Ticket scalping refers to the reselling of event tickets, often at prices well above face value. While some see it as an example of free market economics, ticket scalping is strictly regulated or even illegal in many jurisdictions due to concerns about unfair pricing and consumer protection.
What is ticket scalping?
Ticket scalping is the practice of buying event tickets with the intent to resell them later at a higher price. Scalpers typically target high-demand events where tickets are likely to sell out quickly and carry high resale value. By buying up large quantities of tickets, scalpers are able to leverage supply and demand dynamics to turn a profit.
Some key characteristics of ticket scalping include:
- Buying tickets solely for the purpose of resale, not to attend the event
- Charging prices well above face value – sometimes exponentially higher for hot events
- Reselling tickets via secondary markets and platforms
- Focusing on reselling the most in-demand and scarce tickets
- Using sophisticated tools and bots to buy up tickets in bulk
Ticket scalping differs from individuals occasionally reselling extra tickets they cannot use. Professional scalpers buy large volumes of tickets as inventory to be resold commercially. The practice allows them to profit from fans’ desire to attend sold out events.
What types of tickets do scalpers target?
Scalpers tend to target high profile events where demand dramatically outstrips supply. Some of the most common targets include:
- Concerts – Particularly shows by major pop stars, rock bands, and oldies acts with broad appeal. Stadium and arena concerts by icons like Beyonce, Bruce Springsteen, and The Rolling Stones are prime targets.
- Sports – Big games like the Super Bowl, World Series, NBA Finals, Stanley Cup Finals, and major college sports events draw huge scalping interest. Marquee regular season matchups are also targeted.
- Theater – Hit Broadway musicals and plays often sell out quickly. Scalpers may buy up large blocs of seats to shows like Hamilton, Wicked, or The Lion King.
- Festivals – Major multi-day festivals like Coachella, Lollapalooza, and Austin City Limits are scalping hotspots.
- Comedy/Las Vegas – Headlining residencies and tours by major comedians like Kevin Hart or Jerry Seinfeld draw scalper demand. Big Las Vegas shows are also impacted.
Essentially, scalpers target any event where there is intense demand combined with limited ticket availability. The greater the mismatch, the more potential profit scalpers stand to make.
Is ticket scalping legal?
The legality of ticket scalping varies significantly by jurisdiction. Some key legal considerations include:
- Price caps – Many areas impose limits on how much sellers can mark up ticket prices. New York State, for example, caps markups at no more than 45% of face value.
- Location limits – Some places ban ticket resale within a certain distance of an event venue. This prevents scalpers from clustering near the entry points.
- Restricted inventory – Newer laws require resellers to disclose which tickets they actually possess to prevent speculative selling.
- Anti-bot laws – An increasing number of states are cracking down on bots used to unfairly sweep up ticket inventory.
- Outlet limits – Some states restrict reseller licenses to control the secondary ticket market.
- Total bans – A minority of jurisdictions like Massachusetts have banned ticket scalping completely as a consumer protection matter.
Many ticket marketplaces like StubHub provide legal secondary channels for ticket resale as well. However, large markups and speculative selling still run afoul of various scalping laws.
Why do people oppose ticket scalping?
Ticket scalping draws major criticism from many fans, consumer advocates, and policymakers on grounds like:
- Unfair pricing – Markups well beyond face value price regular fans out of the market for hot events.
- Predatory practices – Scalper bots can snatch up huge ticket volumes in seconds, leaving few for regular buyers.
- Speculative selling – Selling tickets not yet in possession misleads buyers about true inventory.
- Counterfeits – Some scalped tickets end up being fake, fraudulent, or duplicated.
- Consumer harm – High prices and shady practices aggrieve and rip off fans.
As a result, many contend scalping allows middlemen to unfairly profit off passionate fans. They argue tighter regulation or bans are needed to protect consumer interests.
What do defenders of ticket scalping argue?
Supporters of some degree of ticket scalping counter that:
- It allows price discovery – Secondary markets help find the true market clearing price for high-demand events.
- It reallocates tickets efficiently – Scalpers divert tickets from casual fans to diehard fans willing to pay more.
- Events still sell out – If scalped prices were truly unfair, events wouldn’t continue to sell out.
- It expands consumer choice – Scalpers provide an alternative channel for sold out events fans would otherwise miss.
- It reflects free market ideals – Trying to cap pricing interferes with free market supply and demand.
Defenders argue scalping simply represents market forces at work. They contend fans can choose whether to pay secondary prices or not.
What are the risks and downsides of scalping tickets?
While scalpers defend their role in price discovery and allocation, critics point to many risks and negatives including:
- Pricing regular fans out – Everyday fans often cannot afford exponentially marked up prices for their favorite events.
- Predatory bots – Scalper bots can vacuum up ticket inventory in seconds before real humans get a chance.
- Speculative selling – Many scalped tickets don’t actually exist yet, misleading buyers.
- Counterfeits – Fake or duplicated tickets leave buyers stranded at the gates.
- Added costs – Scalpers drive up costs across the board, including primary ticket prices.
- Consumer distrust – Shady practices undermine public trust and enjoyment.
- Inequitable access – Wealthy buyers have an advantage over regular fans in buying power.
These downsides fuel calls for regulation to create a more equitable, transparent, and ethical ticket marketplace.
