Scalping is the practice of buying products, often limited release or high demand items like concert tickets or video game consoles, and reselling them for a profit. While some see it as a savvy business practice, others view it as an unethical means of artificially inflating prices and making items unaffordable for average consumers. This raises the question – can you actually go to jail for buying and reselling products at higher than retail prices?
The short answer is maybe, but it’s unlikely. Simply reselling an item for more than you paid for it is not illegal in most states. However, there are some caveats depending on the circumstances and jurisdictions involved. Strict anti-scalping laws are mostly directed at event tickets, and violation can potentially lead to fines or even jail time in some cases. But prosecution tends to be rare, and penalties on the milder side when pursued.
Scalping Laws by State
Scalping laws, when they exist, are enacted at the state level. Only around a dozen states have statutes that directly prohibit or restrict the resale of tickets or other goods above face value. These include:
- Arkansas
- Connecticut
- Georgia
- Indiana
- Kentucky
- Louisiana
- Michigan
- Minnesota
- New York
- North Carolina
- Ohio
- Rhode Island
Some other states have laws against “ticket scalping” specifically, without restricting general goods. Many states have no scalping laws at all. So legality depends heavily on location.
New York
New York has some of the harshest anti-scalping laws in the country. Reselling tickets for entertainment events, concerts, theaters, and other venues is a class A misdemeanor. Violators can face up to a $1,000 fine and 1 year in jail.
California
California prohibits scalping of tickets to sporting events, concerts, theaters, amusement parks. But the penalties are relatively light – an infraction punishable by a maximum $250 fine, no jail time.
Florida
Florida actually repealed its anti-scalping laws in 2013. Now resellers have free rein.
Texas
Texas has no laws restricting ticket resale above face value. Scalping goods or tickets is broadly legal.
Scalping Event Tickets vs Goods
Anti-scalping laws, in the states that have them, tend to focus on event tickets – for concerts, sports games, conventions, etc. There are a few reasons for this:
- Tickets are limited in supply – venues only have so many seats. Scalped tickets drive up costs for average consumers.
- Tickets are often unique experiences that can’t be substituted – like a playoff game or exclusive show.
- There are concerns about counterfeit tickets being sold by unregulated scalpers.
On the other hand, laws restricting scalping of physical goods are far less common. Some reasons why:
- Goods are not always limited – more units can be manufactured to meet demand.
- Goods like clothing, electronics, toys, etc. are considered commodities that can be freely traded.
- There are less risks associated with counterfeits or fraud.
There are exceptions. Some states prohibit scalping of milk, medications, or other essential household goods during shortages or states of emergency. New York restricts scalping of tickets and event credentials as well as “essential consumer goods” like gas. But in general, scalping non-ticket items is less regulated.
Can You Go to Jail? Scalping Penalties
The likelihood of actually being prosecuted and jailed solely for reselling goods or tickets above market value is very low. Anti-scalping laws are rarely enforced through criminal penalties. At most, violators typically receive a fine.
However, there are scenarios where scalpers potentially face steeper punishment:
- Repeat offenders who continue to violate scalping bans even after being fined.
- Large-scale operations involving hundreds or thousands of tickets.
- Use of stolen credit cards or other fraud to acquire tickets.
- Forging fake credentials, such as press passes.
These activities could rise to the level of criminal charges. The state of New York technically allows up to 1 year of jail time for illegal ticket resale. But in practice, it seems rare for anyone to receive more than a modest fine, if pursued at all. Searching court records produces little evidence of scalpers actually being sentenced to jail.
Notable Examples
Here are a few illustrative examples of anti-scalping laws being enforced:
- In 2016, the NY Attorney General announced charges against six ticket brokers accused of using bots to illegally purchase large quantities of tickets. But they received no jail, only $4 million in penalties.
- A business owner in Louisiana faced up to 5 years in prison for selling $20,000 of tickets above face value in 2015. He got 1 year probation and $2,500 fine.
- In 2013, an Ohio man was indicted on scalping charges for selling over $29,000 in tickets. He was spared jail and received probation plus restitution.
So even in states with harsh anti-scalping laws, jail time seems rare and limited to extreme cases. Fines and other civil penalties are much more common.
Other Legal Risks
There are some other laws that aggressive ticket scalpers could arguably run afoul of as well:
- Fraud – Lying about circumstances to unlawfully purchase tickets, such as using bots, could qualify as fraud.
- Tax evasion – Not properly reporting scalping income and paying owed taxes.
- Trespassing – Scalpers sometimes need to be physically removed from venues if caught plying their trade on restricted property.
These issues are also relatively unlikely to lead to criminal prosecution on their own. But they could potentially stack on top of scalping violations in extreme cases.
Ethical vs Legal Arguments
Some common arguments around the ethics and legality of scalping:
For:
- Scalping is just an entrepreneurial way of making profit by filling market demand.
- Anti-scalping laws are paternalistic government overreach that restricts free trade.
- More regulation often pushes scalpers underground and increases risks like fraud.
Against:
- Scalpers artificially restrict supply by buying up limited tickets using bots and other unfair means.
- It exploits fans and makes events unaffordable to average people.
- Scalpers provide no added value beyond driving up prices.
There are good-faith arguments on both sides. But in most places, outright bans on reselling items for profit remains legally dubious. Forms of scalping will likely persist regardless of ethical objections or industry crackdowns.
Practical Considerations
For individuals, some practical realities around scalping:
- Outright bans are geographically limited, follow local laws.
- Penalties tend to be civil fines, if anything.
- Focus on compliance and transparency if scalping in a regulated market.
- Avoid fraud or misrepresentation when acquiring tickets.
- Pay owed taxes to avoid trouble with the IRS.
For policymakers and venues, options include:
- Increasing supply and releasing more tickets to the general public.
- Auction-style sales that let the market set prices.
- Strict purchase limits to curb bulk scalping.
- Require tickets be non-transferrable or tied to IDs.
- Have venues void and reclaim scalped tickets.
Conclusion
Scalping remains in a legal gray area. But outright prohibitions are limited, and jail time is exceedingly rare even in states with laws restricting ticket resale. Policymakers continue to debate the ethics and impacts of scalping. However, the practice persists in various forms despite industry crackdowns. For individuals, just be aware of any local anti-scalping laws and avoid shady practices when reselling tickets or goods at a premium.