The U.S. government is expected to partially shut down at midnight, despite the Senate voting in favor of a funding plan to keep the government running, showing the importance of specificity in market forecasting contracts.
The House of Representatives is out of session this week and will not resume until Monday. Since the House must pass the package passed by the Senate on Friday night, that means the government will technically shut down at midnight ET on Saturday and likely stay closed through the weekend. This is only a partial shutdown and is not expected to have a significant effect on U.S. residents.
In this sense, the shutdown differs dramatically from the previous U.S. government shutdown, which was the longest in the country’s history and saw federal employees go unpaid for more than a month while lawmakers negotiated upcoming health premium increases.
Polymarket and Kalshi contracts allowing users to bet on whether the government will shut down vary on the exact definition of a government shutdown, demonstrating the importance of specificity for these event contracts.
“This market will answer ‘Yes’ if the U.S. Office of Personnel Management (OPM) announces another federal government shutdown due to expiration of appropriations by January 31, 2026 at 11:59 p.m. ET. Otherwise, this market will say ‘No,’” one contract reads. Under this contract, a partial shutdown is considered a shutdown, but it is primarily dependent on OPM announcing a shutdown.
Earlier on Friday evening, he gave a probability of 88%, having steadily increased from 40% over the past 24 hours, despite reports on Thursday making it clear that the House would not be able to vote until Monday.
A similar contract from Kalshi also stated that OPM was a means of verifying the outcome of the bet. The probability of a shutdown was 93% at press time, up from 44% in the last 24 hours.
OPM’s media response email did not immediately respond to a request for comment on whether or not it would announce a shutdown.
Other bets were more precise. A Polymarket contract allowed users to bet how long the government could stay closed, with one, two, and more than three days, with over 90% odds at press time. A Kalshi counterpart suggested punters were giving “more than [two] days” with a probability greater than 90%.
Another Polymarket contract asking whether government funding would expire on Jan. 31 had a 99.6% probability at press time, defining failure as “the President failing to sign the relevant bill(s) extending government funding” by 11:59 p.m. ET Friday night — which he can’t do until the House votes on the package Monday.
