Tickets touts and technology - the latest trends and implications for sport
Published 05 November 2018 By: AnneMaree McDonough
Over the past two years there has been a concerted attempt by the UK by Government and regulatory institutions such as the Competition and Markets Authority (CMA) to protect consumers from excessive pricing, fraud and loss in the secondary ticket market. Louise Millington-Robert’s LawInSport article, Ticket Fraud: A review of the UK’s legislative developments to regulate the secondary ticket market,1 provides an excellent review of the legislative developments for those who are interested.
This article examines the latest in ticket resale and emerging technology from a practical legal perspective. It focuses on the developments and practices currently being adopted in the primary and secondary ticket markets and their implications in the context of sports. It identifies that in adopting new mechanisms for ticketing, sporting organisations need to be alive to the issue of inadvertent exclusion. Specifically, it looks at:
Closure of main resale sites and enforcement against Viagogo
The role of official ticket exchanges
Advances in paperless tickets
The role of smartphones
Verified fan schemes
Ticketing and the blockchain
Closure of main resale sites and enforcement against Viagogo
Perhaps one of the most dramatic events in the "war" on ticket resale has been the closure of a number of high-profile resale sites. SeatWave and GETMEIN!, both owned by TicketMaster, were closed on 13 August with TicketMaster announcing they would be replaced by a fan-to-fan exchange, expected to launch in October.2 This followed an extensive period of investigation and focus on these sites by various governmental and regulatory bodies.
The CMA began investigations in 20163 against secondary ticketing websites that it suspected were breaking consumer protection law. Following further work in 2017, in 2018, the three largest ticket reselling websites, StubHub, SeatWave and GETMEIN!, formally committed to providing greater transparency about tickets being resold via their platforms via undertakings given to the CMA4. The commitments to greater transparency included making clear prior to purchase whether there was a risk that the buyer might be refused entry at the venue, the location of the purchased seat and whether the ticket was being sold by an individual or a business.
The CMA enforcement action was in addition to the action taken by the Advertising Standards Authority against all four resale sites,5 as well as investigations by National Trading Standards and Trading Standards Scotland.
Following the announced closures by TicketMaster of its sites, StubHub remains in operation as does Viagogo, the fourth main ticket resale site and the only one not to provide undertakings to the CMA during the CMA’s investigations and enforcement activities. As a result, the CMA has launched court action against Viagogo on the basis of the CMA’s concerns that Viagogo continues to breach consumer protection law by not making the changes to its behaviours that the CMA considers necessary.6
The launch of TicketMaster’s own fan-to-fan exchange7 will see it compete with existing fan exchanges such as Twickets and TicketSwap, as well as smaller versions such as Scarlet Mist Ethical Ticket Exchange. Twickets allows fans to sell their tickets at no more than face value while TicketSwap allows users to charge up to 20% above the original price. TicketMaster has indicated that its exchange will allow customers to sell ticket at face value or below.8
It will be interesting to see what impact, if any, the changing nature of ticket resale sites has on the resale of sports tickets, particularly given many sports clubs or events have, or are moving to, introduce their own ticket exchanges as the only authorised way for a customer to resell their sports tickets.
The role of official ticket exchanges
As indicated above, sporting club, event and venue-owned ticket exchanges are increasingly common. Premier League clubs have led the way with their ticket exchanges. Arsenal, for example, has an exchange that allows season ticket holders either to sell a ticket to another member or to transfer it electronically to another party.
Certain limitations usually exist on these exchanges, the most common being the tickets can only be offered on the exchange once the match in question is sold out. In addition, the exchange can also limit the time at which a ticket can be uploaded and limit the time until which the ticket can be sold, often up to 24 hours before kick-off. On the Arsenal exchange, the ticket price is fixed and the exchange charges a fee that ranges from 4%, up to 10% depending on the recipient. Using the exchange to transfer a ticket to a friend or family member for free attracts no charge. Where a ticket is sold or transferred on the exchange, the vendor’s membership card is cancelled for that game.
In November 2017, England Rugby introduced an online ticket exchange service for England rugby games.9 Sports venues are also increasingly operating ticket exchanges. The French national stadium, Stade de France, allows purchasers to resell their tickets for certain events on its exchange at face value or less. The Stade de France exchange also, rather than making a deduction from the sums earned by the seller, charges the purchaser an administration fee.10
Finally, major sporting events are also introducing their own exchanges. The 2015 Rugby World Cup offered a resale service11 and a similar service will be available for the 2019 event though details are not yet available. What is already clear, however, is that certain types of ticket packages for the 2019 World Cup (i.e. those to see all games at a particular stadium or to see all games of a particular team) will be excluded from resale through this exchange.12
While the growth in the number of exchanges for sporting events is to be welcomed, the benefits for customers wishing to sell and buy tickets will only be realised if the customer experience is flexible and the exchanges open promptly and close as late as possible around the timing of the event.
