New ticket scalping law powerless to protect consumers, critics warn
Law takes effect on July 1 — but province says there’s no new money or staff to enforce it
With 50 days to go before Ontario’s landmark ticket scalping law comes into force, entertainment industry insiders worry it will be powerless to protect consumers.
The Ticket Sales Act, which passed last December and comes into force July 1, will ban computer “bots” used to automatically buy up sports and concert tickets and cap resale markups at 50 per cent above face value.
When the law was passed, the province promised “new enforcement measures.” The province told the Star and CBC this week that there would be no new funding or additional personnel, calling into question whether the sale of hundreds of thousands of tickets for events this summer will be effectively policed.
Veteran radio DJ Alan Cross has followed the rapid evolution of the ticket market as it moved online and believes Ontario’s new law will be unenforceable.
“This is a horrible, poorly thought-out piece of legislation,” Cross said at a Canadian Music Week event Thursday. “It’s a populist pander to fans … (But) it’s not going to make it easier for fans to get tickets.
“If they’re not adding new resources, that would be a pretty toothless law,” he said.
Brian Gray, a spokesperson for the Ontario Ministry of the Attorney General, said police will be responsible for enforcing the ban on bots while investigators with the Ministry of Consumer Services will enforce the markup cap.
“Existing resources will be used to enforce the new Ticket Sales Act,” Gray said.
The Ontario Provincial Police has no plans for a “designated team specific to the scalping laws,” said Staff Sgt. Carolle Dionne, an OPP spokesperson. The Toronto Police declined to comment on its enforcement plans.
Many of this summer’s hottest concerts have already sold out and scalped tickets are available on resale sites like StubHub at prices that far exceed a 50-percent markup.
For example, a pair of $250 tickets for the Imagine Dragons show in June are available for $869 each on Ticketmaster Resale. Two tickets for September’s Ozzy Osbourne show, which have a face value of $1,500 each, are being sold on StubHub for $4,592 a piece.
“The cap is going to be unenforceable,” said Jared Smith, president of Ticketmaster North America at a CMW event. “I just don’t think it’s going to work.”
“It’s going to drive bad activity underground where it’s going to be worse,” he said. “There have been resale bans and price caps in the States for decades and they’re not enforceable.” StubHub, which competes with Ticketmaster on the online resale market, says the law got it right on bots but wrong on price caps.
“There’s elements of (the law) that don’t do anything to protect the consumer,” said Jeff Poirier, StubHub’s general manager of music. “With bots, StubHub firmly believes that is an issue and we’re supportive of any legislation. But when it comes to price caps, it’s a futile effort.”
An ongoing investigation into the ticket resale market by the Star and CBC has revealed how mass scalpers use bots to buy up hundreds of tickets, which makes it far more difficult for fans to get them in the box office. Those scalpers feed tickets to the online resale market, where average prices can exceed double the face value.
The world’s biggest online platform, StubHub gives mass scalpers preferential treatment by providing them with automatic pricing tools and charging them lower fees than those charged to fans.
Professional sports teams are getting in on the action. The Blue Jays have a secret deal with StubHub that gives them a percentage of every ticket for their games sold on the site. The Maple Leafs have imposed a 30-per-cent markup on those it deems commercial resellers. In addition, the team has a deal with TicketMaster but will not say whether it gets a percentage of the resale ticket revenues.
It’s an ongoing revolution in the ticketing industry that blurs the line between the box office and scalpers, raising fears fans will pay even more.
Ontario’s ticketing law started out as a private members’ bill in the fall of 2016 amid public outcry after tickets for the Tragically Hip’s farewell tour were snapped up in minutes and reposted online for hundreds or thousands of dollars.
The new law says Ticketmaster and StubHub will be responsible for ensuring the antibot and markup rules are respected on their online ticketing platforms.
Ticketmaster says it’s ready with staff and technology.
“We are making modifications on both the tech and operational fronts, and Ticketmaster Canada will be fully prepared for the legislation in Ontario to be enforced,” said PattiAnne Tarlton, chief operating officer for Ticketmaster Canada. “Resale tickets posted on our marketplace will not exceed 50 per cent of the face value.” StubHub provided few details about its preparations for the new law and said those who post tickets to the site are responsible for following the rules.
“StubHub is actively working towards compliance with Ontario’s new legislation. In addition, StubHub requires that our sellers comply with all applicable laws,” spokesperson Cameron Papp wrote in a statement.
Ticketmaster’s Tarlton, who was inaugurated into the Cana- dian Music Hall of Fame on Thursday, noted that it was illegal to sell a ticket for above face value in Ontario until 2015.
“That price cap didn’t work. You didn’t stop the behaviour. You still had supply and demand issues, and you still had people reselling tickets. So that price cap is already proven to not work,” she said.
To give customers confidence, Ticketmaster guarantees the tickets posted for resale on its site aren’t counterfeit and StubHub provides a money-back guarantee for the tickets sold on its platform. Both companies say it’s something you don’t get when buying scalped tickets on the street.
With the price cap in place, StubHub’s Poirier said, “We firmly believe that some transactions will go off into — I wouldn’t even call it the black market, I would just call it offline. It’s you at your own risk, with no guarantees, no protections.”
DJ Cross shares the same concern. “Say what you want about StubHub or TicketsNow or any of the other secondary sellers (but) at least they have some consumer protection in place,” he said. “When you have a guy that’s selling it on Craigslist or Kijiji, you don’t know what you’re getting.”
An OPP spokesperson said there are no plans for a “designated team specific to the scalping laws”