House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Minutes of Evidence

Memorandum submitted by the Department for Culture, Media and Sport (DCMS) and the Department of Trade and Industry (DTI)

INTRODUCTION

1. This memorandum sets out the position of DCMS and the DTI on the subject of ticket touting. It provides further consideration of the questions the Select Committee has asked in Annex A.

2. The Department for Culture, Media and Sport (DCMS) is responsible for supporting and promoting the activities that enhance the quality of life for all: the arts; sport; the National Lottery; tourism; libraries; museums and galleries; broadcasting; the creative industries including film, architecture, and advertising; press freedom and regulation; licensing; gambling; the historic environment; the listing of historic buildings and scheduling of ancient monuments; the export licensing of cultural goods; and the management of the Government Art Collection and the Royal Parks. In addition, DCMS is the lead Government Department for the preparations for the 2012 London Olympic Games.

3. DCMS's interest in ticket touting stems from its potential impact on the performance arts, entertainment and sports sectors which primarily stage events and which attract the greatest degree of touting for tickets. This has a consequent impact on audiences and delivery of the Department's PSA target on increasing participation. [48]

4. DCMS works in partnership with the Department of Trade and Industry (DTI) in respect of policies relating to ticket touting and consumer protection. Relevant DTI responsibilities include consumer protection and extending competitive markets. The DTI's interest in the ticket touting agenda largely relates to fairness of consumer contracts, competition and transparency as to what is offered at what price.

5. The DTI has a close working relationship with the Office of Fair Trading (OFT), which is a non-ministerial Government Department established by statute in 1973. The OFT's mission is to make markets work well for consumers. It achieves this by promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive.

6. Britain hosts many world class events and enjoys a rich mix of art and sports events that have a global reputation. By the OFT's estimates, turnover on ticket sales grew by approximately 150% in real terms between 1999 and 2003. In 2003, the OFT estimated the total value of advance ticket sales in the UK at approximately £1.4 billion.

7. This growth in demand, combined with the accessibility of the Internet, has led to the growth of a ticket resale market. Different events or series of events have different degrees of regularity, popularity and touting issues.

8. "Ticket touting" can mean different activities including: bulk buying of tickets by individuals or organised groups of people anticipating demand to resell for a premium (above face value); buying unwanted tickets (potentially lower than face value) to resell; and individuals selling unwanted ticket(s) for profit or at face value.

9. It should be recognised that a secondary market in tickets (tickets sold by persons other than the event promoter or authorised agents) is perfectly legitimate if the promoter's conditions of sale permit resale. 46[49] Secondary markets are a normal feature of an open market economy, and in general have a useful role to play. The term ticket touting (or "scalping" as it is known in the US and Australia) is sometimes used to apply to all secondary sales but is more commonly attached to the unauthorised resale of tickets, meaning those reselling tickets acquired from the primary market without approval to sell these tickets onwards where this is pursued by a business. Unauthorised resale of tickets also takes place on the secondary market by consumers selling to other consumers.

10. Illegal activities which involve fraud and forgery of tickets are already subject to criminal law and dealt with by the respective enforcement authorities.

11. The Government has been interested in:

(a) whether there are benefits to the consumer through ticket resale activities; and

(b) the resulting impact on events (both sporting and cultural) such as whether financial harm is being caused or fans are being affected in any way.

12. There are arguments about the principle of whether ticket resale for profit is right or wrong, fair or unfair and whether economic interests are being harmed in any way. These are complex issues which are explored in more detail in Annex A.

