Shadowplay: The Case For Regulating Online Ticket Touting

The online ticket resale industry is still exploitative and worryingly unregulated. Professor Guy Osborn of Westminster Law School and Professor Mark James of Manchester Law School present their latest research on this controversial practice and make a case for a new Labour government bringing in legislation to deal with it

When a ticket tout complained to the Daily Record newspaper that the vast profit he was making on the secondary ticket market was merely fulfilling customer demand, he compared his work to that of a greengrocer. If nobody complained about the markup on a bunch of bananas, he whined, why such an issue with using the internet to sell in-demand tickets – ‘what’s the difference between a banana and a ticket? Thus far, unfortunately, it seems as if the sympathy of the authorities lies with the tout, rather than the consumer.

This line of reasoning riffs on a statement made in the House of Commons in 2011 by Sajid Javid, later to become Secretary of State for Culture, Media and Sport, that “Ticket resellers act like classic entrepreneurs, because they fill a gap in the market that they have identified.” Support for Javid’s claim can be found in a report for the right wing think tank the Institute of Economic Affairs, which argued that the secondary market corrects the defects of the primary market. This group sees tickets as a tradable commodity from which they are entitled to profit from its resale. Others have been less sanguine, classing them as profiteers, deviants or, as Stewart Lee succinctly put it, “utter bastards”. This group sees event tickets as something different than a ‘thing’ to be resold. As part of our ongoing research, Profs Guy Osborn of Westminster Law School and Mark James of Manchester Law School, have argued for some time that there is in fact a spectrum of behaviour that encompasses passing on tickets from one fan to another fan, all the way to industrial level ticket touting, or scalping as the North Americans call it. What is clear is that ticket touting is not going away.

On 11 September, the All Party Parliamentary Group on Ticket Abuse met to discuss the impact of ticket touting on the creative and sporting industries and the ways that this could be addressed. This event also saw the launch of the FanFair Alliance’s three-point plan to combat ticket touting: legislative action providing new laws to make it illegal to resell a ticket for profit; tech action requiring platforms like Google and YouTube to stop promoting touts, and to help direct consumers towards legitimate sources of tickets; and industry action, to make capped, consumer-friendly ticket resale visible and viable.

The number of touts operating continues to be significant. Reg Walker of the Iridium consultancy, and an acknowledged expert on the ticket market, noted at the APPG that that in 2007 there were around 120 touts operating in the UK, but by 2017 this had risen to around 400 on the back of an influx of overseas operators entering the market. This was the start of industrial levels of activity. Today there are an estimated 2500 to 3500 touts, utilising Bots, proxy-IP email generators, queue jumping software, and bulk ticket listing software to boost their penetration into the market. Many of these start-ups will have received expert tips on which events to target and what prices to sell at, via subscription groups that charge between £39 and £300 per month for their ‘how to tout’ advice. So, whilst when we think of touts we perhaps think of Viagogo or Stubhub there are plenty of new players trying to take a slice of the action such as Gigsberg and seatsnet.

There are still huge amounts of money to be made from live music, at least at the more mainstream end of the business. While the secondary market is the focus of public ire, promoters and venues have taken flak for high prices for events, including the use of dynamic pricing, and the mechanisms and structures they put in place to source these tickets. The Taylor Swift Eras tour was a high-profile example of the use of a number of techniques (not including dynamic pricing): first, fans had to register for a pre-sale code; a small proportion were issued with the code, whilst the rest were waitlisted (this latter group were provided with a code if there were any tickets left after the initial round of sales); those with a code joined the queue to buy tickets, with the option to buy various add-ons. This way of creating a buzz and fear of missing out arguably shows how the primary market uses the revenue-boosting techniques of its shadow to exploit demand. This demand is then repeated in the secondary markets. Though It is hard to ascertain a precise figure of the UK secondary market’s worth, in 2021 viagogo cited a figure of £2.5bn while the Competition and Markets Authority valued it at a more conservative £350 million in 2019. Suffice to say, this is a multi-million pound industry where third parties are able to generate huge profits in ways that limit fans’ access to tickets, increase the costs of attending events to fans, and take money away from artists and venues.

