Name the multi-billion dollar industry that has been barred from managing its considerable risks.
No, it's not the movie business, silly as that rejection (passed by Congress, no less) may be. That ban was supported by Hollywood itself, even though the Motion Picture Association of America is seldom mistaken as the nation's moral compass.
It is the most precious of democratic institutions - elections. They are both revered and wildly expensive.
Forget, for the moment, that modern elections have tended to yield remarkably underwhelming public servants. No, don't forget. The frightening cost of getting elected is an important contributor to those outcomes.
Why, Johnson, you surprise me! How can you support turning elections into giant betting schemes? Well, let's think about that. National policy allows (indeed, encourages) me to bet on soybeans and crude oil and gold bars. Why? Because there is an industry for each of them that can then manage its risks, a good thing.
The same is true for elections, in my view. Campaigns cost boatloads of money that is contributed by non-politicians and that looks like an imbecile expenditure if the backed candidate loses.
And then there are the variable costs of advertising, of printing campaign literature, of renting campaign offices, of vying for becoming the convention site, and even keeping that bus on the road.
So, who is at risk? Not the candidates but the TV networks, the printers, real estate agents, host cities and even the local mechanic. Each could lose big if it is bypassed or the major political parties (or, today, the Super PACs) field wannabes that the public fails to embrace.
Futures tied to election outcomes are a proxy hedge for the many mainstream industries that face a boom or bust result, but that are encouraged to take the risk anyway.
Isn't it odd that we prohibit risk management when one of our most sacred rights is involved?
Nadex is disappointed that the Commodity Futures Trading Commission (CFTC) rejected our political event contracts. While we will review the CFTC’s decision, we felt strongly that these products met all legal and regulatory criteria for listing and that the public would benefit from having these products traded on a US based, regulated exchange, rather than an unregulated offshore venue as currently is the case. That said, Nadex continues to offer retail market participants the opportunity to trade binary options and spread contracts in a broad range of financial markets that are unaffected by this decision which was limited to election contracts.