Non-obstacles to CFTC-regulated political event derivatives
No, they should not for the simple reason that Las Vegas propositions are not exchange-traded contracts. They are more like OTC forwards and warrants than futures and options. The CFTC has lilimited authority over non-forex, non-fraudulent off-exchange transactions.
Also, casinos do not derive any material revenue from games corresponding to the types of event contracts the CFTC would consider for approval, thus there is no real chance of casinos lobbying the relevant Congressional committees, the members of which have little affinity to gambling interests in any case.
Finally, there cannot be any doubt that political event derivatives serve an economic purpose. I think the chances are greater than 50% that presidential election contracts will trade on a DCM within the next 16 months. If not, the CFTC should seek statutory clarification of event derivatives going into their next reauthorization, although this should not be necessary in light of their approval of credit event futures and Hedgestreet's economic release options.