What regulations apply to ticket scalping?
Common regulations aimed at ticket scalping include:
- Price caps – Limits on maximum resale markups to prevent extreme overpricing.
- Location bans – Prohibiting resale within a certain radius of venues.
- Inventory limits – Capping how many tickets a reseller can possess at once.
- Disclosures – Requiring disclosure of ticket locations to prevent speculative selling.
- Bot bans – Outlawing bots that unfairly sweep up ticket inventory.
- Licensing – Requiring resellers acquire a license or registration to monitor the market.
- ID checks – Mandating ID on pickup to match ticket purchasers and prevent duplication.
- All-out bans – Making ticket scalping fully illegal as an anti-consumer practice.
A patchwork of scalping laws exists nationwide, typically targeting the most abusive practices. Enforcement poses challenges, however.
How has technology impacted ticket scalping?
Technology has transformed ticket scalping in recent decades in both positive and negative ways:
- Online resale – The internet opened up vast new secondary resale markets for scalpers.
- Scalper bots – Automated bots can snatch up thousands of tickets in seconds.
- Mobile tech – Smartphones enable remote ticket purchases and transfers.
- QR codes – Digital ticketing via QR codes introduced more potential for abuse.
- Big data – Scalpers leverage analytics on buyer habits.
- Social media – Platforms like Twitter and Craigslist expanded scalper reach.
- Price transparency – Comparison sites like SeatGeek provide pricing insight.
New technologies provide scalpers unmatched abilities to sweep inventory, resell remotely, and leverage data. But they also fuel consumer empowerment through price transparency and convenience. Ongoing legislation aims to strike a balance.
What are examples of major recent ticket scalping controversies?
Some notable recent ticket scalping scandals and controversies include:
- Taylor Swift, 1989 tour – Up to 90% of tickets immediately appeared on resale sites, sparking outrage.
- Harry Potter and the Cursed Child – Broadway blockbuster play sees $1000+ resale prices.
- 2020 Tokyo Olympics – Estimated 70% of Japan residents failed to get tickets due to scalping.
- 2022 Super Bowl – Tickets with $5000 face value resold for as high as $70,000.
- Adele, Weekends with Adele – Angry fans reported paying $40,000+ for resale tickets to her Las Vegas residency.
- 2022 World Cup – FIFA cancels over 500,000 tickets to curb abusive online sales.
These incidents highlight the ability of scalpers to dominate supply and drive astronomical speculative prices using modern tools. The resale prices often greatly exceed what an average fan can reasonably afford.
How does ticket scalping impact artists and events?
Ticket scalping can impact artists, teams, theaters, and events in various ways including:
- Reputational damage – Stars like Adele incur fan wrath over perceptions they allowed scalping.
- Lost revenue – Scalpers divert profit from primary sales.
- Price pressure – Scalping may force primary ticket prices higher to recapture value.
- Weakened home advantage – Sports teams see more road fans buying scalped local tickets.
- Production uncertainty – Broadway shows budget and plan based on sales projections undermined by scalping.
- Quality concerns – Poor experiences with scalped tickets reflects badly on overall event productions.
The bottom line impact ranges from financial to reputational. But rampant scalping generally runs counter to events capturing full value from primary ticket sales.
What precautions can consumers take against ticket scalping risks?
Fans can take certain steps to protect themselves against scalping risks like fraud, counterfeits, and misleading inventory including:
- Buy only from trusted vendors like primary ticket outlets and well-known resellers.
- Research seller ratings and reviews before transacting.
- Avoid buying just based on online listings that may not reflect actual inventory.
- Be wary of prices that seem outrageously, even inexplicably, high.
- Compare prices across multiple exchanges to gauge fair market value.
- Learn the refund, transfer, cancellation policies before purchasing.
- Pay via credit card to dispute any fraudulent charges.
- Carefully review ticket details to screen for signs of counterfeiting.
- It often pays to be patient – prices can drop as event dates near.
While still a risk, smart shopping practices can help fans avoid the worst scalping scams and rip-offs.
How has COVID impacted ticket scalping?
The COVID-19 pandemic disrupted ticket scalping, like other industries, in major ways including:
- Event cancellations – Scalpers were stuck holding now worthless inventory as concerts, games, festivals, and more were postponed or canceled.
- Closed resale markets – With events halted, secondary exchanges like StubHub suspended operations for a period.
- Refunds – Ticket holders were repaid for called-off events, extracting scalpers’ profits.
- New health protocols – Distancing and other measures drastically cut venue capacity and tickets available to scalp.
- Hesitant buyers – Fans were reluctant to commit to future events until COVID clarity.
- Rushed digital shifts – Scalpers scrambled to adapt strategies to digital transfers and screening requirements.
Both scalpers and events faced massive disruption. Scalping is rebounding as live events resume but faces a changed landscape.
Conclusion
Ticket scalping reflects a complex debate between free market advocates and consumer protection voices. Technological change has intensified scalping abilities while also fueling demand to crack down on abuses. Scalping seems likely to remain a fixture around major events but faces growing public blowback and tougher laws limiting the most predatory practices. Still, for fans the rewards of seeing beloved artists or teams in person often outweigh the risks of buying resold tickets. Smart shopping habits are key to avoiding major scalping pitfalls and costs.