Better Online Tickets Sales Act

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The Better Online Ticket Sales Act of 2016 (Pub.L. 114-274, S.3183, commonly referred to as the BOTS Act) was signed into federal law by President Barack Obama on December 14, 2016. [1] This act was created to thwart attempts by individuals and organization to automate the process of purchasing tickets en masse using ticket bots. Later, these tickets are often resold on third-party sites for profit at a markup over face value, or at a loss. This activity is also referred to as ticket scalping. The BOTS Act outlawed the resale of tickets purchased using bot technology and set a fine of $16,000 for violations of the act, which is enforced by the U.S. Federal Trade Commission.

Contents

Purpose of the act

The bill was first introduced in the U.S. House of Representatives (114th Congress) in February 2015 by U.S. Representatives Paul D. Tonko (D-N.Y.) and Marsha Blackburn (R-Tenn.). The BOTS Act was created specifically to prohibit the circumvention of purchase control and ticket allocation measures used by Internet ticket sellers to ensure equitable consumer access to tickets for certain events. Ticketmaster recently sued Prestige Entertainment under the claim that Prestige used ticket bots to purchasing nearly 40% of tickets to the Broadway production of Hamilton and nearly half of all tickets to a Floyd Mayweather and Manny Pacquiao boxing match in 2015. [2] The bill was designed to penalize any party who are knowingly trying to circumvent a security measure, access control system, or another control measure of a ticket seller that is used by the ticket issuer to enforce event ticket purchasing limits or to maintain the integrity of online ticket purchasing order rules. If someone is found to have sold tickets violating the above intentions, that person can then be prosecuted.

This legislation empowers the Federal Trade Commission to act if they have reason to believe a violation of the BOTS act has occurred. States also have the right to form class action suits on behalf of multiple ticket holders.

Ticket bots

A ticket bot is a software program that automates the process of searching for and buying tickets to events on ticket vendor platforms, such as Ticketmaster. Using bots, a broker can automate the process of searching for and buying tickets so that it happens in a flash, and conduct hundreds or even thousands of transactions at the same time. As explained by Consumer Reports, “Bots enable resellers to buy tickets in bulk by automatically completing online forms faster than a human can do by hand, submitting multiple entries at lightning speed, and bypassing authentication codes on websites intended to deter such software.” [3]

Market analysis

A 2016 study by the New York Attorney General found that only 46% of tickets are ever made available to the general public while 54% are reserved for insiders and other specially delegated recipients (such as holders of special credit cards, to name one example). [4] This small supply created conditions where tickets resold after initial purchase was valued on average 49% above face value. In some instances, the report found, ticket prices on the secondary market were 1000% or higher above face value. This created a strong incentive for unscrupulous resellers to use bots to quickly buy as many tickets as possible to profit from the strong demand for a comparatively small number of tickets.

Commercial reaction

While the BOTS Act was a legislative act signed into law in the United States, it set into motion a variety of changes to how the online ticket resale market reported its ticket sourcing.

Notable changes include:

Congressional Budget Office report

According to a report by the Congressional Budget Office conducted specifically about the BOTS Act, the CBO estimated that increased costs related to monitoring and enforcing the new prohibitions established by the law would total less than $500,000 per year. [6]

In addition, the CBO estimated that enacting the BOTS Act would increase federal revenues from civil penalties imposed to enforce the new prohibition; therefore, pay-as-you-go procedures apply. However, CBO estimated that those collections would be insignificant because of the small number of cases that the agency would probably pursue.

Existing state regulations

Prior to the passing of the BOTS Act, several U.S. states already had their own legislation which bans the use of scalping bots for the ticket resale market. They include the following:

Regulating botted ticket scalping is not exclusive to the United States, as multiple foreign countries have adopted similar legislation. Ticket scalping is illegal for all or for some types of events in the United Kingdom, [12] Sweden, [13] Australia, [14] Israel, [15] and the Canadian province of Ontario. [16]

Related Research Articles

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Ticketmaster Entertainment, LLC is an American ticket sales and distribution company based in Beverly Hills, California with operations in many countries around the world. In 2010, it merged with Live Nation under the name Live Nation Entertainment.