13. Ticket touting carries with it moral and emotional weight for fans and for those running events. It has always been open to primary agents to take action against secondary agents if these businesses resell tickets in breach of contract with the primary agent. But the Internet has facilitated a wider secondary market, both through companies which sell tickets directly to buyers and through companies which offer web-based facilities for ordinary consumers to sell to and buy from each other. The Internet contains a number of new websites that provide a trading platform where one person can resell a ticket to another at a specified cost. These websites take a percentage in fees for providing the platform. There are other websites, for example Scarlet Mist, which enables fans to resell tickets for music events at face value only. A major difference between traditional forms of reselling—such as newspaper classified advertisements—and sales on the web is that transactions are extremely large in number and potentially short in duration. eBay for example is of the view that it is not practical physically to review items for sale. They will, however, remove items that are shown to be in breach of any legal requirement.

EVIDENCE GATHERING

14. Through a series of high level meetings over the past 18 months (known as the ticket touting summits) [50]DCMS has been working with stakeholders across the markets to understand these issues and to identify whether industry-led solutions to the concerns can be delivered or whether government intervention is required. Balancing the consumer interest with the health of the sporting and cultural sectors in this country has been DCMS's guiding principle.

15. Through the representations that DCMS has received, what became apparent is that the secondary market has altered in recent years with the advent of the Internet. The secondary market has evolved, and is one where consumers now resell tickets to each other (for profit or otherwise), and where there are an increasing number of businesses facilitating this trade.

16. eBay has been the only regular attendee throughout the summit process from the secondary market. eBay generates the most criticism from those in the primary market due to the quantity of tickets that are resold on its website. eBay argue that consumers have the right to buy and sell tickets to each other on its website, and this trade does not contravene its policies of offensive articles. It has removed listings for tickets for Live8 and the Concert for Diana previously for reasons of uniqueness.

17. In accordance with the summit principles agreed by summit members in April 2006, [51]DCMS encouraged ticket agents and event owners to find solutions and provide mechanisms to improve the market place for consumers to mitigate the effects of ticket touting. This included returns/refund mechanisms; reviewing ticket distribution arrangements (ie timings and release of tickets, number of tickets any one individual can purchase) and measures to prevent attempts by individuals or groups to remove tickets from the primary market in bulk for profiteering purposes.

CONSUMER INTEREST

18. At the third summit, Ministers asked for a view from consumers on ticketing and the secondary market in particular. DCMS commissioned a study (based on focus group research) which was presented to the fourth summit in February 2007. [52]The headline findings were that consumers found a secondary market acceptable; that consumers needed more information about purchasing tickets including clarity about what their rights are; but the perception was that while touting, misrepresenting or selling tickets not yet released was potentially immoral and consumers do not describe internet-based ticket sellers as touts.

19. There have been other surveys in this area including ones by eBay, the New Musical Express (NME), BBC Online and a recent YouGov survey commissioned by the England and Wales Cricket Board (ECB). Based on the research available, consumers' views seem to point in two directions:

(a) consumers want a legitimate secondary market where they are able to buy and sell to one another and feel that this market should not be regulated; and

(b) at the same time, some consumers do not want the markets to be exploited by touts and consider legislation is needed to prevent resale of tickets for profit. Consumers generally do not regard themselves as touts when they resell or dispose of spare tickets for profit.

DEPARTMENTS' CURRENT POSITION

20. While the Government recognises that there has been a significant redirection in the way the secondary market works, it is not proposing to legislate to ban secondary sales in general. But the Government does have concerns about whether the secondary market in tickets is affecting consumer confidence and the impact on the sport and entertainment sectors by those who exploit normal ticket supply distribution systems to remove tickets released at face value for private gain. For instance the recent consumer survey conducted by YouGov showed that a majority viewed "ticket touts" and internet auction sites equally unfavourably. Through the summits, DCMS has facilitated dialogue and attempted to push industry stakeholders to find solutions. The Departments continue to encourage improvements in both primary and secondary markets. But it would appear that market-based voluntary agreements to deal with these concerns are not working well enough, for example, in the case of the recent BBC Radio 1 Big Weekend event (see paragraph 58). The Internet has unbalanced the arrangements around ticket sales because the technology allows people to purchase a ticket at face value as soon as tickets are released to then resell for a mark up back to fellow consumers minutes later and until new arrangements are put in place, these issues will remain.

