The US Commodity Futures Trading Commission (CFTC) has given its approval to a scheme that would allow futures to be sold based on box office film receipts.
Hollywood studios have opposed numerous similar proposals in the past with the Movie Picture Association of America (MPAA) claiming that the trading would be equivalent to legalised gambling and could damage the reputation of the industry.
This specific ruling refers to plans by Media Derivatives, which will be available to large investors and institutions. A decision on a further proposal – The Cantor Exchange – is due later in the month. The Cantor Exchange would be open to smaller investors.
“These are proposals that ought to be under the jurisdiction of the federal gambling and gaming laws, not the federal commodity trading laws,” said Bob Pisano, president and interim CEO, MPAA. “It is unfortunate that the CFTC has now given the go-ahead to a new gambling platform that could be plagued by financial irregularities and manipulation.”