Ticket resale

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In this 1920s cartoon by Tad Dorgan, people wishing to attend a boxing match are told that all the good tickets were sold (to "specs" -- that is, speculators) yesterday, even though the match was only announced that morning. Dorgan cartoon about Ticket Scalping.jpg
In this 1920s cartoon by Tad Dorgan, people wishing to attend a boxing match are told that all the good tickets were sold (to "specs" — that is, speculators) yesterday, even though the match was only announced that morning.

Ticket resale (also known as ticket scalping or ticket touting when done for profit) is the act of reselling tickets for admission to events. Tickets are bought from licensed sellers and then sold for a price determined by the individual or company in possession of the tickets. Tickets sold through secondary sources may be sold for less or more than their face value depending on demand, which tends to vary as the event date approaches. When the supply of tickets for a given event available through authorized ticket sellers is depleted, the event is considered "sold out," generally increasing the market value for any tickets on offer through secondary sellers. Ticket resale is common in both sporting and musical events.

Contents

Ticket resale is a form of arbitrage that arises when the number demanded at the sale price exceeds the number supplied (that is, when event organizers charge less than the equilibrium prices for the tickets).

During the 19th century, the term scalper was applied to railroad ticket brokers who sold tickets for lower rates. [1]

Purchase and resale methods

Ticket resellers use several different means to secure premium and previously sold-out ticket inventories (potentially in large quantities) for events such as concerts or sporting events. Established resellers may operate within networks of ticket contacts, including season ticket holders, individual ticket resellers, and ticket brokers. They make a business out of securing hard-to-find and previously sold-out tickets that are no longer available through the official box office.

A ticket scalper selling tickets for a Penn State football game. Ticket scalper.jpg
A ticket scalper selling tickets for a Penn State football game.

Ticket scalpers (or ticket touts in British English) work outside events, often showing up with unsold tickets from brokers' offices on a consignment basis or showing up without tickets and buying extra tickets from fans at or below face value on a speculative basis hoping to resell them at a profit. There are many full-time scalpers who are regulars at particular venues and may even have a pool of loyal buyers.

One common concern with resale is with scam artists selling fake tickets to unsuspecting buyers. Another common scalping practice is to sell tickets that have already been scanned at the venue gate. Entry is typically allowed only when a ticket is scanned for the first time, but unsuspecting buyers may purchase an authentic, but unusable, ticket that's already been scanned.

A concern when buying tickets on the street from a ticket scalper or via an online auction is that the tickets sold by ticket resellers may themselves be stolen or counterfeit. For many major sporting events, counterfeit tickets are auctioned off in the months leading up to the event. Criminals selling stolen or counterfeit tickets are not to be confused with legitimate ticket brokers and individuals who abide by the law to legally resell tickets on the secondary market.

In 2009, Ticketmaster started adoption of a "paperless" restricted ticketing, in which tickets could not be resold. Under this system, customers prove their purchase by showing a credit card and ID. [2] The measure was taken in response to ticket scalping and resale markup of tickets on secondary markets and adopted during Miley Cyrus (2009) World Wonder Tour, although Ticketmaster first experimented it with AC/DC's Black Ice World Tour (2008–10). [3] [4] Ticketmaster has since changed the name of the system to "Credit Card Entry". The system requires large groups to enter together with the person who purchased tickets. Some events have Ticket Transfer which allows the tickets to change ownership and allow for tickets to be transferred through Ticketmaster's proprietary systems. These cannot be later resold or transferred via ticket exchanges such as StubHub. [5]

Ticket presales

Obtaining tickets through presales has become increasingly common. These presales often use unique codes specific to an artist's fan club or venue. The advent of presales has allowed more individuals to participate in reselling tickets outside of a brokers office.

Although derivatives was a practice in use mostly in the 1980s, some ticket brokers offer tickets even before the tickets are officially available for sale. In such scenarios, those ticket resellers are actually selling forward contracts of those tickets. This is often possible if the reseller is a season ticket holder. Season ticket holders generally receive the same exact seat locations year after year thus they can enter a contract to deliver on tickets that they own the rights to, even if those tickets have not even been printed or sent to the original ticket holder.

