MUMBAI: In the wake of a decision by a federal commission to allow wagering on motion picture box-office numbers, a broad entertainment industry coalition charged that the gaming plans were “no more than over-under bets on a movie’s performance” and urged Congress to finalize the ban already approved by the Senate.
Despite opposition from the Directors Guild of America (DGA), the Independent Film and Television Alliance (IFTA), the International Alliance of Theatrical Stage Employees (IATSE), the Motion Picture Association of America (MPAA) and its member companies, and the National Association of Theatre Owners (NATO), the Commodity Futures Trading Commission (CFTC) approved a request from Media Derivatives, Inc. (MDEX) to create a designated contract market for the trading of financial derivatives based on box-office number futures.
MPAA president and interim CEO Bob Pisano said the proposed MDEX contract, and a separate proposal by the Cantor Futures Exchange L.P., which is still pending before the CFTC, “serve no public interest and, to the contrary, can significantly harm the motion picture industry and impose new, substantial costs that do not exist today. These are proposals that ought to be under the jurisdiction of the federal gambling and gaming laws, not the federal commodity trading laws. 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.”
Recognizing the serious problems that could be caused by these proposals, the Senate has approved a ban on trading derivatives based on box-office numbers, as part of a much larger financial reform bill. A House-Senate Conference Committee began meeting last week to finalize the bill and send it back to both Chambers for final approval.
“These proposed contracts fail to demonstrate that they serve the public purpose futures contracts should serve, they are highly susceptible to potential manipulation, and pose real possible economic damage to an industry that employs over 2.4 million men and women working in virtually every state in the country. We support banning them as the Senate bill does, and hope that the final bill approved by Congress and signed by President Obama retains the prohibition,” Pisano said on behalf of the Coalition.