As the U.S. government begins its partial shutdown, uncertainty looms regarding its duration. Observers speculate whether it will persist for just a few days or extend into weeks. While definitive answers rest with Capitol Hill and the White House, interest in predicting the length of the impasse has surged, prompting platforms like Polymarket and Kalshi to launch betting markets on the potential outcomes.
Currently, Republicans hold majorities in both the House of Representatives and the Senate; however, they require support from at least seven Democratic senators to pass any spending bill, given the 60-vote threshold necessary to advance most legislation in the Senate. In this scenario, Democrats are leveraging their position to advocate for the continuation and enhancement of tax breaks for approximately 24 million Americans who obtain insurance through the Affordable Care Act (ACA). They have thus far withheld their support for any spending bill that fails to address these tax breaks.
Republicans have indicated a willingness to consider fixing the expiring ACA tax breaks but are only backing a temporary funding solution that would sustain the government until November 21. This stopgap bill does not incorporate any alterations to ACA subsidies.
Current projections from Polymarket suggest a robust belief among its users that the shutdown may extend into mid-October or beyond. The platform assigns a 35% probability that the closure will last at least 15 days, with over $200,000 contributed towards the possibility of an extended halt in government operations. Users likewise estimate a 28% chance that the government will reopen either between October 6 and 9 or between October 10 and 14. In contrast, the likelihood of reopening between October 3 and 5 is just 7%, and before October 2 is considered almost negligible, at less than 1%.
On the Kalshi platform, participants gauge the duration of the shutdown similarly, anticipating it will last at least four days but potentially more than ten days. There is an 89% chance on Kalshi that the shutdown will exceed four days and an 87% likelihood for a duration extending beyond five days. The probability drops to 54% for a shutdown lasting more than ten days, and only 33% for a closure exceeding 15 days. Notably, durations shorter than three days are perceived as highly unlikely, with better than 90% odds against such brief interruptions.
Prediction markets, like Polymarket and Kalshi, facilitate betting on the outcomes of various events, such as political occurrences and natural disasters. Each “event contract” allows participants to wager on a yes-or-no outcome that pays $1 to the winning side. This unique system fosters peer-to-peer betting, differentiating it from traditional sportsbooks where bets are placed against the platform itself.
Polymarket’s recent revitalization comes after receiving approval from the Commodity Futures Trading Commission (CFTC) to resume U.S. operations, following prior legal challenges. The nature of betting on significant events raises profound ethical questions, as captured by commentary surrounding its impact on public discourse and decision-making.
As this partial shutdown unfolds, there is hope on the horizon that constructive negotiations could pave the way for a resolution that benefits all involved.