Scalping and reselling tickets through sites like StubHub are often seen as similar practices, but there are some key differences that make one illegal and the other legal in most states. This article will explore the nuances between scalping and StubHub to explain the reasoning behind their differing legal status.
What is Scalping?
Scalping refers to the unauthorized and illegal resale of event tickets, often at prices well above face value. Scalpers typically purchase large quantities of tickets with the sole intention of reselling them at a profit. This is done without permission from event organizers or access to official ticket allotments.
Some key characteristics of scalping:
- Done without authorization from event organizers
- Large bulk purchases with intent to resell at higher prices
- No revenue sharing with event hosts or performers
- Prices set arbitrarily by scalpers, often excessively high
- An unofficial transaction outside of approved ticketing channels
Scalping often relies on circumventing ticket purchase limits imposed by venues and ticketing agents. Scalpers may use bots or hired personnel to quickly gobble up tickets the moment they go on sale. This leaves fewer tickets available through official channels, forcing consumers to pay inflated prices if they want to attend an event.
Why is Scalping Illegal?
Most states have laws prohibiting unauthorized ticket resale and scalping. There are a few key reasons why scalping is generally illegal:
- Circumvents ticket limits: Venues and ticket sellers often impose per-person ticket purchase limits to give everyone a fair shot at buying tickets. Scalpers use bots and hired buyer groups to circumvent these limits and buy up large swaths of tickets.
- No revenue sharing: The inflated ticket prices don’t benefit the event organizers, performers, or original ticket sellers. The scalper receives all the profit.
- Consumer protection: Laws aim to protect consumers from predatory pricing and deceptive sales tactics sometimes associated with scalping.
- Public nuisance: Aggressive scalpers often loiter near venues to make in-person sales, creating a public nuisance.
- Price gouging: Arbitrarily inflating prices is often viewed as unethical price gouging.
Essentially, anti-scalping laws are consumer protection measures intended to keep ticket prices reasonable and ensure fair access to high-demand events. Scalpers undermine these goals for personal profit.
What is StubHub?
StubHub is an online ticket marketplace owned by eBay where users can resell event tickets to other users. Sellers set the ticket prices, and StubHub takes a commission on each sale.
Some key attributes of StubHub:
- An authorized ticket resale marketplace
- Tickets sourced from ordinary individuals reselling their own tickets
- Prices set by individual sellers
- StubHub receives commission on sales
- Transactions handled through official site and app
StubHub provides a convenient, regulated platform for individual ticket holders to resell extra tickets if they can no longer attend an event. It gives buyers access to secondhand tickets through reliable channels.
How is StubHub Different From Scalping?
While both involve reselling tickets, there are some significant differences that set StubHub apart from illegal scalping activity:
StubHub | Scalping |
---|---|
Authorized by event hosts | Unauthorized by event hosts |
Tickets owned and resold by individuals | Tickets specifically purchased for resale |
Prices set by individual sellers | Prices arbitrarily inflated by scalper |
Revenue shared with event organizers | No revenue for event organizers |
Regulated, transparent transactions | Black market, opaque transactions |
The key differences come down to authorization, regulation, and ethics. StubHub operates with permission from event hosts, provides consumer protections, and shares revenue back to organizers. Scalping involves unauthorized sales with little oversight, transparency, or benefits to anyone besides the scalper.
Is Reselling Tickets on StubHub Legal?
In most states, reselling event tickets through authorized marketplaces like StubHub is legal and does not constitute illegal scalping. There are a few reasons StubHub ticket resales remain legal:
- Approved by venues/artists: StubHub has contracts with many event hosts allowing them to facilitate legal ticket resales and handle associated regulations.
- Regulated transactions: StubHub’s sales go through official channels and are not black market dealings.
- Shared revenue: StubHub shares revenue back to event organizers and original ticket sellers through fees and commissions.
- Consumer protections: StubHub offers guarantees, fraud prevention, and other buyer/seller protections.
- Market-based pricing: Sellers independently set prices based on supply and demand rather than arbitrarily inflating prices.
However, a minority of states prohibit all ticket resales above face value. In those states, reselling on StubHub may still be considered illegal scalping even with venue approval.
Is StubHub Ticket Reselling Ethical?
While StubHub’s practices are generally legal, there is still some debate over the ethics of reselling tickets for profit on such platforms. Some common concerns over ethics include:
- Buyers pay inflated prices: Tickets can become very expensive due to demand.
- Resellers profit off scarcity: Resellers benefit from supply/demand imbalances.
- Reselling could displace real fans: Resellers take tickets only to profit from them.
- Double dipping on fees: Buyers pay platform fees on ticket markup value.
However, others argue StubHub is more ethical than scalping as it:
- Channels the market determining prices rather than scalper price gouging.
- Creates a regulated secondary market allowing transfer of unwanted tickets.
- Can increase initial ticket sales as resale option gives buyers confidence.
- Offers hassle-free exchanges benefiting organizers, sellers, and buyers.
Ultimately there are reasonable arguments on both sides of the ethics debate. But the key difference remains that StubHub operates legally with organizer consent while scalping constitutes unauthorized and illegal activity in most states.
Conclusion
Scalping is widely banned because it harms stakeholders and constitutes unfair and deceptive business practices. In contrast, StubHub offers a regulated platform for ticket resales approved by event organizers. While critics may question the ethics of third-party ticket reselling, StubHub resales are generally legal and offer consumer protections that illegal scalping lacks. The company’s sanctioned role and revenue sharing help differentiate it from illegal scalping, even if both practices aim to profit from ticket resales in popular events.