[Congressional Record Volume 170, Number 143 (Monday, September 16, 2024)]
[Senate]
[Pages S6046-S6048]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Elections

  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

[[Page S6047]]

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

[[Page S6048]]

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.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. SCOTT of Florida. Madam President, I ask unanimous consent that 
the order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.