21. DCMS and the DTI consider that legislation is a last resort and would prefer effective self-regulation to strike a sensible working balance. Legislation does exist for the 2012 Olympic Games and football for reasons other than to simply prevent profiteering through ticket resale. DCMS acknowledges that there are concerns about the existence of anomalies created by a two tier approach to protecting events, but extended regulation of tickets must be justified in its own right (this is covered in more detail in Annex A). The legislation that exists for the Olympic Games provides protection for tickets for Olympic events only. However, other sports events being held at the same venue a week later for example will not be protected under this legislation.

CROWN JEWEL EVENTS

22. DCMS considers that a case can be made where there are some events of particular importance or significance to the nation that warrant protection from private profiteering. DCMS recently consulted experts behind events in the UK (known as the Major Events Group) on what might constitute an event of national significance. A starting point for these discussions was the list that exists for television rights. [53]

23. The criterion that guides the listing of an event in this respect relates to whether the event has special national resonance, not simply significance to those who follow it and is likely to command a large television audience. A possible second area includes events that are promoted for charity and not for personal gain; free and publicly funded; and tickets deliberately priced below market value for a public interest reason (for example, to encourage families to attend so that children are encouraged to participate in sport or so that committed members of grassroots sports clubs can attend).

24. This will be consulted on and options for the protections of ticketing arrangements for such events from touts will be considered. Voluntary agreement with the secondary market for suitably designated events would be preferable, but the Government will consider the scope, implications and effectiveness of any regulation needed to protect these events if voluntary measures prove ineffective.

SUMMARY

25. The rationale for any regulatory intervention in this market must be based on a clear understanding of the harm being caused and what needs to be controlled or prevented. Financial harm is not immediately obvious. Those in the primary market staging events receive revenue from ticket sales regardless of what happens to the ticket once it has been purchased. Fees attached to tickets are allocated between agent, promoter and venue depending on the event and on the arrangements that exist between event promoters and venues on the one hand and between larger ticket agents on the other. [54]There is a need for the primary ticket market to be as responsive and transparent as possible to fans/consumers and as effective as possible in controlling access to high demand events.

26. But there is a wider argument from the primary market operators about whether it is right that others (both consumers and business) should profit from the popularity of particular artists, sports teams or the success of the events' sectors. There are complexities within this and a sophisticated market is in operation that has established itself on the Internet. The way tickets are released and distributed can cause consumer frustration when tickets are sold out in minutes, and then reappear on the secondary market moments later. But the secondary market has quickly become one where consumers buy and sell to each other, and consumers generally have a right to do this.

27. There are many consumers who use the secondary market to pass on tickets without wishing to make a profit. In general a secondary market can be beneficial and provide fans with the ability to acquire tickets for particular events if they were unable to purchase a ticket when initially released. It also allows consumers to dispose of tickets that they otherwise would not have used. The Government supports the work the OFT is doing with the Society of Ticket Agents and Retailers (STAR) on model contract terms which could be used by all their members.

28. While some consumers want a liquid and effective secondary market and feel regulation is unnecessary in this area, others feel that exploitation in this market should be dealt with where tickets are being sold on at massively inflated prices.

29. Where primary market ticket distribution systems are being infiltrated by organised individuals or groups of individuals to remove tickets for the sole purpose of resale on the secondary market, DCMS has taken a view that primary agents must continue to implement controls to prevent this. But with the increase in consumer-to-consumer resale websites, it is this kind of activity that is arguably creating the bulk of tickets being resold.

