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What Is Legal Scalping?

Essay by review  •  December 10, 2010  •  Essay  •  2,514 Words (11 Pages)  •  579 Views

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What is Legal Scalping?

A true fan, be it of a particular musician, sports team, or theater performance, will wait endless hours in a box office line, on the Internet, or by their phone anticipating incredible seats to an event. However, when it's their time to purchase tickets, the only available seats left are obstructed view or the "nosebleed" section. That seems impossible because the purchase maximum is six tickets at a forty thousand-seat venue. Yet, strangely enough, online and in the newspaper there is a ticket company that has six amazing seats in the first five rows. Besides being lucky enough to have all those great tickets, ticket brokers also have the capability to sell the thirty-five dollar ticket for three hundred and twenty dollars. It has been revealed that ticket brokers take place in illegal activities to obtain and sell their tickets; because of this they take the performance experience away from the general public and fans. If a young man is trying to sell a ticket for more money he is fined and charged with scalping. It is contradictory for a ticket broker to be legally charging outrageous amounts of money for the same ticket.

Scalping tickets has been around since the 1880's and has been a constant battle of the free market verse protecting public interest, the argument that the brokers make is they work in the free market (FAQTIX). The word "scalping" is a term that was originally used to refer to a killing, political or economic. Now scalping is commonly defined as buying tickets for later sale at higher than normal prices (Happel 1995).

In 1960 the Federal courts agree that an anti-ticket scalping legislation was needed, and later, designed to protect the public interest (Schacher 2001). From the 1960's through the 1970's the first generation of anti-scalping regulations in the, state and municipal levels was developed. This included eleven states adopting limits such as one dollar above printed face value, six states allowing resale above face value if authorized by the owner or promoter, two states adopted the policy of no sales at the event site, or on state property, three states prohibited scalping only at certain events, four states, including Illinois, establishing broker licensing, and allowing those licensed brokers to resell, and two states allowed resale for charity or nonprofit (Happel 1995). During this time these rules were strictly enforced by increasing fines and jail time. Within the past decade a second generation of regulations were passed. Nine states have permitted resale with owner permission, and now four states, once again including Illinois, allow licensed ticket brokers to resell for a higher price (Happel 1995).

A ticket broker is a person that obtains tickets to an event, and then resells them for a higher price to the consumer. The National Association of Ticket Brokers, which was established in 1994, believes they serve the public in three ways: 1) they provide tickets to events that are sold out, 2) they provide premium upfront and desirable tickets, and 3) they provide ticket holders a place to sell their unwanted, or extra tickets (NATB). They consider themselves business people who invest in a commodity which does not harm individuals, but provide an orderly market for their commodity (FAQTIX 1). Others find ticket brokers strive to monopolize the supply of tickets by paying illegal and substantial bribes to various people who have control of the ticket distribution (Spitzer 1999).

Ticket brokers are classified into two types. A brokers that does not obtain the most desirable seats are called "non-premium brokers." This also means they will typically charge ten to sixty percent over face value. "Premium brokers," on the other hand, obtain the most desirable seats, and in the shortest time. Their prime clients are big city businesses such as stock brokerages, fashion and publishing companies, and adversity law and accounting firms. Also they tend to charge 130- 450 percent over the face value of the ticket. "Premium brokers" tend to work nationwide, buying tickets to events across the country (Spitzer 1999).

In the early 1900's ticket brokers established themselves as business men, who even back then they would charge a small service fee (NATB). But now that fee has grown into a ridiculous price. This is because live performances are a continuously growing investment, and billions of dollars are put into these events. Since these are events that require someone to acquire a ticket to enter, this is an excellent opportunity for ticket agents to invest in tickets, knowing that they will gain profit by selling one ticket for much more money than face value. Ticket broker groups mainly have their home offices in larger cities. Because of this they have more connections and are able to receive tickets to high demand events all over the country. There are currently numerous organizations of ticket brokers, for example the National Association of Ticket Brokers (NATB). Such groups advertise themselves as being the legit ticket brokers who create additional codes and rules for their members to show their high standards. If someone was to choose to buy through a ticket broker, it is better to deal with one that is a member of such organizations because if anything was to go wrong, they can be tracked and prosecuted (FAQTIX).

To begin their business, a ticket broker first has to establish his or her way of obtaining the desired tickets (NATB). There are various actions that ticket brokers take; many of which are illegal. One way is to hire a "digger." "Diggers" are people who wait in the lines at the box office or at a Ticketmaster outlet, and purchase as many tickets as possible. Through "diggers" brokers have the ability to beat true fans out of good seats, and they then resell the tickets for high prices. If there are "diggers" present in the line, certain fans will not get good, if any, seats (Goodman 1991). They usually work in crews that range from 100-200 people. These crews also are the people that attempt to sell tickets on the street outside the venue before the event. While doing this they, have a "crew boss," who is usually monitors the "digger's" sales and is not involved with the direct sale, but holds the money and approves or not of the deal (Spitzer 1999).

A Radiohead fan wrote a letter to the Attorney General of New York explaining his observations and experience while waiting in line to buy tickets to the concert. He began by explaining that the fans in line were told the tickets would be distributed between 5:00-9:00pm. Around 8:00pm the line had grown to around three hundred people, he recognized that most did not look or speak like

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