Automated scalping bots

In recent years, fraudsters have started to use more complex methods by which they obtain tickets for resale on the secondary market. Similar to the technology used to snatch up rare shoes and sneakers, [6] automated bot attacks have become a common way to acquire large numbers of tickets only to resell them for higher profits. Fraudsters will deploy thousands of bots from untraceable IP addresses in a brute force attack as soon as a venue or ticket seller first makes them available for sale. In 2017, one of the largest online ticket sellers Ticketmaster filed a lawsuit against Prestige Entertainment for their continued use of scalper bots despite paying $3.35 million to the New York Attorney General's Office just a year prior. [7] Ticketmaster claimed that Prestige Entertainment was able to lock up 40% of available tickets for performances of the hit Broadway musical Hamilton , as well as a majority of the tickets Ticketmaster had available for the Floyd Mayweather and Manny Pacquiao fight in Las Vegas in 2015. In an effort to curtail such behavior, Congress moved to pass the Better Online Tickets Sales Act of 2016, more commonly referred to as the BOTS act. [8] The legislation was signed into law in December 2016 by then President Barack Obama. The BOTS act enforces several penalties and fines for parties found guilty of using bots or other technology for undermining online ticket seller systems with the hopes of selling them on the secondary ticket market.

Ticket brokering

Ticket brokers operate out of offices and use the internet and phone call centers to conduct their business. They are different from scalpers since they offer a consumer-facing storefront to return to if there is any problem with their transaction. The majority of transactions that occur are via credit card over the phone or internet. Some brokers host their own websites and interact directly with customers. These brokers are able to offer additional services such as hotel accommodation and airfare to events. Other brokers partner with online ticket exchanges. These sites act as marketplaces that allow users to purchase tickets from a large network of brokers. Some brokers offer advice on the best way to buy tickets starting with the box office and working with a broker if tickets aren't available through the box office. [9]

Online ticket brokering is the resale of tickets through a web-based ticket brokering service. Prices on ticket brokering websites are determined by demand, availability, and the ticket reseller. Tickets sold through an online ticket brokering service may or may not be authorized by the official seller. Generally, the majority of trading on ticket brokering websites concerns itself with tickets to live entertainment events whereby the primary officially licensed seller's supply has been exhausted and the event has been declared "sold-out". Critics of the industry compare the resale of tickets online to ‘ticket touting’, ‘scalping’ or a variety of other terms for the unofficial sale of tickets directly outside the venue of an event.

The late 1990s and early 2000s saw the emergence of online ticket brokering as a lucrative business. U.S. corporate ticket reselling firm Ticketmaster developed a strong online presence and made several acquisitions to compete in the secondary markets. Securities analyst Joe Bonner, who tracks Ticketmaster's parent company New York-based IAC/InterActiveCorp, told USA Today: "You have to look at the secondary market as something that is a real threat to Ticketmaster. They missed the boat. StubHub has been around a few years now already. They weren't as proactive as they probably should have been." [10] Ticketmaster launched fan to fan secondary ticket reselling site TicketExchange in November 2005. Ticketmaster acquired former rivals GetMeIn and TicketsNow, [11] while eBay bought StubHub. [12] In 2008, the Boston Red Sox chose Ace Ticket over StubHub to sell their tickets. [13] There are also independently owned online ticket resellers such as viagogo and SeatMarket.

The growth of the ticket resale market has been consistently growing and is expected to expand even further. [14] As a result, teaching platforms such as Ticket Flipping and Ticket Flipping Hub have begun offering materials for prospective resellers to learn best practices. However, criticisms of ticket reselling are common and the reselling of tickets is illegal or highly regulated in some countries. [15]

Criticism

Many event promoters actively discourage ticket scalping, as seen by this sign at the Vancouver Folk Music Festival. The Scalpers Are Cheating The (Vancouver Folk Music) Festival.jpg
Many event promoters actively discourage ticket scalping, as seen by this sign at the Vancouver Folk Music Festival.

For popular events with sold out tickets, resellers may sell the tickets at several times the face value. If resellers buy the tickets and the tickets are not then sold out, then they risk a loss. [16] There may be individuals who wish to attend a popular event (and decide to sell their tickets later) and those that buy tickets in large quantities in order to resell their tickets for a profit. Some countries have restricted the unauthorized resale of tickets.

According to Stephen Barrett of Quackwatch, many online ticket resellers use URLs that are similar to official box-office websites, sometimes implying via their texts or their pictures that they are official, use internet advertising to increase traffic to their website, and don't clearly state the real prices they charge for a ticket. [17]

International responses

It is controversial whether tickets are goods which can be privately resold. Typically, private resale will contravene the original conditions of sale, but it is legally questionable whether the original conditions of sale are even enforceable; however, most venues declare that they have the right to refuse entry to anyone.

