A federal bill targeting online scalpers may soon become law, as Congress members try to buckle down on exorbitant ticket prices.
The legislation, which was passed by Congress on Wednesday, is designed to crack down on software-based ticket scalping. If the bill is signed into law by President Obama, vendors who use “bots” to snatch up event tickets, only to later resell them at considerable markups, will be subject to prosecution under the Federal Trade Commission Act.
“The average fan vying to purchase a ticket to a popular concert has little hope of competing against brokers, many of whom use illegal and unfair means to purchase tickets,” said an earlier report, released in January by New York Attorney General Eric Schneiderman.
It’s simple economics: When the demand for seats exceeds supply, anyone fortunate enough to have bought their ticket in time can sell it above face value. But many of today’s scalpers aren’t waiting outside the venue entrance with extra seats, as was the case in previous decades.
The most egregious modern scalpers use bots – sometimes hundreds of them, each one purchasing the maximum number of tickets for several events at a time. It’s increasingly difficult to detect these bots, because many of them are adept at imitating human behavior. Some even misclick or use the delete key, just to trick ticketing websites into thinking they’re real people, according to a New York Times investigation.
"With the speed of the internet, scalpers have greater reach into ticket purchasing than ever before," Tiff Fehr reported for the Times:
The professional tier of scalpers buys and sell thousands of tickets a year, and leverages millions of dollars of inventory. Some scalpers use custom-written software to manage their inventories and adjust their prices based on real-time market analysis, much like traders on Wall Street. (It should come as no surprise they prefer to be called brokers.)
Attorney General Schneiderman’s report identified a single broker who was able to purchase 1,012 tickets to a U2 concert in 2014, just one minute after they went on sale. By the end of the day, two vendors had bought up 15,000 tickets from that tour.
Performances in just one month, the Times reported, may have earned scalpers more than $10 million by reselling “Hamilton” tickets. The show’s producers, by comparison, earned around $3 million from the same performances. “Hamilton” producer Jeffrey Seller testified at a Senate hearing in September.
Ticketing and resale sites, such as Ticketmaster and StubHub, promised in January to cooperate with investigations surrounding illegal scalping.
This report contains material from the Associated Press.