Yesterday U.S. regulators gave the go ahead for Cantor Futures Exchange, a market that will give speculators a way to bet on expected movie box office receipts.
The major Hollywood studios and cinema chains are staunchly opposed to the trading of movie futures contracts, calling it a form of legalized gambling.
The Motion Picture Association of America has said that they are:
“…united in our opposition to a risky online-wagering service that would be detrimental to the motion picture industry”.
I think they have a point.
Given the amount of people in the industry with access to sensitive information about various projects isn’t there a huge risk of insider trading?
Although studios have apparently already tightened up how tracking numbers (the data that essentially predicts how much a film is going to earn) are released, information will always find a way to get out.
There is a certain irony that this was approved just days after President Obama finally decided to clamp down on the casino-style capitalism of Wall Street banks that almost caused the global financial system to collapse.
Isn’t there a lesson to be learned from the Goldman Sachs story currently unfolding?
Senator Blanche Lincoln (D-Ark.) has included a ban on movie futures trading in the financial reform bill that is set to be debated in a committee today (Wednesday).
Cantor Fitzgerald, the backer of the futures market, said in a statement it appreciated the “excellent work” of the commission, with a final decision expected in June.
My prediction? A major scandal, which is then swiftly adapted into a movie.
After all, this wouldn’t be the first time Hollywood has made a tale about the perils of insider-trading.