Australia

Depending on the ticketing body's conditions of sale, tickets may be voided if they are resold for a profit. This is so with tickets bought from Ticketek, an Australian-based ticketing company. Efforts to clamp down on ticket resale have included labeling tickets with the name or a photograph of the buyer, [18] and banning people without tickets from the vicinity of the event to prevent the purchase of secondary market tickets.

In Australia, the secondary ticket market has been put under much scrutiny in the past few years as ticket scalpers dominated the resale ticket market. Scalpers would purchase tickets in bulk from the promoter hoping that the tickets would sell out causing an increase in demand for tickets and thus an increase in the ticket price. This caused event promoters to put restrictions on the number of tickets that can be purchased in one transaction, which has greatly reduced unfair ticket pricing. After many complaints from the community and event promoters, the Commonwealth Consumer Affairs Advisory Council and NSW Fair Trading conducted a survey discussing scalping issues and released The Ticket Scalping Issue Paper for NSW. [19]

In Victoria, [20] New South Wales, [21] South Australia [22] and Western Australia, [23] the reselling of tickets for more than 10% above its face value is banned; in the latter three states, the use of bots to purchase tickets is also banned.

In recent efforts to combat illegal ticket scalping and enforce resale laws, Australia has seen the emergence of responsible ticket resale companies employing advanced technologies. Australian regulations [24] stipulate that ticket resellers must conspicuously display key information to potential buyers. This includes a clear statement indicating that the service being used is a ticket resale platform, thereby not directly affiliated with primary ticket providers. Additionally, it is imperative that these platforms provide a comprehensive breakdown of the ticket's cost, comparing the original selling price to the resale price, hence offering transparency about the markup. This total cost can be determined through various means such as the price indicated on the ticket.

Canada

Quebec put into law "Bill 25" in June 2012, making it illegal for ticket brokers to resell a ticket for more than the face value of the ticket without first obtaining permission from the ticket's original vendor. Brokers reselling tickets are required to inform consumers the tickets are being resold and must tell consumers the name of the ticket's original vendor and the original face value price. The penalty to violating the law includes fines of $1,000 to $2,000 for the first offense, and as much as $200,000 for repeated violations. [25]

In Ontario, reselling the tickets above face value is prohibited by the Ticket Speculation Act and is punishable by a fine of $5,000 for an individual (including those buying the tickets above face) or $50,000 for a corporation. [26]

Effective July 1, 2015, in an effort to protect consumers from purchasing fraudulent tickets, Ontario created an exemption under the Ticket Speculation Act to:

Following an announcement in 2016 that The Tragically Hip's lead singer Gord Downie had been diagnosed with terminal brain cancer, the band held the Man Machine Poem Tour. Ticket resellers reportedly purchased two-thirds of all available tickets, to capitalize on public demand. [28] As a result, in 2017, Ontario announced legislation to attempt to crack down on scalper bots. [29]

Ireland

In the Republic of Ireland, there are at present no laws against ticket touting, and it is common at online outlets such as Premiertickets.ie or Needaticket.ie. In 2011, the Minister for Jobs, Enterprise and Innovation, Richard Bruton, declined to pass a law against touting, saying it would just drive resellers to websites based abroad. [30] [31] Ticketmaster, Ireland's main ticket seller, runs a service called Seatwave which resells tickets, some at wildly inflated prices. [32] However, selling tickets in a public place (e.g. outside a venue) is illegal under the Casual Trading Act, 1995 — in 2015 Kazimierz Greń, an official of the Polish Football Association, spent the night in a cell after being arrested for selling tickets outside an Ireland–Poland football match. [33]

Israel

In Israel, in 2002, The Knesset put into effect the 67th amendment to the Israeli Penal Code, enacting Section 194a, which outlaws ticket scalping. The new section states that unlicensed persons reselling tickets at above face value will be subject to fines. The new addition to the penal code enabled police to fight the ticket scalping of sports and music events (especially those scalpers that bought massive numbers of tickets for the sole purpose of resale), which were causing much distress to the public and enabled scalpers to evade paying taxes, but since no law strictly outlawed the practice, could not be legally fought prior to the new law. [34]

Sweden

Ticket resale by scalpers above face value is legal in Sweden regardless of limitations imposed by event organizers. [35] [36]

United Kingdom

In the United Kingdom, resale of football tickets is illegal under section 166 of the Criminal Justice and Public Order Act 1994 unless the resale is authorized by the organizer of the match. Secondary ticketing market StubHub have signed partnership agreements with Sunderland and Everton for 2012/13 season, whilst competitor Viagogo hold partnerships with Chelsea and other clubs.

