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Floor Speech

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Mr. MERKLEY. Madam President, I am taking the floor tonight to ring the alarm bells for our democracy, with grave concerns about the opening up of a casino for betting on our elections.

Imagine this. Election day is approaching. Ultrarich Americans and huge corporations bet billions of dollars on the outcome of which party controls the House of Representatives or bet those same billions on who controls the U.S. Senate. But as the election approaches--it is 45 days out; it is 30 days out--and one or two races might make the difference on whether they win or lose that bet, they now have a huge incentive to spend another vast sum smearing the candidate they want to lose. They now have a vast incentive to spread disinformation to get the outcome that they have wagered millions of dollars on or billions of dollars on. That is a profound corruption of our democracy.

I am sure you are thinking: That could never happen here in America. That is not government by and for the people. That is not elections as a way of choosing who will best lead us forward or cast the votes consistent with our principles. That is, instead, just turning elections into a casino.

But if you think this could never happen here, you are wrong. This isn't fantasy.

Last week, less than 60 days before one of the most consequential elections in the history of our Nation, a Federal district judge--a DC district judge--threw the doors wide open for just such a gambling scheme on our elections, allowing individuals and corporations to bet up to $100 million apiece. No, this is not some research project where people can bet $10 to see, kind of, the influence of whether or not the way people bet is a better prediction than polling. No, this is not a research project. This is vast, powerful people betting huge sums and then, with dark money authorized through Citizens United court decisions, being able to put their thumbs on the scale. That is what happened last Thursday.

Fortunately, shortly after the ruling was announced, it was appealed by the CFTC, or the Commodity Futures Trading Commission, to the circuit court, and the circuit court put a stay on it--a stay that will give them time to think about whether they should allow this casino to go forward at this moment in time. They are going to make that decision, they say, by Thursday, 3 days from now.

So I am ringing the alarm bells that there is an enormous threat to the integrity of our elections. It will be based on a decision of a circuit court 3 days from now. Will they, like the district judge, throw the doors open to the casino, allowing individuals to bet millions of dollars--up to $100 million--and do so knowing those same individuals can then spend massively to put their thumb on the scale and affect the outcome of the election?

Let's go back a little bit to the lead-up to this moment. In 2020, a Wall Street firm called Kalshi was authorized by the Commodity Futures Trading Commission, or the CFTC, to do a limited amount of bets or contracts on events, ranging from what the daily temperature will be in Chicago to what countries will have a recession--lots of event contracts.

Fast forward 3 years, and Kalshi decided to go way beyond that kind of structure, and they filed paperwork to say they wanted to allow an event contract allowing bets on the outcome of who controls the House and the Senate.

Given this unprecedented move and concerns about how this type of action could corrupt the elections, the CFTC initiated a 90-day review period to study the issue and 30 days for public comment. In that comment period, I led a group of fellow Senators to weigh in, urging the CFTC to reject this event contract on elections.

The letter stated:

Mass commodification of our democratic process would raise widespread concerns about the integrity of our electoral process. Such an outcome is in clear conflict with the public interest and would undermine confidence in our political process.

In September of last year, the CFTC agreed, and they rejected Kalshi's request, concluding that betting on elections is contrary to the public interest and would undermine the integrity of our elections.

But Kalshi sued, and that is what put it in to the DC District Court that led to the decision last Thursday of a district court judge siding with Kalshi and allowing them to start offering or taking bets on who controls the House and Senate.

I have in my hand here some of the legal language for the CFTC. Here is what it says:

Under CEA section 5c(c)(5)(C)(i), the Commission may determine that contracts in certain excluded commodities . . . are contrary to the public interest if [they] involve: (1) activity . . . unlawful under Federal . . . law; (2) terrorism; (3) assassination; (4) war; (5) gaming; or (6) other similar activity determined by the Commission, by rule or regulation, contrary to the public interest.

Here is the thing. This law clearly gave the Commission the power to proceed to control gaming. And what is gaming but a bet on an event?

Despite the clear language that is in the law, despite the fact that gambling and gaming are used interchangeably in all kinds of rules and statutes, a district judge said: No concern about the public interest here. We will just throw the doors of the casino wide open.

That is a vast concern, and I am hoping that the DC circuit judges are paying attention to the law having given the power to the CFTC to turn down contracts allowing gaming.

