Scalping, also known as ticket brokering, is the practice of buying event tickets and then reselling them at a higher price for a profit. While some view it as an unethical practice that takes advantage of consumers, scalping is actually not illegal in most places.
Why do people scalp tickets?
There are a few key reasons why scalpers buy and resell tickets:
- To make a profit – Scalpers can often purchase tickets for popular events at face value early on and then resell them at a markup once tickets sell out or get close to the event date.
- As a business – For some scalpers, reselling tickets is an entire business model and income source.
- To gain access – Some use scalping as a way to buy tickets and gain access to sold out events that they actually want to attend.
By buying up available tickets and controlling supply, scalpers are able to drive up demand and charge much higher prices.
Is scalping tickets legal?
In the United States, scalping event tickets is generally legal due to the First Amendment right to free trade. There are some exceptions though:
- Some states have laws restricting or regulating scalping – These include limits on markups over face value and requirements to be licensed.
- Scalping may be prohibited on private property – Venues can bar scalpers from reselling on their premises.
- Scalping of some event may be prohibited – There are laws against scalping tickets to some specific events.
However, broadly speaking, scalping tickets is legal as it is considered a protected form of free enterprise.
Why isn’t ticket scalping illegal everywhere?
There are a few key reasons why most places allow the practice of ticket scalping:
- Free market economics – Scalping is seen as a form of supply and demand economics and free enterprise.
- Limited government intervention – There is resistance towards enacting laws that overly regulate or restrict such market activities.
- Difficulty enforcing bans – Laws banning scalping can be challenging to enforce and prosecute.
- Tax revenue – Scalping generates tax income that governments have an incentive to keep.
Essentially, ticket scalping falls into a gray area where there are few compelling reasons for governments to make it illegal across the board.
What are some key arguments around scalping laws?
There are good-faith arguments on both sides of whether ticket scalping should be illegal:
Arguments for making scalping illegal
- It takes advantage of fans and drives up prices.
- It often circumvents ticket purchasing limits.
- It costs the performers and venues money.
- It favors resellers over average consumers.
Arguments for keeping scalping legal
- If provides an economic service matching supply and demand.
- Banning it limits free enterprise and trade.
- It helps provide access to high-demand events.
- Buyers freely choose to pay marked up prices.
There are merits to both perspectives on the issue. Overall though, the view of scalping as an exercise of free trade has prevailed in most jurisdictions.
What are some key scalping regulations?
While outright bans are uncommon, there are some regulations that limit aspects of ticket scalping:
- Price caps – Limits on maximum resale prices.
- Zone restrictions – No scalping allowed near venues.
- Licensing – Requiring resellers to register as ticket brokers.
- Disclosure – Requiring disclosure of ticket face values.
- Event bans – No scalping allowed for certain events.
Regulations try to balance consumer protection with allowing the practice overall. But full bans are viewed as excessively interfering in market exchanges.
Are there any recent changes or trends?
Some recent developments related to ticket scalping include:
- More states exploring scalping laws – Maine, Minnesota, and others have considered new regulations.
- Growth of online resale platforms – Sites like StubHub provide new scalping venues.
- Increased use of verification – Barcodes and IDs make invalid scalped tickets harder to sell.
- Higher resale prices – Scalpers leverage more data to optimize pricing models.
In general, scalping seems likely to persist but with added restrictions. New technologies and data science are making it both easier and more lucrative.
Conclusion
Ticket scalping occupies a controversial space but remains legal nearly everywhere. Arguments around unfair pricing and restricting supply are commonly used to criticize the practice. However, there are also arguments that it allows free markets to work and provides access. As a result, complete bans are viewed as overreach. Instead, expect to see more targeted restrictions that still allow scalping overall as a protected form of commerce.