30. At present, Government does not see a case for any new regulation or restriction of secondary ticket sales in general. DCMS is nonetheless concerned that the secondary market as it operates could undermine sporting and entertainment events, consumer confidence and the country's ability to continue to attract world class events—meaning that international sports bodies could prevent international fixtures taking place in the UK because of an absence of ticketing controls—but this does not necessarily mean statutory controls. Sports bodies and their ticketing agencies continue to have a responsibility in this respect. In sport, there is an increasing trend by international governing bodies to write into bid requests that host nations must control ticketing in similar terms to those that exist for the Olympic Games. A recent example of this is the International Cricket Council's (ICC) requirement for the UK hosting the ICC Twenty20 World Cup Championships in 2009. This is of national significance if the UK misses out on hosting such events because ticket controls are not in place.

31. In parallel, with a continuing broad interest in all measures to improve ticket markets, both primary and secondary, DCMS has responsibility for promoting its sectors and in terms of sport, its objectives are aimed at ensuring accessibility and encouraging wider participation, helping to create a more active nation and improve performance. It is particularly important to protect sporting events in the run-up to 2012 where the Government is committed to using the Olympic Games to inspire more people to get involved in sport.

32. DCMS is therefore considering whether ticketing for particular events ("crown jewel" events) should be protected either through voluntary or regulatory means. This is where an event clearly has "national resonance". While new legislation remains an option, non-regulatory measures such as voluntary agreements between Government and internet-based sites will continue to be investigated first before new regulatory burdens are proposed.

33. Ultimately, the Government must act in the public interest, and welcomes the views of the Committee as part of this debate, to ensure that the UK continues to maintain the high standards which make it an excellent place to host the world's greatest sporting and other events.

Annex A

1. The Underlying Causes and its Impact on Performers, Promoters and the Public

34. As for all commodities, tickets have a clearing price, which is the price at which the demand for a good exactly equals the supply. The fact that tickets can sell for more than their face value on the secondary market demonstrates that for some events, event owners and promoters charge a price that is below the clearing price. There are a number of reasons why primary sellers may choose to do this. Some in the industry say that it ensures attendance, builds and retains a fan base and maintains a reputation of accessibility. Another may be that pricing at a level below the potential clearing price mitigates against risk and secures a guaranteed income stream. Primary sellers may not charge the clearing price because it is uncertain what it is for certain ticketed events which may fluctuate over time. For example, due to the weather forecast for an outdoor event or the success of a sports team in a tournament and current selling practices do not allow different prices to be charged over time.

35. Evidence indicates that demand is growing and some people are willing to go to great lengths and expense to attend their chosen event. Many more people are interested in live sport and music and are willing and able to travel further to see their favourite teams or bands and choose to buy tickets at their convenience. There is evidence that consumers are becoming time-poor but cash-rich and some rely on the secondary market to source tickets, albeit for a premium price. [55]

36. Some representing the primary market consider that the sheer number of these consumers, each selling small amounts of tickets, now make up the bulk of the secondary market and have become "ticket touts".

37. Ticket resale is caused by two main factors:

(a) the ability of organised individuals, groups or fans themselves to acquire a volume of tickets creating a bulk for onward sale; and

(b) prices being set lower than the market will bear.

38. In some cases the absence of an effective returns mechanism for unwanted tickets may also be a factor. Accordingly, the system of distributing tickets from the primary market either from event organisers themselves or authorised ticket agencies means that the primary market's control over what happens to tickets is diminished soon after tickets are released onto the market.

39. Tickets for certain events are sold well in advance of the actual date. For example, tickets for Take That went on sale in March 2007 but the concerts will not take place until December 2007. In May 2007, it was reported that the O2 (the Dome) had sold one million advance tickets for events over the coming year, but the first concert to be held there will not happen until June 2007. The primary market can influence consumer buying habits, requiring them to plan ahead which can arguably have the effect of encouraging ticket touting, as some consumers are not prepared to purchase tickets so far in advance but are prepared to a pay a premium for a ticket at their convenience or nearer the time of the event.

