Topic:
CONSUMER PROTECTION; RETAIL TRADE; RECREATION (GENERAL);
Location:
CONSUMER PROTECTION;

OLR Research Report


December 18, 2006

 

2006-R-0761

TICKET SCALPING

By: Daniel Duffy, Principal Analyst

You asked for a survey of state laws on ticket scalping.

SUMMARY

We located laws in 27 states on ticket reselling. Eleven states, Connecticut among them, prohibit ticket scalping, which is generally understood to mean reselling a ticket to an event for profit. Of these, eight allow resellers to impose a service charge. One generally prohibits scalping, but allows the original seller to authorize an Internet website through which tickets may be resold at any price.

Five states establish a regulatory scheme for ticket resellers. All require ticket resellers to register with the state, disclose their prices, and establish a refund policy.

Two states explicitly give localities the authority to regulate or prohibit ticket scalping. This number probably understates the number in which ticket scalping is regulated by localities. In many states, localities may have the authority to regulate this activity under their general powers without needing a specific grant of authority from the state.

Two states have laws that explicitly allow ticket scalping except in or near event venues.

STATES THAT PROHIBIT SCALPING

Most of the eleven states allow tickets to be resold, but limit the fee a reseller may impose by requiring it to be reasonable, by a price cap ranging from $1 to 10% of the face price, or by both.

STATES THAT REGULATE

All five states require ticket scalpers to register annually, to have a permanent office within the state, and to establish and disclose a ticket refund policy. Most require agencies to post a bond conditioned on the promise that they will not be guilty of fraud, extortion, or violation of the ticket reselling law. Illinois requires agencies to keep a cash account of at least $100,000 in the state to settle valid consumer claims. An agency can meet this and other consumer protection requirements by belonging to an association dedicated to meeting these requirements on its members' behalf.

New Jersey prohibits using “diggers,” who are employees hired to obtain tickets by intimidating purchasers waiting in line to buy tickets.

STATE-BY-STATE CAPSULE SUMMARIES

Alabama

● Requires ticket scalpers to pay a $100 license tax (Ala. Code 40-12-167)

Arizona

● Allows a ticket purchased for resale to be sold if the sale occurs more than 200 feet from an event (Ariz. Rev. Stat. 13-3718)

Arkansas

● Prohibits scalping tickets to collegiate or high school sporting events or any charitable event

● Prohibits scalping tickets to musical events but allows resellers to impose a reasonable service charge (Ark. Stat. 5-63-201)

California

● Allows tickets purchased for resale to be sold but prohibits reselling on the grounds of an event except with permission (Cal. Penal Code 346)

Connecticut

● Prohibits scalping tickets but allows resellers to impose a reasonable service charge up to $3 (CGS 53-289)

Delaware

● Generally allows scalping, but prohibits it on the day preceding and the day of (1) events held at the Bob Carpenter Center of the University of Delaware and (2) NASCAR races held at Dover Downs (Del. Code 913)

Florida

● Allows resellers to charge $1 more than face value of tickets (1) for passage or accommodations on common carriers, (2) to multi-day or multi-event tickets to a park or entertainment complex, or (3) sold through an Internet website that does not meet statutory criteria

● Allows tickets sold through an Internet website that meets the following criteria to resell tickets without price limits

Website must be authorized by original seller

Must guarantee full refund if the event is cancelled, the purchaser is denied admission through no fault of his own, or the ticket is not delivered in the way the purchaser requests and this results in an inability to attend the event

Website must disclose its guarantees and that it is not the original issuer, seller, or reseller and does not control the pricing

● Explicitly states that it does not authorize reselling tickets on the property where an event is taking place (Fla. Stat. 817.36)

Georgia

● Requires ticket resellers to be registered

● Prohibits anyone other than a registered ticket broker from selling a ticket for more than face value plus $3 service charge, unless the event sponsor authorizes a higher amount

● Authorizes an event sponsor to restrict purchaser's ability to resell a ticket

● Sets standards for registered ticket brokers, including (1) maintaining a permanent office in-state, (2) paying a $500 annual registration fee, and (3) disclosing its refund policy