Use of ticket exchanges is also likely to be more easily maximised when tickets are provided to the original purchaser in formats other than on paper. The use of exchanges by sporting bodies therefore needs to form an integral part of the whole customer experience in terms of ticketing.
Advances in paperless tickets
In an attempt to prevent touts from obtaining tickets, and to combat unauthorised resale, some entertainment events have adopted stringent paperless ticketing approaches.
If you are going to see the musical Hamilton in the United Kingdom, for example, there are no tickets, just a ticket reference number. Obtaining the ticket on the day involves turning up, producing the credit card you paid with and providing photo ID, and receiving a small printed seat confirmation. Resale of any kind is not possible. Where a customer has a change of circumstance, tickets can only be cancelled and refunded up to 48 hours before the performance.
The Hamilton paperless ticketing is no doubt effective insofar as it prevents resale and massive premiums that were being charged for resold Hamilton tickets in the United States. Although successful on those metrics, the system lacks flexibility to refund those unable to attend inside the 48-hour window.
More importantly, the Hamilton system also, potentially, has unintended consequences, given it requires the production but not retention of the details of government-issued photo ID such as a driving licence or passport.13 These documents are not held by all UK citizens however,14 which suggests in their zeal to stamp out unauthorised resale, the producers may inadvertently be blocking access to a segment of the UK population.
While some might argue the overlap between people lacking government-issued photo ID and those wishing to purchase tickets for Hamilton may be limited, if such paperless ticket mechanisms were to become more widespread, the issue of inadvertent exclusion could become more problematic. Sports organisations looking to adopt this type of paperless ticket mechanism should also be alert to the possible inadvertent consequences of societal exclusion if these types of requirements are adopted.
These mechanisms also probably have a further limitation for sporting events as opposed to smaller venues such as theatres. Theatre-goers for Hamilton are asked to turn up an hour before the performance to pass through the ticketing checks, show their card and ID and have their seat ticket printed. While this is feasible for a small theatre with fewer than 2,000 seats, it is unlikely to be achievable by a large sporting stadium holding 60,000-80,000.
The role of smartphones in ticketing
In the United States, some sports teams are moving towards paperless tickets in a different form, delivering tickets to the customer’s mobile phone. While mobile ticketing is commonly offered as an option alongside paper tickets or printing out your tickets at home, the Broncos have moved to all mobile ticketing for the 2018 season, and there will be no hard copy or print-at-home option. Bronco customers without mobile phones could pick up a radio frequency identification (RFID) token on a case-by-case basis.15 The introduction of the all mobile option for the Broncos opening fixture attracted a certain amount of backlash with some fans complaining that they were queuing outside the stadium and missed up to a quarter or a half of the game. This appears to be because although the Broncos had trialled the game during preseason, many season ticket holders had not attended the preseason game. In addition, an update to the relevant app may have required fans to re-enter their log in details adding more time to the process.16
Ofcom’s 2018 statistics illustrate that in the United Kingdom 78% of adults own a smart phone, although ownership is divided between age groups. While 95% of those aged 16-24 have a smart phone, the figure is only 51% for those aged 55 and over.17 Finally there is a small but potentially growing movement of people who are choosing to give up smart phones for old school mobile phones with only voice and text capabilities.
Again, these figures would suggest the exclusion of particular segments of the population will need to be considered by sports events or bodies thinking of moving to all mobile ticketing and that workarounds will always need to be in place for those who do not or choose not to carry a smart phone. Sports bodies would also do well to consider whether there may be other impacts of adoption of all mobile tickets and be prepared to address them. These may range from battery issues and additional roaming costs for foreign visitors, to the impact of potentially a large number of customers all trying to access data on their mobile phones during a short period of time on venue Wi-Fi, as well as mobile coverage in the area.
Verified fan schemes
In the entertainment segment of ticketing, TicketMaster has launched a Verified Fan mechanism that artists can choose to use for their tours18. The scheme works on the basis that fans register their interest in the presale of tickets for a tour before a particular date. TicketMaster then uses artificial intelligence to identify whether a particular registrant is a "fan" and then issues those who make the cut with a code that can be used in the Verified Fan presale.19 First launched in the United States, it has now made its way to Europe and the United Kingdom.
What exactly TicketMasters’s artificial intelligence is examining is unclear, and every sale will have its own conditions but it is likely that it could include social media feeds and past ticketing purchase history with TicketMaster. Apart from the General Data Protection Regulation (GDPR) issues around consent and transparency amongst other issues that will need to be addressed, there is also the question of whether the underlying premise, the idea that a "true fan" can be identified, is valid. This raises interesting sociological questions about perceived ideas of "fans" and whether to be a fan one must identify oneself as such in the public sphere.