40. The impact is unclear in the absence of a study on this market and whether harm is being caused to the consumer or the events, but ongoing concerns continue to be put forward by the sport and entertainment sectors. Those primarily affected by ticket touting are: the consumer; the entertainment industry (music, dance, theatre); performers and artists; sports bodies and sports men and women; and authorised ticket agencies, venues and distributors that have contractual agreements with the event.

41. Concerns that have been presented to DCMS by sport and music representatives include:

(a) those who engage in ticket resale for profit including ordinary fans prevent genuine fans from buying tickets at face value by removing tickets (estimated at up to 15%) from primary distribution channels to resell with a price mark up;

(c) touts create public nuisance problems, providing a black market and undermining security arrangements. Consumers do not receive the normal consumer protections when purchasing from a tout instead of an event organiser or authorised ticket agent, as the main consumer protection legislation applies to those selling to consumers in the course of a business; and

(d) online sites knowingly facilitate breaches in terms and conditions attached to tickets when tickets are resold.

42. But there are other points worth considering:

(a) primary stakeholders may want to protect the market in order to maximise their profits;

(b) legal restrictions on or prohibitions in respect of the secondary market might not necessarily end touting, but could drive it into the hands of organised criminals;

(c) the primary market has failed in part to address touting through the absence of key mechanisms, and tickets not released to the general public still find their way onto the secondary market;

(d) consumers value the secondary market but object to the illegal activities of touts involving fraud and forgery; and

(e) some internet facilitators in the secondary market have taken steps to protect consumers. For example, by guaranteeing ticket delivery and refunds.

2. The Impact of the Internet upon Trade in Tickets

43. The Internet has enabled unparalleled growth for live events and ticket agents by reaching a broader market through technology that makes it far easier and more efficient for consumers to purchase tickets. The way businesses and consumers use the Internet has changed the way tickets are bought and sold. The Internet has made it possible for anyone to trade electronically from home, and some of these informal traders are routinely buying and selling tickets through internet websites and auction sites.

44. In some cases there is evidence that consumers may be unsure which agents are actually the authorised suppliers of tickets and which are not. [57]In some circumstances, consumers may not even know that they are buying a ticket from a fellow consumer. The OFT and Consumer Direct already provide information for consumers about buying tickets.

45. Consumer protection legislation applies to the Internet as it would any other market place—in particular, to require traders to provide clear price indications and to prohibit misleading commercial practices. But while websites which facilitate consumer-to-consumer resale provide consumers with an efficient mechanism to resell tickets to each other, in these transactions, the rules which apply to business to consumer transactions do not apply. What makes auction sites and other internet sites unique is that the "churn" of tickets is much greater and quicker. The equivalent in the physical marketplace could be a newspaper classifieds section.

46. Through the summit process, eBay agreed to improve the information displayed around ticket resale in accordance with the 1994 price indication regulations, and has made its terms and conditions relating to ticket sales more transparent.

3. Whether or not resale of a ticket, at face value or at a higher value should be permitted in principle; and whether the acceptability or otherwise of resale depends on the circumstances in which tickets are offered for resale

47. Live ticketed events are a commodity which some event owners have argued are different to other products or services. A ticket provides the access to that commodity but has become a commodity in its own right which can be bought and sold conferring the right to enter a venue to watch an event. Event owners and promoters have contested that unauthorised resale does not confer that right and terms and conditions seek to prevent tickets from being sold on. When approached by event owners and promoters about preventing tickets being resold on its website, eBay have stated on previous occasions that this is a contractual matter between the promoters of an event and the owner of the ticket and eBay does not take sides in private contract disputes.

48. Some ticket agents do not provide refunds once the ticket is sold in the same way that goods can be returned to a shop. [58]These types of terms and conditions have been the subject of consideration by the OFT as part of its work with STAR.

49. Consumers appear to want and value a secondary market in tickets. What they are opposed to is abuses within this market including the wholesale removal of large amounts of tickets for particular events from normal primary ticketing distribution channels to resell for vastly inflated prices.

