Eric Schneiderman’s Office Attempts to Clean Up the New York Ticket Industry

New York Attorney General’s Office Tackles Ticket Brokers and Bots

eric schneidermanFor over one hundred years, the Broadway ticketing industry has suffered at the hands of ticket brokers, who buy all the juicy seats to the most popular Broadway shows and then resell them at a higher value, often making huge profits and returning no additional value to the consumer or the show’s producer.  The office of Eric Schneiderman, the New York Attorney General who has served since 2011, has long been fed up with consumer complaints from New York Residents and is finally doing something about it. Following a multi-year investigation, his office has recently released results that demonstrate an enormous amount of illegal ticket broker activity, and he has pledged to take on the gargantuan task of cleaning up the ticket industry in New York State.  Their focus has initially been on large arena shows such as concerts and sporting events, where in some recent examples 90% of all available tickets were grabbed by ticket brokers using bot technologies and other potentially illegal practices; widespread condemnation by the public has forced the attorney general’s office to act. With Ticketmaster now the owner of TicketsNow, an aftermarket ticket broker, confusion abounds in the ticket-buying market, where the average consumer cannot get a fair crack at buying tickets at reasonable prices.

A Combination of Illegal Behavior and Evolving Legalitybots

Legal consideration about equitable access to entertainment event tickets is not a new concept.  Prior to 2007, there was a cap of 45% above face value that brokers could charge for re-sale tickets.  In 2007, however, New York State lifted the caps in an effort to allow the market the adjust to the new online resale marketplaces.  The law continued to evolve in 2010 with a change to allow the market to find its own price on resale tickets.  While Schneiderman admits that there were some positive benefits to lifting this cap, such as guaranteeing the legitimacy of broker ticket offers, the problems have persisted and even gotten worse.  While allowing the market to adjust may have been thought to allow for more affordable tickets, instead it has become, in some cases, almost impossible to buy tickets through traditional box office avenues, with tickets becoming prohibitively expensive.  Therefore, Schneiderman believes that re-instating caps may be one way to combat this issue.  Furthermore, unlike any other state in the nation, New York has a strange law that prohibits non-transferable paper tickets, which if overturned could serve as a barrier to eliminating scalping.  There is therefore a new proposal to legalize the transfer of paperless tickets in New York State.  In any case, as Schneiderman’s investigation disclosed, the rampant use of ticket bots by ticket brokers is one of the major reasons why tickets get scooped up before the public can access them.

A Proposal to Make Bots a Criminal Offense, and Implications for Broadway

While the use of bot technology to buy tickets is presently illegal, it is merely a civil offense which results in civil sanctions for brokers who violate the law.  Schneiderman’s office believes that criminal prosecution for the use of bots may act as a bigger deterrent, as would the passage of the BOTS Act presently in consideration in Congress.  Other illegal price floor practices are going on with NFL team tickets, with ticket market manipulation by the NFL. Although Schneiderman’s investigation has thus far focused on concerts and sporting events, there are certainly implications for Broadway, and the Attorney General will likely continue to explore this area as well.  While the number of tickets withheld by the Broadway venue, known as house seats, are comparatively fewer than those at some major arena events, the practice is still commonplace and restricts public access to tickets.  On Broadway, speculative tickets, when seats are offered on secondary markets by those who don’t even possess them, generally only manipulate top shows, such as Hamilton, The Lion King, and The Book of Mormon.  Another practice that rips off the Broadway consumer is ticket brokers’ use of bots and cheap labor in India and China to circumvent controls that limit ticket purchases.  For tickets to be set at an affordable price for the community and a good return for the producer, there must be legislation to end ticket bots and cut out the price manipulators.  Furthermore, the repeal of the non-transferable paper ticket law could help, and government ID matching the name on the ticket could be required at the door.  Another solution could be that a ticket’s original face-value be published for all after-market ticket sales, so that the consumer has more information about how much extra they are paying, which would lead to a reduction in demand for after-market tickets, having a knock-on affect of a reduction in ticket speculation and a more fair and equitable ticket market for average consumers.

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Jennifer R Jones
With over 20 years experience in the Broadway field, including marketing, production, development and show investment, Jennifer R Jones is an all-around subject-matter-expert in the Broadway business. She lives in Manhattan with her husband and her iMac and tries to see at least five Broadway shows per week.