eBay Point-of-View:
- eBay strongly supports the elimination of restrictions capping the resale price of tickets to sporting and entertainment events.
- If done properly, the elimination of this barrier to e-commerce can result in increased competition, increased ticket availability, and better service to the event-going public.
Impact:
- Laws restricting the resale price of tickets negatively affect consumers in three major ways:
- Reduced availability - Since individuals from neighboring states are not subject to a particular state’s regulations, many of the best seats are obtained by out-of-state sellers to be sold to out-of-state buyers. This reduces the number of tickets available to hometown fans.
- Higher Prices - The reduced availability of tickets artificially drives up demand, resulting in high prices.
- Inferior service - Limiting the options of consumers to purchase tickets artificially restrains competition. This lack of competition means that major ticket suppliers feel little need to improve service, since customers have few other options.
- Laws restricting the resale price of tickets also have a negative impact on sellers. The fact that out-of-state sellers are not subject to the same price restrictions places in-state sellers at a competitive disadvantage in the ticket resale market.
Background:
- Many cities and states began enacting anti-scalping laws as much as 100 years ago to protect consumers from fraudulent and unscrupulous sellers. It was not uncommon for the more unscrupulous scalpers to sell forged tickets, demand exorbitant prices, misrepresent seat location or cooperate in pickpocket schemes.
- Early 20th century scalpers were successful because the ticket resale market was incredibly inefficient, making it nearly impossible to quickly compare prices and ascertain the best deal. There were no alternatives for the ticket buyer - an open, legitimate marketplace for tickets on the secondary market did not exist.
- Unlike years ago, today’s well-lit and online marketplaces have provided a forum to safely and effectively determine a ticket’s fair market value.
- Five states currently impose strict regulations on ticket resale prices. Thirty-nine states impose no restrictions, and six others are less restrictive.
Key Issues:
- The original justification for most scalping laws was based on consumer protection. However, the comprehensive consumer fraud protections and regulatory oversights in place today have removed many of the public policy reasons behind the original law. In fact, consumer protections offered by online marketplaces such as eBay go far beyond many of those required to become a licensed ticket broker.
- Today, there are serious issues in the ticket resale market relating to fair business practice. With primary market ticket suppliers facing no serious competition, ticket prices are artificially driven up. These virtual monopolies ensure that ticket prices will remain inflated and that consumers will be left footing the bill.
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