In a 3-2 vote, the Commodity Futures Trading Commission on Monday afternoon approved a contract created by the company Media Derivatives that would allow traders to bet on the gross receipts that a movie pulls in during its opening weekend.
Media Derivatives already won CFTC approval for the exchange on which these contracts would be traded the Trend Exchange -- but it needed the CFTC to sign off on the contract in order to allow traders to begin placing positions.
The idea of betting on future box-office receipts has faced vociferous opposition from the movie industry, led by the Motion Picture Assn. of America, which has said that the contracts would be vulnerable to manipulation and could even hurt how movies perform in theaters.
The decision Monday could still be counteracted by legislation that seeks to ban any trading in box-office futures. The Senate has approved such legislation, but it would need to be approved by the House of Representatives to make it into the final financial reform bill.
Federal Commission Approves Box-Office Futures Trading
Box-office futures have passed a final regulatory hurdle, clearing the way for the first bets to be placed in the near future, and overcoming objections by Hollywood that sought to block it.
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