The US Commodity Futures Trading Commission has approved an application to launch The Trend Exchange, a market where investors can trade futures contracts based on opening-weekend movie revenues in the United States.
The contracts will allow investors to buy shares estimating the box-office take with the possibility of making gains, or losses, depending on the actual revenue.
The contracts are aimed at muting the considerable financial risks associated with producing major films, much the same way that farmers protect themselves from crop risks through corn and wheat futures contracts.
The motion-picture futures contracts are based on "commodities" and "are not readily susceptible to manipulation and serve an economic hedging purpose," the CFTC said in a statement announcing its decision.
But the vote was close, with two of the commission's five voting members disagreeing that film box-office revenue is a commodity.
"Unless some sensible judgment is exercised, we could approve terrorism contracts, or contract on whether a certain movie star will die or become disabled, or contract on the likelihood of UFOs hitting the White House," Bart Chilton, one of the two dissenters, said in a separate statement.
The CFTC backed up its decision by citing other contracts based on non-price-based measures of activities or events, such as a possible company merger or acquisition or weather disasters.
The commission had delayed its decision several times in the face of strong opposition led by the mighty Motion Picture Association of America, controlled by the major Hollywood film studios.
The MPAA failed to convince the regulator that the futures contracts could be susceptible to manipulation and damage the reputation of a movie with the public or with financial sources before it opens in theaters.