United States - Wagering contracts : the other basket
- United States
- P. Carman
- Derivatives & Financial Instruments, 2009 (Volume 11), No 5
- 1 October 2009
Derivatives contracts may be classified by the nature of the rights of the parties, but they may be classified also based on the function or purpose. An old line of US case law raises a potential for classifying derivative contracts that are neither hedges nor call for delivery as wagering contracts. Losses from wagering contracts are deductible only to the extent of wagering gains.