Statement of Commissioner Bart Chilton on MDEX Application Regarding Box Office Receipt Contracts
June 14, 2010
Approving the contract violates the law. It does so because of the following: Popcorn Prediction Markets would serve no national public interest, nor do they satisfy the fundamental federal statutory requirements relating to the definition of a “commodity.” The Commission has never before approved any contract of this kind, and there is no demonstrated need nor necessity, or even a fabricated chorus call for them. What I do know is this: Popcorn Prediction markets would be subject to manipulation because the natural users, movie studios who have invested tens of millions of dollars in a film, would have a heavy hand in controlling the box office returns upon which the final price of the contracts would be based. Likewise, if we were to firewall the studios from participating, I do not envision more than occasional use of the markets. Therefore, Popcorn Prediction Markets would not result in the actual managing and assuming of price risks—something required for our approval. If we approve these types of things on the arguments posed in favor of them, we could be approving things like death pools or terrorism contracts, something Congress surely never intended.
Last Updated: June 14, 2010