● Allows brokers to sell tickets at their permanent offices or through the Internet

● Prohibits ticket brokers from (1) hiring employees to buy tickets to future events, (2) acquiring more than 1% of the tickets to any event

● Establishes other requirements, including ticket refund if event is cancelled

● Prohibits reselling within 1,500 feet of venues with a seating capacity under 15,000 and within 2,700 feet of larger venues

● Allows original purchasers of tickets for personal use to resell for any price except within the 1,500 foot or 2,700 foot buffer zones

● Allows charities to resell tickets as a fundraising activity without registering or being subject to price limits

● Allows event sponsors to permit ticket reselling within the buffer zones (Ga. Code 43-4B-25 to 43-4B-31)

Hawaii

● Prohibits scalping tickets to boxing matches (Haw. Rev. Stat. 440-17)

Illinois

● Allows ticket resale by registered ticket brokers, Internet auction houses, and Internet websites

● Prohibits an event sponsor from restricting purchaser's ability to resell a ticket if the reseller is registered

● Sets standards for registered ticket brokers, including (1) maintaining a permanent office in-state, (2) paying $100 annual registration fee, and (3) disclosing their refund policy

● Broker's principal business must be reselling tickets

● Must maintain $100,000 cash account in Illinois available to satisfy valid consumer complaints

● Brokers can meet statutory consumer protection requirements, including the requirement to keep a cash account, by belonging to an association that is specifically dedicated to meeting them

● Prohibits a broker from selling tickets “near the facility”

● Internet auction houses and Internet websites must meet substantially similar requirements, except that auction sites must also register as auction houses and both types of sites must adopt an independent and disinterested dispute resolution procedure to settle disputes between ticket resellers and purchasers (720 ILCS 375/.01 to 375/4)

Indiana

● Prohibits scalping tickets to boxing matches (Ind. Code 25-9-1-26

Kentucky

● Prohibits ticket scalping without authorization of the original seller (Ky. Rev. Stat. 518.070)

Louisiana

● Prohibits ticket scalping except through the Internet

● Allows tickets sold through an Internet website that meets the following criteria to resell tickets without price limits

Website must be authorized by original seller and venue

Must guarantee full refund if the event is cancelled, the purchaser is denied admission through no fault of his own, or the ticket is not delivered as promised and this results in an inability to attend the event

Website must disclose its guarantees (La. Rev. Stat. 4:1)

Maryland

● Prohibits boxing, wrestling, and kickboxing promoters from allowing the sale of tickets for more than the admission price (Md. Code 43-318)

Massachusetts

● Requires a license to resell tickets to state-licensed entertainment and athletic events

● Allows resellers to impose reasonable service charges (Mass. Gen. Laws Ch. 140 185A to 185G)

Michigan

● Prohibits ticket scalping

● Apparently prohibits season ticket holders and other ticket package purchasers from selling their tickets. Specifically, the law states that the purchaser may not sell his ticket if (1) the original ticket seller sells tickets under restrictive conditions at a lower rate than general admission, (2) the purchaser's name appears on the ticket or is registered in the seller's office as the ticket holder, and (3) the ticket states that it is not transferable and sold only to the named purchaser (Mich. Comp. Laws 750.465)

Minnesota

● Prohibits scalping tickets but allows resellers to impose a service charge (Minn. Stat. 609.805)

Mississippi

● Prohibits scalping tickets to collegiate athletic events and to any event held on state property (Miss. Code Ann. 97-23-97)

Missouri

● Prohibits scalping tickets but allows resellers to impose a service charge (Mo. Rev. Stat. 578.395)

New Jersey

● Requires anyone engaged in the business of ticket reselling to register

● Sets standards for registered ticket brokers, including (1) maintaining a permanent office in-state, (2) paying an annual registration fee that may be as much as $500, and (3) disclosing its refund policy

● Prohibits using “diggers,” or people temporarily hired to secure tickets by intimidating purchasers waiting in line to buy tickets