Other than in the case of football tickets, there is no legal restriction against reselling tickets in the UK, although individual organisations (like Wimbledon) may prohibit it. [37] [38]

In July 2016, several prominent music managers in the UK including Ian McAndrew, Harry Magee, Brian Message and Adam Tudhope came together to fund a new initiative called the FanFair Alliance, to work towards tackling the issue of 'industrial-scale online ticket touting'. [39] [40]

United States

A sign prohibiting tickets sales at any price Beware Sox Scalpers.jpg
A sign prohibiting tickets sales at any price

In the United States, ticket resale is a $5 billion industry. [41] Ticket resale on the premises of the event (including adjacent parking lots that are officially part of the facility) may be prohibited by law. These laws vary from state to state, and the majority of US states do not have laws in place to limit the value placed on the resale amount of event tickets or where and how these tickets should be sold. Ticket resellers may conduct business on nearby sidewalks, or advertise through newspaper ads or ticket brokers.

New York State law only permits prices above face value by the greater of $5 or 10%. [42]

Some US states and venues encourage a designated area for resellers to stand in, on, or near the premises, while other states and venues prohibit ticket resale altogether. Resale laws, policies, and practices are generally decided, practiced and governed at the local or even venue level in the US and such laws and or interpretations are not currently generalized at a national level. [43]

Another issue in the US is that since ticketing laws vary by state, many ticket resellers use a loophole and sell their tickets outside of the state of an event. [44]

Selling tickets by ballot

Some promoters have ceased selling tickets in the traditional first-come-first-served manner, and require prospective ticket holders to enter a "ballot" – a competition with random winners – with the prize being the opportunity to purchase a small number of tickets. The ballots are intended to discourage reselling by making it harder to purchase large numbers of tickets because being at the front of the queue does not guarantee the holder a ticket.

Events that have sold tickets by ballot include the Big Day Out in 2007, [45] the Ahmet Ertegün Tribute ConcertLed Zeppelin reunion concert at The O2 Arena in 2007, and the 2006 Commonwealth Games. [46]

A similar practice used among ticket resellers is to list an item as an online auction (such as eBay) – most commonly an innocuous item such as a collector's card – and give the tickets as a bonus to the winning bidder; thereby not actually selling tickets in order to circumvent ticket laws. This does not actually get around eBay's selling rules, as they effectively state that the goods that the buyer receives are what the seller is selling, including any free bonuses.

Selling tickets at auction

Ticketmaster sells tickets in online auctions, which may bring the sale price of tickets closer to market prices. The New York Times reported that this could help the agency determine demand for a given event and more effectively compete with ticket resellers. [47]

Online auction sites like eBay only enforce state ticketing laws if either the buyer and/or seller resides in the state where the event is taking place. Otherwise, there is no resale limit for tickets.

Personalized tickets and other responses

Glastonbury Festival, which sold out 137,500 tickets within less than two hours in 2007, [48] introduced a system in the same year whereby tickets included photographic ID of the original buyer, to enforce non-exchangeability. [49]

For taping of Comedy Central's The Daily Show and The Colbert Report , tickets were free. However, identification of ticket holders is checked when entering and while standing in line, and most notably when progressing from the entrance queue into the studio space. These measures serve effectively as a means of preventing those reserving these sought-after tickets from selling them for a cash value upon reservation.[ citation needed ]

Some ticket sellers allow buyers to provide personal information in exchange for being allowed to buy tickets earlier. [50]

Other uses

Though scalping is most commonly associated with ticket sales, the process of buying desirable commodities and selling them off for a higher rate has proven lucrative with other items, particularly electronic devices such as mobile phones, video game consoles, and computer hardware. In some cases, internet resellers have developed automated bots to purchase bulk quantities of newly-released items on e-commerce websites as soon as they become available. Customers have argued that this generates an unfair advantage for the scalpers, adding to an already controversial practice, and many sites have begun implementing anti-bot measures to combat such tactics. [51]

See also

Related Research Articles

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.

<span class="mw-page-title-main">Reseller</span> Company or individual that buys goods or services for resale

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. Resale can be seen in everyday life from yard sales to selling used cars.

The secondary market, also called the aftermarket and follow on public offering, is the financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold. The initial sale of the security by the issuer to a purchaser, who pays proceeds to the issuer, is the primary market. All sales after the initial sale of the security are sales in the secondary market. Whereas the term primary market refers to the market for new issues of securities, and "[a] market is primary if the proceeds of sales go to the issuer of the securities sold," the secondary market in contrast is the market created by the later trading of such securities.