A reseller is a company or individual (merchant) that purchases goods or services with the intention of selling them rather than consuming or using them. Individual resellers are often referred to as middle men. This is usually done for profit. One example can be found in the industry of telecommunications, where companies buy excess amounts of transmission capacity or call time from other carriers and resell it to smaller carriers.

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TicketsNow was an online ticket retailer. It was founded in 1992 by Mike Domek and headquartered in Woodstock, Illinois.

<span class="mw-page-title-main">SeatGeek</span> Ticket platform

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In Milgram v. Orbitz Worldwide, LLC, the New Jersey Superior Court held that online ticket resellers qualified for immunity under Section 230 of the Communications Decency Act (CDA), and that such immunity preempted a state law consumer fraud statute. The opinion clarified the court's test for determining whether a defendant is acting as a publisher, the applicability of the CDA to e-commerce sites, and the extent of control that an online intermediary may exercise over user content without becoming an "information content provider" under the CDA. The opinion was hailed by one observer as a "rare defeat for a consumer protection agency" and the "biggest defense win of the year" in CDA § 230 litigation.

TicketNetwork is an online marketplace that provides an outlet for buyers and sellers of tickets to live entertainment events. The company was founded in 2002 by ticket broker Don Vaccaro and software developer Doug Kruse. It operates several retail sites and partners with large name brand travel and media companies.

<span class="mw-page-title-main">DICE (ticketing company)</span>

DICE is a ticketing software company based in London, United Kingdom. Its web and mobile technology products enable users to search, browse and buy tickets to all kinds of live events, including concerts, festivals, comedy shows and other types of performances or talks. DICE gained popularity as a ticketing app for its strong stance against scalping, implementing guardrails within its products to limit fraud and price gouging. DICE also develops technology products for live show organisers and promoters for them to manage event marketing and better understand their audiences.

Bot prevention refers to the methods used by web services to prevent access by automated processes.

<span class="mw-page-title-main">Taylor Swift–Ticketmaster controversy</span> Concert tour ticket sales issues

The American ticket sales platform Ticketmaster and the parent company Live Nation Entertainment received widespread public criticism and political scrutiny over blunders in selling tickets to the United States leg of the Eras Tour (2023), the sixth concert tour by the singer-songwriter Taylor Swift, in November 2022.

References

  1. ↑ "S.3183 - BOTS Act of 2016". 14 December 2016.
  2. ↑ "Ticketmaster Sues Broker Over Use of 'Bots' to Buy Up Tickets". Bloomberg. 2 October 2017 – via www.bloomberg.com.
  3. ↑ "Why Ticket Prices Are Going Through the Roof".
  4. ↑ "Obstructed View: What's Blocking New Yorkers from Getting Tickets" (PDF).
  5. ↑ "Google clamps down on ticket resale websites". BBC. 7 February 2018.
  6. ↑ "S. 3183, Better Online Ticket Sales Act of 2016". 30 September 2016.
  7. ↑ "2014 California Code :: Business and Professions Code - BPC :: DIVISION 8 - SPECIAL BUSINESS REGULATIONS :: CHAPTER 21 - Ticket Sellers :: 22505.5".
  8. ↑ "New York Consolidated Laws, Arts and Cultural Affairs Law - ACA § 25.24 - FindLaw".
  9. ↑ "ORS 646A.115 - Software prohibited that interferes with sale of admission tickets to entertainment events - 2015 Oregon Revised Statutes". www.oregonlaws.org.
  10. ↑ "§ 212.1. Unlawful ticket purchasing software".
  11. ↑ "39-17-1104". search.mleesmith.com.
  12. ↑ DIGITAL ECONOMY BILL (PDF). United Kingdom Parliament Department for Culture, Media and Sport. 2017.
  13. ↑ "Ticket touts to face unlimited fines". BBC News. 11 March 2017.
  14. ↑ Lieu, Johnny (20 October 2017). "Lawmakers try their hand at banning ticketing bots, but it's not the end of them". Mashable .
  15. ↑ "Israeli Knesset debate prior to enacting the 67th amendment to the Israeli Penal Code". Israeli Knesset.
  16. ↑ "Ontario to tackle scalper bots, real estate rules in broad consumer protection bill".
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