How effective will the laws be at preventing 2014 World Cup ticket scams?

Published 30 January 2014 By: Kevin Carpenter

FIFA World Cup 2014 Brazil Logo

Since Brazil was confirmed as hosts for the 2014 FIFA World Cup on 1 October 2007, there have been a wide variety of issues that have faced the nation, the organisers and FIFA.

Those that have grabbed the most headlines in the past 12 months or so, particularly following the hosting of the Confederations Cup in Brazil in the summer of 2013 (a trial run for the main event), have been the anti-government protests and whether or not the stadiums will be safely completed on time for this years' tournament. However, as with all major global sporting events, ticketing is another issue that FIFA has sought to address well in advance of the tournament. There are a variety of "ticket crimes" or "ticket scams" that are associated with major events. Indeed, there is a significant portion of the official website for the 2014 World Cup dedicated to ticketing. Despite a number of good and important measures having been put in place by FIFA, and other parties such as the government in Brazil, scams have been uncovered recently in both the British and Australian press. Last week one UK newspaper claimed that the ticketing fraud surrounding the World Cup could run to £15 million in Britain alone.

Before taking a brief look at the Brazilian State laws in place to deal with ticketing issues, it is perhaps worth looking at the recent past, to the London 2012 Olympic Games, and how ticketing fraud was dealt with there. The Metropolitan Police Service in London set up a dedicated team called 'Operation Podium' to deal with serious and organised crime affecting the Olympic and Paralympic Games economy. A large part of that team's work was targeting those engaged in "ticket crime". At the conclusion of their three-year mandate they produced a "Problem Profile" document in February 2013. They broke ticket crime down into three distinct areas:

  1. Ticket fraud ('TF');
  2. Unauthorised ticket resellers (i.e. unauthorised secondary sales) ('UTR'); and
  3. Counterfeit tickets.

At the time the Olympics were awarded to the UK, there was no specific legislation preventing "ticket crime". However the International Olympic Committee ('IOC') insisted the UK government pass both civil and criminal legislation for "ticket crimes" relating to the Games. This was to be found in section 31 of the London Olympic and Paralympic Games Act 2006. There was some controversy as to whether it was appropriate to criminalise "ticket crimes". Similar laws have been put in place for the upcoming Glasgow 2014 Commonwealth Games.

The Problem Paper outlined a number of key findings, including:

  • A lack of legislation and regulation for "ticket crimes";
  • "Ticket crime" having links to other serious and organised crime;
  • Difficulty in suspending fraudulent and unauthorised ticket websites due to a lack of cooperation from many website hosts and registrars, who are somewhat legally ambiguous;
  • The public being unable to distinguish between authorised and fraudulent ticket websites.

What seems to have caught the attention of the British media in relation to 2014 World Cup tickets has been what the Problem Paper calls "ticket fraud", whereby organised criminal networks create legitimate looking websites, take payment for tickets and then fail to supply them.

So what do the sports and State laws in place for World Cup 2014 seek to do to tackle "ticket fraud"? Under the section of the 2014 FIFA World Cup official website, "Unauthorised Ticket Sales", it helpfully sets out the legal framework in Brazil relating to all "ticket crimes". Where we are talking about TF rather than UTR, it is Article 16 of the "FIFA World Cup General Law" that applies (the passing of which was a requirement upon being awarded the event), as anyone who sells, offers, exposes for sale, negotiates, deviates or transfers tickets to the World Cup is subject to civil sanctions and criminal penalties.

UTR and secondary resale markets for World Cup tickets are covered firstly by Article 41-F of the so-called "Brazilian Fan Statute" (Law No. 10,671/2003) which states that the resale of a sporting ticket, at a price superior to the face value on the ticket, is prohibited and subject to civil sanctions and possible criminal penalties. Secondly FIFA has a specific "Transfer & Resale Policy". Now "unauthorised" is very much different to "illegal". In FIFA terms, there is only one "authorised" ticket resale platform, and that is run through their officially appointed agent MATCH Services via the FIFA website. There are of course a number of other ticket resale businesses operating worldwide such as Viagogo, eBay's StubHub etc. However, although undoubtedly the FIFA policy is aimed more at the traditional illegal ticket touts/UTRs, they have sought to keep a very tight control on resale and have thereby also excluded legal resellers.

Although most consumers, and sports rights holders, would view this as a positive, despite somewhat distorting the market in its restrictive nature, there are a couple of elements of this policy which may limit its effectiveness in lessening the consumer harm caused by "ticket crimes". These two issues are stated in the 2014 FIFA World Cup Brazil Ticketing Fan Guide. Under the section headed "Can I re-sell my tickets?" it says:

"You can either choose to re-sell all or part of your order. If you only choose to sell part of your order, please bear in mind that you will not be able to sell the main applicant's ticket. But be aware that a ticket returned for resale will only be made available for resale if the category for the match is sold out at the time when the ticket is returned or at a later stage. There is no guarantee that a ticket submitted for resale will actually be resold."

Here are the problems:

  1. The main applicant cannot re-sell their ticket(s); and
  2. The resale will only be made if the pricing category for the particular match is sold out.

These two potentially significant caveats to FIFA's aforementioned strict ticket policies (if the empty seats at the 2010 World Cup in South Africa are anything to go by) undoubtedly will lead people to try and find other "unauthorised" ways to resell legitimately purchased tickets if they can't attend for an exceptional personal circumstance for example.

Ultimately, the success of any ticket policy will come down to the policing and regulation at the actual World Cup venues, and whether, as is stated in the "General Terms and Conditions for the Use of Tickets" on the FIFA website, the personalisation of each ticket with the identification of the Ticket Applicant is actually checked. I can say from personal experience that this certainly was not the case in South Africa. The seriousness and success of enforcement requires FIFA's close cooperation with the Brazilian national law enforcement and local authorities for each stadium.

FIFA and MATCH have made it clear in a recent press release that they have already sought to bring numerous claims against either TFs or UTRs in both Brazil and in the country where the alleged ticket scammers are operating from. However, as the Metropolitan Police said in their Problem Paper, not only in the UK but also in other jurisdictions, there is likely to be problems in prosecuting scammers due to the Key Findings stated earlier.

Therefore, it would be better for supporters who are looking to attend the tournament to, of course, buy tickets only through the official channels listed on the FIFA website; but secondly, to heed advice to be found both on the UK government website (for instance) and in the Appendix to the Problem Paper.

Despite FIFA's best (although somewhat flawed) efforts there are likely to be a number of issues with ticketing for the 2014 World Cup that may lead to some interesting and practically difficult cases being brought for prosecution both before, during and after the tournament.

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Kevin Carpenter

Kevin Carpenter

Kevin is a advisor and member of the editorial board for LawInSport, having previously acted as editor. In his day-to-day work he has two roles: as the Principal for his own consultancy business Captivate Legal & Sports Solutions, and Special Counsel for Sports Integrity at leading global sports technology and data company Genius Sports.

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