Looming US shutdown exposes structural flaws in prediction markets

The looming threat of a partial U.S. government shutdown, set to begin Jan. 31, has exposed structural limitations in prediction markets like Polymarket, CoinDesk reported. While the U.S. Senate has passed a budget bill, a vote in the House of Representatives has not yet been completed, making a shutdown imminent. CoinDesk noted that although a brief weekend shutdown would have a limited impact on the American public, it has created chaos for contracts on prediction platforms such as Polymarket and Kalshi. The core issue is that different contracts use varying criteria to define what officially constitutes a shutdown, leading to conflicting interpretations and resolutions for the same outcome. This situation highlights the critical importance of contract specificity and reveals a key vulnerability in the prediction market ecosystem.