Tour promoters are the individuals or companies responsible for organizing a live concert tour or special event performance. The tour promoter makes an offer of engagement to a particular artist, usually through the artist's agent or music manager. The promoter and agent then negotiate the live performance contract. The majority of live performance contracts are drawn up using the American Federation of Musicians (AFM) standard contract format known as the AFM Performance Agreement.

<span class="mw-page-title-main">StubHub</span> American ticket brokering company

StubHub is an American ticket exchange and resale company. It provides services for buyers and sellers of tickets for sports, concerts, theater, and other live entertainment events. By 2015, it was the world's largest ticket marketplace. While the company does not currently disclose its financials, in 2015 it had over 16 million unique visitors and nearly 10 million live events per month.

Viagogo, stylized by the company as viagogo, is a multinational ticket exchange and ticket resale brand. It is recorded in the United States (Delaware) and has been owned by StubHub since 2021. It was founded in London in 2006 by Eric Baker as an online marketplace for consumers to buy and sell tickets to sports, music, theatre and comedy events.

<span class="mw-page-title-main">Sneaker collecting</span> Hobby of acquisition and trading sneakers

Sneaker collecting is the acquisition and trading of sneakers as a hobby. It is often manifested by the use and collection of shoes made for particular sports, particularly basketball and skateboarding. A person involved in sneaker collecting is sometimes called a sneakerhead.

Green market products are previously owned products that have been previously used and put back into productive use. These products are often repaired, refurbished and recycled by brokers, resellers or the original manufacturer. They are suitable for resale to customers as a lower cost alternative to buying new goods from standard distribution channels.

Online ticket brokering is the resale of tickets through a web-based ticket brokering service. Prices on ticket brokering websites are determined by demand, availability, and the ticket reseller. Tickets sold through an online ticket brokering service may or may not be authorized by the official seller. Generally, the majority of trading on ticket brokering websites concerns itself with tickets to live entertainment events whereby the primary officially licensed seller's supply has been exhausted and the event has been declared "sold-out". This "sold-out" status increases the ticket's potential market value. Critics of the industry compare the resale of tickets online to ‘ticket touting’, ‘scalping’ or a variety of other terms for the unofficial sale of tickets directly outside the venue of an event.

Seatwave was an online ticket marketplace for buying and selling tickets to music, sporting and cultural events. Seatwave was founded in May 2006. Ticket sellers used to be able to list their tickets on Seatwave and specify what price they would be willing to sell them for. Buyers could browse the site, compare ticket prices and could then purchase the ticket they feel was the best deal.

A ticket exchange, also known as a secondary ticket outlet, is a market where tickets are bought and sold. Ticket exchanges allow people to buy and sell tickets online. Typically, ticket exchanges are used by individuals wanting to buy or resell tickets from other individuals rather than from the event the ticket is for. Originally, this industry was dominated by street-based touts working outside large events and venues, buying tickets cheaply from people who had spares and selling them on to last-minute buyers. While some street touts may still exist, the advent of the internet has transformed the practice. Secondary markets today are predominantly online. There are two niches of ticket exchanges, also called secondary marketplaces: event tickets and travel reservations.

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

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.

Recommerce or reverse commerce is the selling of previously owned, new or used products, mainly electronic devices or media such as books, through physical or online distribution channels to buyers who repair, if necessary, then reuse, recycle or resell them.

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">12-12-12: The Concert for Sandy Relief</span> Benefit concerts held in 2012

12-12-12: The Concert for Sandy Relief was a benefit concert that took place at Madison Square Garden in New York City on December 12, 2012.

<span class="mw-page-title-main">Shows of a Lost World</span> 2023 concert tour by the Cure

Shows of a Lost World was a concert tour by British rock band the Cure. The North American leg of the tour sold over 547,000 tickets and grossed $37.5 million over 35 shows, making it the highest-grossing tour of the band's career to date. The South American leg of the tour commenced in September 2023 and consists of three standalone concerts and four festival appearances.

Ticketbis is an online platform where users can buy and sell tickets to events. Founded in Spain in 2009 by Ander Michelena and Jon Uriarte, the company operates under the secondary ticketing market alongside several others including industry giant StubHub. Ticketbis is currently present in 31 countries.

The Better Online Ticket Sales Act of 2016 was signed into federal law by President Barack Obama on December 14, 2016. 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.

<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. Media outlets described the demand for the Eras Tour's tickets as "astronomical", with 3.5 million people registering for the Ticketmaster's Verified Fan pre-sale program in the U.S.

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