50. To prohibit consumers from reselling tickets for profit could potentially be unfair but the OFT considers that it may be possible to argue that in specific circumstances such prevention could be permitted, for example where tickets are meant for concessionaires (eg wheelchair users).

4 Whether or not tickets terms and conditions banning transfer and onward sale are fair or enforceable

51. The Unfair Terms in Consumer Contract Regulations 1999 (UTTCRs) require businesses not to use unfair terms in their standard contracts. A recommendation arising from the OFT's 2005 report on ticket agents, was that the Society of Ticket Agents and Retailers (STAR) should work with the OFT to establish model terms and conditions that could be applied fairly across its members. These terms and conditions are still being discussed between STAR and the OFT. The Government expects that once these model terms and conditions meet the OFT's concerns on fairness, then these should be standardised across the ticketing sectors as far as possible. Terms and conditions should be clearly displayed to consumers buying tickets, and those attempting to purchase tickets on the secondary market should also be made aware of terms and conditions before they buy.

52. Most tickets carry the event owners' or promoters' terms and conditions but consumers seem rarely to refer to them and regard tickets as their own property once paid for.

53. The OFT has said that it is possible to argue under the UTTCRs that it is unfair to restrict consumers from reselling tickets for profit unless fair mechanisms are provided where consumers can dispose of a ticket they can no longer use. However, the OFT advises that this is for a court to decide and ultimately determine what terms and conditions are fair or unfair. The Government is keen to see finalised terms and conditions to understand what is fair and how this will work in practice.

54. The Unfair Commercial Practices Directive (UCPD) is currently being transposed into UK law by the DTI. The UCPD will ban unfair trading practices and will cover traders selling tickets to consumers. It will require all traders selling tickets to provide consumers with all necessary information they need to make an informed choice. If a ticket is legally non-transferable and a consumer might not be able to use it, this is information traders would have give consumers under UCPD.

55. A recent case worth noting was reported by Live Performance Australia (LPA) at the end of 2006: "the Federal Court of Australia handed down its decision in the case between the promoter of the Big Day Out festival, Creative Festival Entertainment, and eBay International. eBay sued the Big Day Out for misleading and deceptive conduct, in contravention of the Trade Practices Act, pointing to a condition on the back of Big Day Out tickets which read: should this ticket be re-sold for profit it will be cancelled and the holder will be refused entry. This condition specifically prohibits ticket re-sale through online market or auction sites. The court held that this condition conveys a misleading message that the Big Day Out is legally entitled to and would detect and cancel any ticket which is resold for profit, and the holder of the ticket would be refused entry. The court found that as it was impossible for the Big Day Out to detect, cancel and refuse entry for every ticket resold for a profit, this made the condition misleading."

56. As a result of this, the LPA is now working with the industry to develop standard terms and conditions and ticketing distribution practices which reflect this case.

5 The merits of new approaches by ticket agents attempting to prevent transfer of tickets including wider use of personal ID

57. There have been recent examples of where the use of personal ID has been implemented. The Glastonbury Festival has for several years been trying to prevent tickets for its event being resold for profit. This year it appears to have managed to prevent this through the combination of photo ID requirements and strict security arrangements at the venue. However, this type of approach is not suitable for all events.

58. Recently, BBC Radio 1 held its annual Big Weekend road show in Preston. This event had well publicised terms and conditions, ID checks and barcode scanning. The event was free; artists performed for free; and it was funded by the BBC licence fee. The BBC and DCMS Ministers called on eBay as the principal online site facilitating consumer ticket resale for this event to prevent the listings on these grounds. eBay refused, saying that this was not an event that breached its policies for delisting items.

59. DCMS hoped that the marketplace could find solutions to these issues. Although the quantity of tickets being resold for the Radio 1 event was only around 1%, but as seen in this case, market-based solutions did not meet the event's objectives.