Sceptics might ask whether the Verified Fan concept is merely another way to get fans to part with their data in return for the chance of being selected to be the recipient of a unique code and a further chance to buy a ticket. TicketMaster’s FAQs make it clear that not every registrant will get a code, and that not every recipient of a code will get a presale ticket as both codes and presale tickets are limited.20
Verified Fan has been used by the Broncos in the United States to sell tickets to single Bronco games but overall appears to lack the widespread take-up in sports it has achieved in entertainment. Perhaps this is because sporting organisations have already adopted strategies that allow them to identify and offer ticketing to those who wish to identify themselves as fans.
On a global scale, for example, the Rugby World Cup 2019 offers those who registered for the front row, early access to tickets. On a national level, Australian cricket has the Australian Cricket Family, which is a free membership that allows access to tickets for a game ahead of tickets going onsale to the general public. Similarly, the Australian Rugby Union also offers those who Register to its website the opportunity to be involved in a presale for events such as the Bledisloe Cup.
While musician Taylor Swift recently offered a points system, via Verified Fan, providing those fans who purchase merchandise or watch her videos the opportunity to push themselves towards the front of the queue,21 individual sporting clubs have offered loyal fans early access to presales for some time.
As an example, Arsenal often employs a strategy for particular away games where there are a series of booking windows. These open first to those fans with a certain number of away points, then those who have gold or platinum memberships, then silver membership and then red membership. Arsenal is using the information it holds on those members’ loyalty – as evidenced by away attendance, season ticket ownership and financial expenditure – to segment those customers and offer them different windows to purchase.
Given that sporting clubs have been adopting such segmenting strategies for some time, and probably have a closer relationship with their customers than individual artists, it will be interesting to see how much of an impact Verified Fan makes on the sporting arena, or whether it remains primarily a mechanism for entertainment.
Ticketing on the blockchain?
Finally, the use of the blockchain to tackle the hard issues of ticket resale is touted by many. The Aventus Protocol22, for example, claims that it can make ticketing processes more transparent and efficient throughout the value chain, from artist or club to purchaser of the initial ticket to purchaser of the resold ticket. Another player in this space is BiTTicket, which has been providing ticket services to a number of entertainment events, notably festivals.
In the sporting arena, UEFA has been trialling the use of blockchain type technologies and, in August this year, all general admission tickets for the UEFA Super Cup between Real Madrid and Atletico Madrid were delivered via a blockchain solution whereby customers utilised android or apple apps on their mobile phone.23 UEFA has indicated it intends to improve and refine the system further for use at future events but has yet to name the provider with which it is working.
Where UEFA leads other sporting organisations and events are likely to follow, and it is likely that the rollout of blockchain-based solutions will become more common in sporting events, particularly as smart phone ownership continues to rise. As indicated above, however, sporting organisations that adopt such methods need to be alive to the issues of inadvertent exclusion and the more practical issues arising from the use of all ticketing on mobile phones.
The other new technology that is touted as the way to address ticketing issues is facial recognition. Live Nation and TicketMaster have invested in Blink Identity24, a facial recognition startup that is aimed at ticketing situations. Of course, utilising facial recognition for ticketing purposes is only one of the possibilities of facial recognition in a sporting context. Providers of facial recognition technology also argue that the technology can be used for multiple purposes, to identify VIP fans and prioritise service to them, to identify banned fans or known troublemakers and to identify people transmitting live sports betting data internationally. In the context of the United States, Richard L Brand and Eva Pullham’s LawInSport article: Faces in the Crowd: legal considerations for use of facial recognition technology at sports arenas25, explores some of the key legal considerations in the United States.
The exploration of the issues arising from such technology and the various purposes for which it might be used in the context of GDPR is beyond the scope of this article, but there are clearly a myriad of issues that would need to be addressed.
Ticketing issues and how to deal with problems arising from resale of tickets will remain an issue for event organisers in the future. Whilst technological solutions may be touted as a way forward, organisers need to think broadly about issues arising from their adoption.
These issues are not only legal such as privacy issues but are broader such as potential social exclusion issues from the adoption of certain mechanisms and also infrastructure and security issues. Event organisers would also do well to remember that the introduction of new technologies such as blockchain, facial recognition or mobile only ticketing may face objections from groups of fans, even if legally all privacy issues are resolved.
The introduction of these types of technologies should therefore be broadly discussed with fan representatives and carefully trialled in a range of circumstances and there will need to be an extensive information and transparency campaign about any changes to ticketing policies to avoid things going wrong with the inevitable backlash that was seen in the Bronco’s example.
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- Tags: Advertising Standards Authority | Commercial | Competition and Markets Authority | GDPR | National Trading Standards | Ticketing | United Kingdom (UK)
- Ticket fraud: A review of the UK’s legislative developments to regulate the secondary ticket market
- Faces in the crowd: legal considerations for use of facial recognition technology at sports arenas