Illegal and legal aspects of ticket scalping

http://www.thefinancialexpress-bd.com/2015/02/12/80728 VOL 22 NO 93 REGD NO DA 1589 | Dhaka, Thursday, February 12 2015

Illegal and legal aspects of ticket scalping M S Siddiqui Resellers of things, especially tickets, are known in Bangladesh as 'blackers'. Formally they are called scalpers in English-speaking countries. A 'ticket blacker' is someone who resells tickets of trains, buses or admission to sports or cultural events at more than their established value. Ticket resale is known as ticket scalping, which is the act of reselling tickets for admission to events.

Due to this practice, bus and train passengers are often deprived of tickets even after waiting in long queues at train and bus stations. 'Black marketers' or 'ticket touts' grab large numbers of tickets from counters to sell them at higher prices later. In Bangladesh, they dash the hopes of many city-dwellers willing to go home or to other places, particularly during the Eid festivals.

The scalpers buy tickets in collusion with a section of transport officials.

The act of reselling tickets often shows that people who genuinely want to attend a concert or an event are unable to do that because of the scalpers, or brokers, selling tickets to their field agents for resale. A worrying aspect of the matter is that when buying tickets from the secondary market, there is no way of knowing whether they are genuine, or not.

Resale of tickets is illegal in many countries including Bangladesh. Law prohibits the sale of tickets at a price higher than that at which they were first issued. It is illegal to purchase tickets with the intention of reselling them for a profit. Section 2 (b) of The Special Powers Act 1974 says, "dealing in the black-market" means selling or buying anything for purposes of trade at a price higher than the maximum price fixed by or under any law, or, otherwise than in accordance with any law, and sub section 2b(i), selling, bartering, exchanging, supplying or disposing of articles rationed by or under any such law. The Section 25 (1) says, "Whoever is found guilty of the offence of hoarding or dealing in the black-market shall be punishable with death, or with imprisonment for life, or with rigorous imprisonment for a term which may extend to fourteen years, and shall also be liable to fine, provided that if, in the case of an offence of hoarding, the person accused of such offence proves that he was hoarding for purposes other than gain, whether financial or otherwise, he shall be punishable with imprisonment for a term which may extend to three months, and shall also be liable to fine."

In the global context, a ticket reseller is any person, firm or corporation who/which resells or engages in the business of reselling any tickets for a place of entertainment or who/which operates an internet website or any other electronic service that provides a mechanism for two or more parties to participate in a resale transaction or which facilitates resale transactions by means of an auction, or who/which owns, conducts or maintains any office, branch office, bureau,

agency or sub-agency for such business.

The secondary ticket market is a highly advanced market like those for commodity exchange or securities exchange. In some markets, 'derivatives' are a practice, which was in use mostly in the 1980s in some Western countries. Some ticket brokers offer tickets even before the tickets are officially available for sale. In such scenarios, those ticket resellers are actually selling forward contracts of those tickets. They are engaged in selling 'options' on future sporting events. Options are an advanced financial product offered by financial institutions, but the Bangladesh financial world does not have such product.

In some countries, primary sellers are authorised to sell tickets to secondary sellers. 'Primary sellers' mean persons other than secondary sellers, who are engaged in the business of making tickets available for sale, and include the owners of the place to which a ticket provides admission, the promoters of the event that occurs at that place, and any agent or broker of those persons. Any other person in the business of reselling tickets is a secondary seller.

The 'secondary seller' is a person, or any agent or broker of that person, who is engaged in the business of making available for sale tickets that have been acquired in any manner and by any person from or through a primary seller. A 'ticket' means any card, pass, paper, document or thing, whether in electronic form or otherwise, that, on presentation, entitles the holder to admission to an event.

The 'resale' activity may also involve a season-ticket holder. Season-ticket holders generally receive the same seat locations year after year thus they can enter a contract to deliver on tickets that they own the rights to, even if those tickets have not even been printed or sent to the original ticket holders. This pre-sale practice has fallen out of favour as ticket buyers are now accustomed to viewing online available inventory on broker sites and receiving their purchases the next day via overnight delivery.

The buyers have no option of getting money back from a 'blacker' even if the tickets do not provide facilities as advertised. Hazards may come up with wrong seats, or wrong events, if tickets are forged or copied, are stolen from someone else and have been cancelled by the promoter or delivered too late for the event. Even if the tickets are genuine and otherwise valid, some event promoters may deny you admission, or deny you a refund for a cancelled event, if they discover that you have purchased your tickets from unauthorised sellers.

When the supply of tickets for a given event available through authorised ticket sellers is depleted, the event is considered 'sold out', generally increasing the market value for any tickets on offer through secondary sellers.

Ticket resale is more common in sporting events and music events/concerts. Tickets are bought from service providers and are then sold to persons at higher than face value depending on demand, which itself tends to vary as the event date approaches. They often work outside sporting events and concerts, with unsold tickets that they try to resell at a profit.

The persons with no tickets nurture the hope that they can buy spare tickets from fans at, or

below, face value to sell on at inflated prices. Unofficial ticket agencies or 'ticket touts' are not authorised by performers to sell concert tickets on their behalf.

In the United Kingdom resale of football tickets is illegal under Section 166 of the Criminal Justice and Public Order Act 1994, unless the resale is authorised by the organiser of the match.

Secondary ticketing markets, namely StubHub, have signed partnership agreements with relevant authorities. Other than in the case of football tickets, there is no legal restriction against reselling tickets in the UK. A similar situation is found in the Netherlands where resale of football/soccer tickets is illegal unless through the official reseller Skelper.nl, an official partner of clubs in Netherlands. The first official secondary ticketing internet platform launched in the Netherlands in 2007, and by now there are several secondary internet markets.

Bangladesh may allow an internet secondary market by regulating the resale and purchase of tickets for the benefit of citizens. It may prove helpful to authorities at the Railway and the sponsors of entertainment events. Like the secondary markets in other parts of the world, regulatory guidelines may include provisions for automatic reporting after the sale of one or more tickets. The report contains the ticket reseller's potential legal obligation to pay the applicable local amusement tax in connection with his sale of tickets; and discloses to law enforcement or the government tax officials, without subpoena, his name, city, telephone number, e-mail address, user ID history etc.

The system may experience fraud complaints; it may also accompany bidding and listing history of any specifically identified reseller or purchaser upon receipt of a verified request from law enforcement or other government tax officials relating to a criminal investigation or alleged illegal activity. The railway companies guarantee to all purchasers that they will provide and, in fact provide, a full refund of the amount paid by the purchaser in case of cancellation of travel schedules etc.

Bangladesh can also reduce corruption in this service sector by allowing secondary ticket market or ticket exchange, and increase revenue and, thus, promote digital Bangladesh.

The writer is a Legal Economist.

shah@banglachemical.com