How to beat New York’s robo-scalpers, By Eric Schneiderman
June 8, 2016
As published in the New York Post on June 2, 2016.
We’ve all had the experience of logging online to buy tickets for our favorite band or show only to find out the tickets are already gone — sold out within seconds. And, in an instant, those same tickets are posted on resale sites like StubHub or TicketsNow with an exorbitant markup.
New Yorkers have been complaining to my office for years about this seemingly rigged game. Why, they asked, can they not find affordable tickets anywhere?
A detailed report issued by my office in January finally pulled back the curtain on the ticketing industry, exposing a troubling network of middlemen — brokers, ticket vendors and more — who use any means they can, both legal and illegal, to jack up the price of tickets and squeeze money out of fans.
Here’s how it works: Within seconds of tickets getting released online, brokers swoop in, many relying on sophisticated, illegal software — known as “ticket bots” — to purchase large numbers of tickets as soon as they go on sale.
These bots move far faster than even the most dedicated fan. It took a single bot just one minute to buy more than 1,000 tickets to a U2 show last summer at Madison Square Garden. There’s no way a human can compete with that.
Brokers then take these tickets to resale sites like StubHub or TicketsNow to sell at significantly higher prices — the brokers we looked at increased the price 49 percent on average. We found evidence that a broker using a ticket bot once purchased a ticket to a One Direction show for $101 — and resold it at 70 times that price.
Brokers even thwart the efforts of goodhearted artists like Pearl Jam, who have tried to keep their ticket prices low. We discovered that a bot purchased a ticket for a Pearl Jam show in Brooklyn and resold it for 13 times face value. Even Pope Francis — who wanted his events in the US to be free — couldn’t escape seeing tickets to his events selling on resale sites.
To be clear, ticket bots are just one part of the rigged system. In fact, our investigation found that more than half of all tickets for popular concerts don’t initially go on sale to the general public. Instead, they’re reserved for industry insiders (agents, promoters, marketing departments, record labels and sponsors) or special insider groups (like premium credit card pre-sales).
We also found that ticket vendors and venues are charging high fees that add an average of 21 percent to the cost of a ticket.
The problem of unscrupulous ticket resellers isn’t new — in 1901, a New York magistrate wrote that scalpers are “practically highwaymen and hold up everybody that goes to a place of amusement.”
But in recent years, bots that exploit online sales have added a new and troubling dimension to the problem.
My office has begun to crack down on bot-using brokers. In April, we announced $2.7 million in settlements with six ticket brokers for using bots — and more investigations are ongoing.
But more must be done.
Though bot use is already prohibited and subject to civil penalties, it’s such a lucrative practice — earning brokers millions of dollars a year — that many brokers have been willing to risk breaking these relatively weak laws knowing they can afford to pay the fines and then return to business as usual. The problem will persist and grow unless the law is strengthened to punish and better deter illegal bot use.
A bill in the state Legislature, similar to one I proposed in April, has the chance to finally level the playing field. It would make it unlawful for ticket brokers to knowingly resell tickets that were purchased using bots, and make using a bot to buy tickets a misdemeanor for the first offense and a felony for additional offenses.
The state Senate has already passed the bill. The Assembly should follow suit.
New York is a global hub of music and culture — and New Yorkers deserve to be able to experience all the culture this great state has to offer at a reasonable price. The Legislature must act now to fix this rigged system.