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Movie box office: Real betting is on the way

GamblingGambling: Movie box office: Real betting is on the way

People in the industry like to place little wagers on the weekend boxoffice. They're probably nothing more than five bucks, or a coffee shop lunch if "x" beats "y" this weekend. That sort of thing.

That's about to change, though, in a major way. Soon, everyone will be able to bet on the boxoffice, and make or lose lots of money on the outcome.

Cantor Fitzgerald's Howard Lutnick is right now beta testing something called The Cantor Exchange. Lutnick already operates the Hollywood Stock Exchange, where players trade "virtual" shares of everything including stars, directors, films, etc. (See more below.)

CX, as it will be known, is a different story. Cantor is awaiting regulatory approval before it launches officially. When it does, the boxoffice could become an interesting, maybe even dangerous, game. It's real money, and it sure looks like anyone can play, even studio execs and theater distributors.

From now until December 31, the firm has something called "It Pays to Practice," in which they give traders fake money but convert it into small amounts of real cash winnings.

The trading on this market will go on 24/7, meaning as a weekend progresses, a film's values will go up and down along with investors. For a surprise hit like "The Blind Side," this could be a bonanza.

More importantly, speculating on films' futures will begin six months before their release dates. If CX were live now, believe me, the betting on James Cameron's looming, maybe $500 million, gamble on "Avatar" would be the main focus of the site. And that should prove controversial, because there will inevitably be reports on what a film's perceived business will be even as it's being prepared and marketed.

The effect of all this could be harrowing, to say the least, especially for a studio's finances. PR wars could become intense in a whole new way to spin advance word one way or another.

Hollywood Stock Exchange set to launch real-money stakes

Hollywood Stock Exchange is tentatively set to launch as a real-money commodity exchange April 20.

A spokesman said the exchange is "on track" to begin listing films' boxoffice projections for live trading from that date. HSX filed with the U.S. Commodity Futures Trading Commission for approval as an active trading site in November 2008 and recently entered the final phase of regulatory review.

Since 1998, HSX has allowed just-for-fun traders to buy and sell valueless shares in Hollywood films based on forecasts of what the pics will ring up. Once launched, a new HSX site will list current and imminent movie releases with their projected four-week domestic grosses and allow exchange users to take long or short positions on the films.

A formal announcement about rules and guidelines for HSX users is expected closer to the launch. The exchange hopes to lure hobbyist investors as well as industry professionals, though the latter will be prohibited from improper insider activity.

For instance, distribution execs with access to early boxoffice data will be barred from making trades on the exchange after a film has opened. But film financiers will be allowed to invest in HSX an amount equal to a minority percentage of their total investment in a movie.

Investors wishing to participate in the exchange will buy "contracts" priced at one one-millionth of a film's projected boxoffice, with films to be listed on the exchange from the time productions are announced in the industry trade papers. Trading will begin six months before a movie's anticipated wide release.

HSX is owned by U.K.-based investment firm Cantor Fitzgerald.

"The number of people who visit movie theaters each year and form opinions about a film's success is in the tens of millions," Cantor Exchange president Richard Jaycobs said. "We believe that's the reason the public response to this product has been very positive."

Cantor Entertainment chief Andrew Wing said the exchange targets movie distributors, exhibitors, producers and other investors seeking "an unprecedented public market to create liquidity and hedge their daily business activities."

Until now, HSX revenue has come from industry ad sales and the sale of customer-use data to Hollywood marketing outfits.

Showbiz 411

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4 comments. Last comment 7 years ago by lottocalgal.
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sully16's avatar - sharan
United States
Member #81740
October 28, 2009
44843 Posts
Posted: February 24, 2010, 12:08 am - IP Logged

This could bring day trading to an all new level..for some it could be profitable for others disaster. If this is the new trend . What could it mean to the dow and amex and nasdaq? would we see a massive  pullout in these markets as the money flows into (box office )? stocks would surely take a hit.

America First ! US Flag

    rdgrnr's avatar - walt
    Way back up in them dadgum hills, son!
    United States
    Member #73904
    April 28, 2009
    14903 Posts
    Posted: February 24, 2010, 1:53 am - IP Logged

    90% of Hollywood hates America. That's why I won't see most movies. I can't support those <snip> actors and my country at the same time.

    If a movie doesn't have patriotic Americans like Gary Sinise or Jon Voight or others like them in it I boycott it. I know my boycott doesn't mean a thing in the big picture but it's a matter of principle with me. I will not give pukes like Martin Sheen or Alec Baldwin a nickel of my money.

    I wouldn't be interested in trading their futures either unless I could bring about a collapse, lol. (Of course they'd probably get bailed out anyway) 

    This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.







    "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                --Edmund Burke



      LadyMylena's avatar - avatar6 1.jpg
      United States
      Member #83963
      December 19, 2009
      347 Posts
      Posted: February 24, 2010, 2:10 am - IP Logged

      Most people I know can't afford to go to a movie, let alone bet on one. lol

      Sounds like the rich just getting RICHER to me.

      I have zero interest in doing anything like this. I think I'll just stick with the lottery.

      Luck is  ** believing  ** you're lucky.” ~Tennessee Williams

      Money is neither my god nor my devil. It is a form of energy that tends to make us more of who we already are, whether it's greedy or loving.  ~ Dan Millman

        lottocalgal's avatar - Lottery-043.jpg
        United States
        Member #57222
        December 23, 2007
        587 Posts
        Posted: February 24, 2010, 9:33 am - IP Logged

        One word. Pathetic