No Political Betting For Nadex… For Now
If last night was any indication, the political betting arena should be an exciting one. Too bad the North American Derivatives Exchange (Nadex) won’t be able to take part, at least for the time being.
The Exchange’s request to offer contracts on the outcome of political events as early as this week was denied by the Commodity Futures Trading Commission on Tuesday.
But all is not lost. The CFTC plans to review the request over the course of a 90-day period.
CFTC member Bart Chilton was the only individual of the five-member Commission to oppose Nadex’s plans, but even he seemed opened to it at some point down the road.
“It makes some sense to take a closer look at how these contracts would work, and consider any real economic utility,” Mr. Chilton said in a statement Tuesday. “I just don’t want these regulated markets to turn into some entertainment gambling orgy endeavor.”
The Wall Street Journal noted that the Dodd-Frank regulatory overhaul law prohibits gaming in regulated markets like futures, where farmers and ranchers agree to sell their output at a predetermine price or airlines hedge the price of jet fuel. The 2010 law also banned contracts related to terrorism, and last year the CFTC refused to allow futures contracts based on movie box office revenues.
- Aaron Goldstein, Gambling911.com
