By RYAN NAKASHIMA (AP)
LOS ANGELES — Think you're better than Hollywood at gauging whether an upcoming flick will be a box office bomb or a sleeper hit? You'd get a chance to put your money behind that under two proposals that movie studios are denouncing as legalized gambling.
The proposals the U.S. Commodity Futures Trading Commission are expected to rule on this month would let movie fans, industry executives and speculators bet on expected box office receipts. Investors profit if their predictions come true and lose if they don't.
These online trading forums would be similar to futures markets common for commodities such as corn, pork bellies, natural gas and silver. Although goods are rarely exchanged directly through such markets, they let buyers and sellers reduce risks by locking in prices months ahead of time. A corn farmer might want to do that in case a bumper crop pushes prices down too low.
Now, two companies want to bring that concept to Hollywood, a notoriously risky industry in which big-budget productions can go bust in a single weekend and independent movies can become unexpected hits. But the investors most likely to benefit from such an exchange — the six major Hollywood studios — have rallied against the proposals.
Although the companies behind the exchanges still plan to proceed, regulators pushed back a decision on one of the proposals, Trend Exchange from Veriana Ventures, amid the last-minute opposition. A ruling could now come Friday, more than a week later than originally expected.
A decision on the other proposal, Cantor Fitzgerald LP's Cantor Exchange, is expected around April 20.
The studios' trade group, the Motion Picture Association of America, argues that the proposals tarnish the reputation and integrity of the movie industry by authorizing "legalized gambling on movie receipts."
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