The chance of the government shutdown lasting more than 30 days is now almost 50%, according to wagers on the prediction market Kalshi. These platforms, where users put money on the outcome of almost any question you can think of, got a lot of attention around the presidential election last year for correctly predicting the winner when traditional polls were hazier.

This week two of the biggest ones, Kalshi and Polymarket, have gotten a lot of investment: a $300 million round of funding for Kalshi, and a $2 billion sum for Polymarket from parent company of the New York Stock Exchange, Intercontinental Exchange. The platforms have been growing, largely driven by sports offerings. Just last weekend Kalshi brought in a record $538 million, and 98% was on sports.

Since a Supreme Court decision in 2018 cleared the way for states to allow sports betting, the market has exploded said Victor Matheson, an economist at College of the Holy Cross. Last year Americans laid down about $150 billion on games.

“Any way for a company to get into that market, especially if they can get in through the back door, that's a big potential market for them,” Matheson said.

Matheson called it the “back door” because prediction markets aren’t regulated like sports betting platforms. What they’re offering is considered a contract between two parties, there’s no house in the gambling sense.

That means they can operate everywhere, even big states where sports betting is illegal like Texas and California. 

“They call it not betting, but for a typical sports better, it's largely indistinguishable,” Matheson said.

Until recently, traditional betting platforms had the edge on parlays, where you wager on multiple outcomes at once, like the Dodgers will win the World Series and score at least five runs in the final game.

But Kalshi has been catching up, with new user-friendly tools to make parlay bets easy, said analyst Brandt Montour at Barclays.

“So, they basically built a front end for the user experience that mimics the front end of a traditional online sports book,” Montour said.

The similarity is not lost on observers.

“You know what they say — if it looks like a duck, talks like a duck, walks like a duck, it's a duck,” said Daniel Wallach, an attorney specializing in sports gaming.

He said there’s a growing list of lawsuits challenging the legality of sports contracts on prediction markets and the issue is likely to go to the Supreme Court.