So, what has been the regulatory response to this issue? Historically, the UK has taken a relatively non-interventionist approach to the regulation of ticket touting, targeting legislation at specific events and issues rather than the secondary market as a whole. It has been a criminal offence to resell tickets to most professional football matches since 1994, with this offence being used as a template for similar legislation that criminalised unauthorised resales at the London 2012 Olympics and the 2014 and 2022 Commonwealth Games in Glasgow and Birmingham. Specific offences have also been introduced to restrict the use of bots and to require certain information to be included when advertising a ticket for resale. Regulation has been driven more by the development of tickets’ increasingly restrictive terms and conditions – a great example of this being the stringent anti-touting conditions in place for PJ Harvey’s recent brace of shows at the Roundhouse – or the occasional prosecution for general criminal and corporate offences, than by a desire to intervene by the state. The success of this approach is debatable, as the secondary market continues to grow, though there may be a more subtle impact through the law’s symbolic ability to change people’s behaviour.

Interventionist alternatives to this piecemeal approach that ignores a focus on tickets’ terms and conditions do exist. In 2011, Sharon Hodgson MP introduced the Sale of Tickets (Sporting and Cultural Events) Bill before the House of Commons. The Bill proposed that anyone advertising to sell, offering to sell, or selling a ticket to a designated event at a price greater than 10% above its original face value and without the written permission of the event organiser or venue operator, was guilty of a criminal offence. A venue or event organiser could apply to the Secretary of State to have their events designated as being covered by the proposed law. As a Private Members Bill, it was not supported by the government of the day.

Other countries have though taken a similar approach to Hodgson’s Bill. In Ireland, the Sale of Tickets (Cultural, Entertainment, Recreational and Sporting Events) Act 2021 introduced a statutory scheme for the designation of venues and events. The resale of tickets to these events above the original sale price is now a criminal offence. In Australia, each state has a slightly different approach. It is a criminal offence to resell a ticket for more than 10% of its original face value in New South Wales, Queensland, South Australia and Victoria, though there are different approaches to designating the relevant venues and events to which these laws apply. For example, under the legislation in Victoria, the Taylor Swift Eras Tour was added as a declared major event to which the anti-touting laws applied. The US has preferred to use the secondary market to its own advantage, introducing new rules which ensure that anyone grossing over $600 in a year from the resale of tickets online will be liable for tax. All these varying responses to the issue suggests that Britain is lagging behind comparable territories, and that it is perhaps time to revisit Hodgson’s original proposal in the light of these more recent legislative developments.

Ticket pricing structures can be levers of social inclusion, enabling marginalised or disadvantaged groups the opportunity to access events by offering a range of options and prices for buying tickets. This approach is completely undermined when 3500 commercial touts are using software that restricts fans’ access to the primary marketplace and forces them to use the touts, who charge prices at the top of what the market can bear. The regulation of secondary ticketing is part of UK Music’s Manifesto for Music, where it calls for the government to, ‘protect music lovers by introducing measures to curb’ the ability of tickets to be resold at prices significantly above face value. The Government should protect music lovers by introducing measures to curb these practices’ It appears that regulation would have mainstream support, with an FFA Report highlighting consumer appetite for something to be done to tackle the issue, and momentum appears to be building. The report found that “74% of the UK population see online touting as major concern” and “68% said they would attend fewer gigs because of the amount they had spent buying at over face value’. Writing during the Covid lockdowns, Philip Kolvin discussed the importance of the “social economy” and that this should be seen as a public good that should be protected and enabled: “…at governmental level, the social economy should not just be seen as something which needs to be regulated. It should be something which government has a duty to promote; in a sustainable way, yes, but to promote nonetheless.”

Whilst Kolvin was writing primarily from a licensing perspective, looking at methods of saving the social economy post-covid, his reflections make important points in a broader cultural context. Perhaps there is scope to be even bolder? UK Music also argues for business rate cuts for music spaces and agent of change protection to help safeguard music venues threatened with closure. The Labour Party has always been perceived as having a closer affinity with, and affection for, culture than the Conservatives. There is a strong argument for Sharon Hodgson’s proposals for the regulation of ticket touting, or the models used in Ireland and Australia, to be part of an incoming Labour Government’s legislative plans. This could be incorporated into a bolder, broader and more holistic approach to the protection, promotion and celebration of culture and cultural events. Initial noises have been encouraging. In 2022, Keir Starmer gave a speech calling for visa waivers and EU wide cultural touring agreements: ‘The last Labour government oversaw a boom in creative industries and institutions…[t]he next Labour government will help the creative industries flourish again.’ For now, these are words rather than concrete policy, but it would be an easy win for the Labour party to make regulating ticket touting part of its manifesto and its legislative programme when in power. Sharon Hodgson and others will be pushing for this, but there is an opportunity to make this part of a much more holistic policy of protecting, nurturing and preserving our cultural industries.

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