USCA4 Appeal: 25-1892
Doc: 16
Filed: 10/15/2025
Pg: 20 of 97
involve risk-based speculation, many states initially decried them as “gambling in grain. ” Cothran v. Ellis , 16 N.E. 646, 647 (Ill. 1888); see also John V. Rainbolt II, Regulating the Grain Gambler and His Successors , 6
Hofstra L. Rev. 1, 6 (1977) (documenting states’ treatment of futures trading
as unlawful gambling) . In fact, many “anti - gaming” and so- called “ anti-
bucket shop” laws were originally enacted to make it “as difficult as humanly possible to trade futures. ” John H. Stassen, The Commodity Exchange Act In Perspective , 39 Wash. & Lee L. Rev. 825, 826 (1982) (quotation marks
omitted).
In 1884, the Supreme Court agreed that a futures contract was
“nothing more than a wager” if the parties intend a cash settlement rather than actual delivery of the underlying commodity. Irwin v. Williar , 110 U.S.
499, 508-509 (1884). Then, in 1905, the Court acknowledged the legitimacy
of cash settlement and blessed “[s]peculation” as a “means of avoiding or
mitigating catastrophes, equalizing prices, and providing for periods of want.” Bd. of Trade of Chi. v. Christie Grain & Stock Co. , 198 U.S. 236, 246- 249 (1905) (Holmes, J.). In the 1920s, anti-futures sentiment intensified, prompting federal efforts to regulate futures. Stassen, supra , at 829-830
(noting denouncement of the Chicago Board of Trade as “the world’s greatest
gambling house” ).
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