TICKET SCALPING EXPLAINED

Lucrative business

Events like concerts, sports tournaments, or stand-up comedies have been a staple for many fans. Obviously not as vital as food or water, but still capable of producing a high popular demand and shortages. As such, getting a ticket for some popular event, not to mention a convenient seat, may sometimes border on a miracle. And just like goods and products in times of deficiency and shortages, this is when speculators come. Such speculations were particularly common in the former Soviet Union, where they offered hardly accessible Western goods, like jeans or chewing gums.

How it works

Some persons may acquire tickets and then sell them for prices higher than official ones, typically whenever there’s a shortage of tickets. Diehard fans may buy such tickets no matter what. This speculative practice of selling tickets is called ticket scalping. Although its legality varies, depending on the country, ticket scalping has long been regarded as a contentious issue. Ticket scalpers rob of the ability to purchase tickets at face value and impair general ticket availability by mass buyouts. As shown by ExpressVPN,  this creates a vicious cycle where increased ticket prices attract more scalpers to the market, perpetuating the problem. On top of that, it rewards those who do nothing except buy lots of tickets before anyone else can. Online ticket-selling platforms contributed to an increase in both fans and scalpers buying tickets en masse and reselling them. Ultimately, demand for an event is driven up, and the overall ticket prices are inflated. 

Attempts to curb

The dubious nature of ticket scalping is not new. Back in 1994, an article by Andrew T. Williams in “Managerial and Decision Economics” asked, “Do Anti-Ticket Scalping Laws Make a Difference?” The article also stated that “economists typically view transactions between willing buyers and willing sellers, such as ticket scalping, as welfare improving” and that “they also view any interference with free market transactions as suspect and as possible evidence of rent harvesting”. 

A particular facet of the ticket scalping history is the Ticketmaster’s saga. In November 2022, Ticketmaster made headlines after its website crashed during the ticket presales for Taylor Swift’s concert tour. After hours-long nuisances, Ticketmaster temporarily suspended sales blaming the high demand. Then a bot cyberattack was blamed. It was reported that the event organizing industry has faced “industrial scale ticket scalping” that allegedly contributed to the Swift presale mishap. Ticketmaster asked Congress to make ticket scalping largely illegal in the United States. The proposed way was expanding the Better Online Ticket Sales Act—legislation from 2016 that aims to prevent the use of bots to mass-purchase tickets.

Some other countries have taken steps to restrain ticket scalping. For example, in Australia, the Major Events Act 2009 protects eventgoers from being robbed by ticket scalpers and ensures that tickets to major events are widely available. When the Australian government declares an event as major, it becomes illegal to sell or advertise for resale tickets for more than 10 per cent above face value. Ticket package sellers in Australia are required to be authorized by the event organizer.

Ticket scalpers and ticket brokers

Some ticket scalping laws distinguish between a ticket scalper and a ticket broker. The rationale behind that is to bring the resale market closer to a purely competitive free market model. But others view the distinction between ticket scalpers and ticket brokers as unsuccessful, stating that tickets are still being sold at prices as high as 1300% above face value. This, in turn, hinders individuals with lesser incomes from access to public events.