We have many Democrats and Republicans pushing for sports gambling in Atlantic City, New Jersey. There’s no prospect of success because it would be against federal law and is opposed by the professional sports leagues. (Also, some old-fashioned people like me don’t like legalized gambling, but it’s a bit late for that.)
I now see that our leaders’ failure is in not thinking big enough. A film futures market has just been approved. This amounts to gambling on how movies will do in the box office. Perhaps you think I am too harsh in calling it gambling, that this is a way for studios to hedge against the huge risks in their productions, improving our financial productivity. Nope, the studios oppose the creation of this “market.” It is purely gambling. Congress opposes the market too:
CFTC Commissioner Bart Chilton called it a “popcorn prediction market,” and Senate Judiciary Committee members warned CFTC Chairman Gary Gensler in a letter yesterday of the risk of “creating perverse incentives for movie failure that may undermine the integrity of the industry.”
Despite being opposed by everyone you would think matters, federal law required regulators to approve Cantor Fitzgerald’s “market.” Trading in movie contracts sounds amusing, but these kind of “markets” played a big role in our current economic disaster. I’m going to write next week about how we got into this absurd situation, but for now I “tongue-in-cheek” suggest that our legislature figure out how to create a public derivatives market in Atlantic City. If those contracts happen to involve the Eagles, or Ironman II, or Kobe Bryant, all the better.