6 Whether or not the existing offences of sale by an unauthorised person in a public place of a ticket for a designated football match, or for events at the London 2012 games, should be extended to cover other sporting or cultural events

60. The Government has not accepted that the restrictions on sales of tickets for profit in respect of the 2012 Olympic Games and Paralympic Games represent either a justification or precedent for further regulatory intervention. It was a formal requirement for the Government to accept such a restriction when it elected to bid for the Games. Similarly, it does not regard the existing restrictions on sales of tickets for football matches to be a precedent. [59]These restrictions exist for public order reasons, which do not necessarily apply to other sports or other events. DCMS acknowledges that there are concerns about the existence of anomalies created by a two-tier approach to protecting events, but further intervention in this area must be justified in its own right which is why DCMS is considering further the case for "crown jewel events".

61. In terms of existing legislation, the Price Indications (Resale of Tickets) Regulations 1994 require that agents must provide buyers with all relevant information including face value of ticket, location of seat and any restrictions which may apply. New regulations will be implemented by April 2008 (under the Unfair Commercial Practices Directive) and will more generally prohibit unfair trading practices providing equivalent protection to that existing under the 1994 Regulations. Both the 1994 Regulations and the Directive apply to business and not to consumer-to-consumer transactions. OFT has also recommended that ASA guidance for non-broadcast advertising and which applies to the ticketing market should also require fuller disclosure of charges. Street trading without a licence is an offence and trading standards may take action against those who buy and sell tickets outside venues.

LEGISLATION ELSEWHERE

62. Legislation in Queensland, Australia brought into force under the Major Facilities Act 2001 was intended to allow genuine fans a fair and equitable opportunity to purchase tickets to events at state-owned venues. It makes it an offence to purchase a ticket for the sole purpose of profiteering (and above a 10% margin). The legislation is not aimed at restricting resale where there is genuine need and where this is allowed under the ticketing conditions. The legislation only applies to resale of tickets before an event (the purchase of used tickets for memorabilia is not illegal) and applies to any event held in the Major Sports Facility Authority (MSFA) venues, regardless of where or from whom the ticket is purchased. Sellers can face a maximum fine of 20 penalty units or A$1,500.

63. In the USA, the New York State, Arts and Cultural Affairs Law (ACAL)—Article 25 deals with the resale of tickets. It provides the statutory framework governing the resale of tickets and the resellers of tickets, as opposed to the original sale of tickets and original sellers of tickets. It requires: ticket resellers to be licensed with the Commissioner of Licenses of the political subdivision in which such business is conducted (eg the Department of Consumer Affairs in New York City); places of entertainment to print the established price on the face of each ticket; and to prohibit the resale of tickets for over the "maximum premium price," currently defined as five US dollars or 10% of the established price, whichever is greater; and licensees to keep records of the names and addresses of all persons from whom tickets were purchased and to whom they were sold, and the price at which such transactions occurred. These records must be made available to the Attorney General upon request.

64. A recent paper produced by Live Performance Australia (LPA) concluded that "scalping [touting] is clearly a problem affecting all aspects of the industry from organisers' revenue to customer satisfaction. [60]Solutions to this problem should therefore focus on consumer perception and satisfaction, as well as directing profits from ticket sales into the deserving hands of organisers and artists. A legislative approach that criminalises scalping, while providing strong disincentives, only adds to the administrative and compliance burdens of the industry. While it may be an appropriate step for some sporting events, the experiences of other countries suggest that criminalisation is largely ineffective in preventing scalping for live performance events. Legislation designed to enforce standardised conditions of sale, however, is more likely to be effective in managing the issue. A co-operative and creative approach by the industry to the problem of ticket scalping is more likely to achieve the desired solutions." Research suggests that anti-scalping legislation has since been relaxed and that mark ups of 45% above face value may now be allowed in the US, as it has been felt that the legislation has not been effective in controlling ticket scalping. [61]

June 2007