Polymarket and Kalshi Face Limits in U.S. Government Shutdown Prediction Markets

The recent political battle to avert a U.S. government shutdown has highlighted the operational constraints faced by leading prediction market platforms Polymarket and Kalshi. These event-driven markets, which allow users to trade on the outcome of real-world events, saw significant betting activity on whether Congress would pass a funding bill. However, the episode underscored the platforms' vulnerability to regulatory scrutiny and market caps on contract volumes. While demonstrating public interest in such financial instruments, the event also revealed the challenges these crypto-adjacent platforms encounter within the current U.S. regulatory framework, potentially impacting their growth and the broader adoption of prediction markets.