Now, we just had, today, an attempted assassination attempt on former President Trump. Do you want to put contracts on assassinations when you know that people can put their thumb on the scale and actually try to assassinate someone? No. That is why the law is written like this.

Do you want to be able to have people bet on the outcome of an election and then spend vast sums smearing the candidate they want to lose, corrupting the election from the vision of guiding our country forward into a simple gaming exercise about enriching those who cannot just make huge bets but can influence the outcome of those bets? Absolutely not. That is why the law is written in this fashion.

So, at a minimum--at a minimum--the circuit court should stay this decision, not allow this to be unfolding now, less than 60 days before the election, 7 weeks from tomorrow. I think that makes it 43 days--49, 50--50 days, 7 weeks from tomorrow.

It is not OK--not OK--to allow corruption of our elections in this fashion.

I was thinking about the fact that this law allows insider trading. For example, Exxon--that is the decision of the district court--Exxon, an oil company, could be planning to fund a PAC, and that PAC is going to do a huge amount of ads involving disinformation, involving smearing a candidate--maybe, you know, the last 2 weeks of the election. They know that, but they are not banned from betting. So they can turn around and put a massive bet on the outcome of the election while they have the insider information about the huge campaign the PAC is planning that nobody else knows about.

What an incentive to create that type of strategy--a strategy where the very rich and the very powerful can both cast the bet and heavily influence the outcome--not an influence about government by and for the people but about enriching, through a rigged bet, the most powerful people in our country. That is not the purpose of elections. That is why Congress wrote the law the way they wrote it, giving the CFTC the power to turn down this type of event contract.

How about Russia, Russian nationals? Maybe they are lent money. They are here in the country. They can bet on the outcome of this election. Maybe they have allies who can donate to a PAC.

Do you want to further incentivize public disinformation and election rigging by foreign powers? We already know how much China does. We already know how much Russia does. Do we want to give them such an easy platform to make this happen?

There are certain principles core to democracy. One is that citizens have access to the ballot box. A second is the peaceful transfer of power. The third and the theory behind a democracy is that when votes are cast and when campaign donations are made, they are made because the person sees a representative who corresponds to their values.

But in this case, it isn't about a person who corresponds to your values. You may, in fact, want somebody to win who is on the right end of the spectrum, but then you make a huge bet thinking the person on the left end is going to win, so you proceed to heavily smear the very person you, according to your principles, want to win because of your pocketbook now being at risk.

This profoundly affects the public interest. This is a profound corruption of our democracy.

We already have a lot of challenges. Social media is a problem. Cable television presenting different sets of facts in different parts of our universe is a challenge. Bots that create fake commentary, try to create themes that move people and make things appear real that are not real. Voter suppression--that is a challenge. AI, deepfakes are a challenge. The last thing we need is a casino on elections that, at its very core, incentivizes rigged bets contrary to the public interest and election outcomes driven by profit, not driven by values.

So that is where we are. So I hope that the circuit court of DC will pay attention about how much is at risk.

Now, I have noted that the current contract is about who controls the House and who controls the Senate, but once that is allowed, what is to prevent Kalshi from putting up an event contract on the outcome of a specific Senate race or a specific House race? Then we have a ton of really close races. Do we want those really close races to be affected by people betting--a bet up to a hundred million dollars followed by dark money smear campaigns under Citizens United--determining what the outcome of those races is? I think not--not if you believe in the vision of democracy, not if you believe in the vision of a republic, not if you believe that who comes to stand in this room is to be the person you think will honor our Constitution and work toward a better future.

So, Madam President, I will just summarize by saying, just 3 days from today, there could be a decision. It could have a profound impact on the integrity of the coming election. That decision should be a stay that prevents these election contracts. Then this body should get to work and outlaw specifically, in the law, such contracts.

It already appears that they have because it says the CFTC has the power to turn down event contracts based on gaming that are contrary to the public interest. But if one district judge has said that doesn't carry the day, there is another judge out there somewhere who will do the business of helping out some corporation trying to open the doors to that casino.

So let's here come together--Democrats and Republicans, left and right--and say: We care about the integrity of our election, and we will not let this happen. But, first, we need a stay from the court to prevent it from happening this Thursday.

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