As expected, the Commodity Futures Trading Commission approved Cantor Exchange’s proposal to begin selling futures contracts based on the box office success of feature films. This was not a surprise, since the CFTC gave a unanimous thumbs-up last week to a similar program proposed by the Media Derivatives-backed Trend Exchange.
The Motion Picture Association of America continues to battle against programs it considers a thinly veiled gambling operation, but the MPAA now will set its sights on Capitol Hill. Tomorrow, the Senate Agriculture Committee will review a bill that is part of a package of financial reforms that will be pushed by Democrats. That bill would outlaw the business that the CTFC at least temporarily has approved in principal.
“Our coalition of film industry workers, creators, independent producers and distributors, business organizations and theater owners, remains united in our opposition to a risky online-wagering service that would be detrimental to the motion picture industry and the 2.4 million Americans whose livelihoods are based on this industry,” said MPAA spokesman Howard S. Gantman. “We believe that the CFTC had ample discretion under the law to reject this proposal by Cantor Futures Exchange L.P. But this is just one in a series of upcoming regulatory steps, and the Commission made clear today that Cantor needs CFTC approval before attempting to offer a box-office wagering service. In the upcoming days, we will continue to urge the CFTC to finally reject both the Cantor proposal and a separate proposal by Media Derivatives, Inc.
“Separately, members of Congress have also raised serious questions about the financial harm that these proposals could cause,” he said. “Senator Blanche Lincoln, chairman of the Senate Agriculture Committee, has introduced legislation that contains a provision banning such box-office wagering services. A markup on this bill is scheduled tomorrow. And on Thursday, the House Agriculture Subcommittee on General Farm Commodities and Risk Management, chaired by Representative Leonard Boswell, will be holding a hearing on the issue.”