● Requires brokers to disclose when they are employing “try and get,” which is accepting a ticket order before possessing the tickets

● Must file a $10,000 bond conditioned on the promise that the broker and employees will not be guilty of fraud, extortion, or violation of the ticket broker law

● Limits the amount above face value that someone who is not a registered ticket broker or season ticket holder may charge to the greater of $3 or 20% of face value

● Limits the amount above face value that someone who is a registered ticket broker or season ticket holder to 50% above the amount paid for the ticket

● Prohibits reselling tickets in the vicinity of an event except in designated areas

● Prohibits giving anything valuable to an event employee to obtain tickets

● Prohibits original sellers from holding back more than 5% of the tickets

● Requires the licensing agency and event sponsors to create a way for season ticket and other ticket holders to legally sell their tickets back to the venue (N.J. Rev. Stat. 56:8-26 to 56:8-38)

New Mexico

● Prohibits scalping tickets to collegiate sporting events but allows resellers to impose a service charge (N.M. Stat. Ann. 30-46-1)

New York

● Requires ticket resellers to be licensed by locality in which it operates and to post a bond conditioned that the reseller will not be guilty of fraud, extortion, or violation of the ticket broker law

● Sets maximum reselling price of the face value of the ticket plus 45% if the venue seats more than 6,000 or the face value plus 20% if the venue is smaller

● Allows resellers to add a reasonable service charge

● Allows operators of venues to manage Internet websites to resell tickets within the maximum reselling price

● Requires resellers, or anyone that facilitates reselling, to guarantee that it will refund the amount paid by a purchaser if the event is cancelled, the purchaser is denied admission through no fault of his own, or the ticket does not conform to its advertised description

● Requires resellers to post a $25,000 bond conditioned on the promise that the agency will not be guilty of fraud, extortion, or violation of the ticket reselling law

● Prohibits reselling tickets within 1,500 feet of a venue seating more than 5,000, but allows operators to designate reselling areas within that zone

● Prohibits anyone from paying a venue employee a commission, gratuity, or bonus in connection with the sale of tickets

● Exempts charities that use the profits wholly for their charitable purposes (N.Y Arts & Cult. Aff. 25.01 to 25.35)

North Carolina

● Prohibits scalping tickets but allows resellers to impose a reasonable service charge up to $3 (N.C. Gen. Stat. 14-344)

Ohio

● Authorizes municipalities to regulate (Ohio Rev. Code 715.48)

Rhode Island

● Prohibits scalping tickets but allows resellers to impose a reasonable service charge up to the greater of $3 or 10% of its face value (R.I. Gen Law 5-22-26)

South Carolina

● Prohibits scalping tickets but allows resellers to impose a reasonable service charge of up to $1 (S.C. Code Ann. 16-17-710)

Virginia

● Authorizes localities to prohibit ticket scalping, except by religious or charitable organizations engaged in fundraising (Va. Code Ann. 15.2-969)

Wisconsin

● Prohibits scalping tickets to the state fair (Wis. Stat. 42.07)

COMPARISON TABLE

This table broadly categorizes each state's ticket scalping law. Some defy simple categorization. For example, Louisiana prohibits ticket scalping, but allows and regulates ticket resellers who do so using the Internet.

Table 1: Ticket Scalping Laws

State

Prohibits

Regulates

Local Control

Explicitly Allows

Other

Alabama

       

X

Arizona

     

X

 

Arkansas

X

       

California

     

X

 

Connecticut

X

       

Delaware

       

X

Florida

X

       

Georgia

 

X

     

Hawaii

       

X

Illinois

 

X

     

Indiana

       

X

Kentucky

X

       

Louisiana

 

X

     

Maryland

       

X

Massachusetts

X

       

Michigan

X

       

Minnesota

X

       

Mississippi

       

X

Missouri

X

       

New Jersey

X

       

New Mexico

       

X

New York

X

       

North Carolina

X

       

Ohio

   

X

   

Rhode Island

X

       

South Carolina

X

       

Virginia

   

X

   

Wisconsin

       

X

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