Ticket reselling ban is good news but will it stamp out touts?

New legislation to tackle ticket touting at large concerts and sporting events has been agreed by the Government. That’s good news: ticket reselling – the polite term for ticket touting – has long been a hot button issue for music fans and consumers. Little angers people more than the appearance of tickets on so-called secondary sellers’ websites moments after a concert is “sold out”, usually at many multiples of the face value.

The proposals aim to ban tickets sold at more than face value will apply to "designated venues" which hold 1,000 or more people and will ban the use of "bots" by resellers to purchase tickets on primary ticketing websites such as Ticketmaster.

While there have always been touts standing outside venues selling last-minute tickets to gigs, the internet has allowed savvy touts to buy tickets en masse using “bots” to game the system and to resell them in bulk on secondary ticketing websites.

Secondary ticketing companies have a chequered history, with the main players accused of allowing resellers who acquired tickets by dubious means to use their platforms without restriction. Viagogo was the subject of a Channel 4 documentary sting operation in 2012 which found that promoters were giving tickets to the company direct to resell at exorbitant prices while tickets for high-demand gigs from Stormzy, Ed Sheeran and U2 have appeared on Seatwave within minutes of going on sale, prompting fans to question the true nature of the secondary ticketing marketplace.

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What is needed is legitimate secondary marketplaces operated by the primary ticket resellers

Meanwhile, Stubhub, which launched in Ireland last year, didn't help the case when its offices were raided in the UK after refusing to hand over information as part of a government inquiry. The raid was prompted following revelations in the "Paradise Papers" last year that the Canadian multimillionaire ticket broker Julien Lavallee claimed to have direct deals in place with promoters and venues to get tickets in exchange for a yearly fee. Stubhub was reluctant to address the charges against Lavallee, who they have admitted was part of their "top seller" programme.

The proposed legislation by the Government was called "a game-changer" by Minister for Business Heather Humphreys but beyond the feel-good consumer spin, is it going to work?

Good start

It’s certainly a good start and a potentially a big blow for the likes of Stubhub and Seatwave’s operations in Ireland. It comes in the wake of Google’s stipulation that secondary ticket companies provide greater transparency in the language that they use on paid search results and their checkout process, meaning they can no longer claim to be “official sellers” of big events.

Banning bot use is a no-brainer but how will that practically be put in place? Will companies such as Ticketmaster be obliged to monitor and report any attempts to buy tickets in such a way? Will they be willing to invest in the security and personnel required to catch such nefarious activity? Let us not forget Seatwave is also owned by Ticketmaster so there’s a potential conflict there.

What is needed is legitimate secondary marketplaces operated by the primary ticket resellers. In Spain, Redtkts allows ticket buyers to resell tickets bought from them directly in an anonymous and safe marketplace with a cap of 15 per cent on the original price.

It’s not entirely clear at this point what “designated venues” means as per the proposal. Does that mean any venue not signed up to the legislation or with a capacity of fewer than 1,000 people will remain unaffected, enabling high-price reselling on a smaller scale? The 450-capacity Dublin venue Whelan’s isn’t covered by the proposal for example. Why the delineation to larger venues as opposed to a blanket ban?

Ticket reselling is legal in the UK and the US though the calls to address it are growing. The London venues The O2 and Wembley Arena have taken matters into their own hands and ended a partnership with Stubhub in favour of a marketplace that caps reselling at 10 per cent of face value.

Spain, Israel and France have banned ticket reselling outright while Norway has banned reselling of tickets for more than face value. Tickets for events in Australia can be voided if they are determined to have been resold for a profit. In Canada, tickets can only be resold if the secondary seller has permission from the original seller and must show the purchaser its origins and face value price.

Those conditions open up loopholes. In Poland, while reselling is illegal, a seller may ask the buyer to gift something for the same value as the ticket to avoid the problem or the parties could connect on an online forum and use Paypal or similar to avoid detection.

The secondary ticket companies say they offer a safe environment for genuine transactions and suggest that banning reselling would only drive the practice to less visible sites where there is no consumer protection.

While there may be some truth in that, the Irish legislation is attempting to tackle the bulk buying and reselling of tickets, which is a good place to start and hits the secondary ticket sites where it hurts – their bottom line.

These companies say the higher prices of resold tickets reflect supply and demand in the marketplace but if their ability to make a big profit on resold tickets is removed by this legislation, then they may leave the Irish market. The worst-case scenario is that primary ticket-sellers factor the demand for tickets into the original price and that could hurt consumers more, driving up the cost of tickets in general.

By removing the mechanism that allows inflated-priced tickets to appear on another website within minutes of going on sale, consumers will feel less swindled. If a consumer still wants a ticket for that sold-out event, they will find a way, legal or not. In the short-term, the touts outside the venue may have a new-found relevance.