sign the relevant bill(s) extending government support” by 10 p.m. 11:59 p.m. ET Friday night — which, again, he can’t do until the House votes on the package.
