The on-going fight against Ticket Touting
Published 10 July 2014
By: Louise Millington-Roberts
Louise Millington-Roberts, Sport, Media & Entertainment Partner at Hill Dickinson LLP considers whether the most recent recommendations by the All Party Parliamentary Group on Ticket Abuse go far enough to tackle ticket touting.
The impact of ticket abuse on consumers and the live event industry is once again in the media spotlight. Recent actions taken by police in Brazil have seen a number of ticket touts arrested (ticket touts being those people engaged in one of the various forms of ticket offences). These include ticket touts from the UK, one of which was caught allegedly selling 59 counterfeit tickets1
. A further 11 touts from an international ring have also been arrested and have reportedly been involved
in a £60 million per tournament scheme, which could have been operating for 4 World Cups.2
In the UK, the resale of tickets for a profit in breach of conditions (“Ticket Touting
”) has historically been left to the event organiser to tackle, as successive governments have favoured self-regulation; however since Operation Podium concluded that the ticketing industry cannot continue to regulate itself3
, this has reignited the debate within the event industry and Parliament. Indeed an All Party Parliamentary Group (“APPG
”) on Ticket Abuse recently published its recommendations4
in an attempt to put forward solutions to the problem of Ticket Touting, however these arguably do not go far enough.
Is Ticket Touting unlawful?
In the UK, it is not illegal to resell tickets for events (other than football, under section 166 of the Criminal Justice and Public Order Act 19945
) unless the ticket is covered by specific legislation as seen implemented for the recent summer Olympic Games (section 31 of the London Olympic and Paralympic Games Act 20066
) and Commonwealth Games (section 17 of the Glasgow Commonwealth Games Act 20087
). It is however possible for an event organiser to bring civil proceedings against a Ticket Tout for breach of contract, but only if a ticket is transferred or advertised or sold, including being sold at above face value in breach of the event ticket terms and conditions (‘T&Cs’). If an event organiser wishes to bring such action then the T&Cs must be properly drafted and incorporated into a contract, and it must have the resources and appetite to monitor and act upon abuse.
How event organisers are currently combating ticket touting
Putting in place enforceable T&Cs is fundamental in the fight against Ticket Touting. Measures that have followed include the operation of anti-tout squads during an event and fully integrated ticketing systems that allow identity checks to be made on ticket applicants, purchasers and entrants. Some event organisers even include photographs on tickets. The aim of these measures is to deter and prevent Ticket Touting, however as the media has reported8, the secondary ticket market is worth up to £1 billion a year, with ticket fraud estimated to make organised criminal networks £40million a year9 and therefore it is a major challenge for event organisers to police.
Event organisers have historically used various methods to tackle Ticket Touting once a tout has been identified as having breached T&Cs, including bringing disciplinary and/or legal action. For example, it is possible when taking legal action to obtain signed undertakings, an account of profits and/or a permanent injunction, the latter of which may also prohibit a tout from coming within 200 yards of an event. It is also now possible for an event organiser to discover the identity of wrongdoers who anonymously sell tickets via ticket exchanges in breach of T&Cs by applying for Norwich Pharmacal relief
The source of tickets and confusion in the marketplace
The most common sources of resold tickets are from within the organisation itself, and its event partners, members, promoters and corporate sponsors. There have been numerous examples of this, most recently at the 2014 World Cup with the arrest of a World Cup hospitality executive
An event organiser can only educate and make certain that the contractual arrangements with all parties are watertight; this may include contractually agreed sanctions in the event of violation of resale regulations, which may prevent the initial transfer taking place.
Despite prohibition on resale, transfers do ultimately take place in breach of T&Cs, due to the significant financial gain that can be made. Online ticket exchange websites now provide a vast international market place for unauthorised activity. Large numbers of tickets are routinely diverted straight onto secondary ticket exchanges, and in many cases tickets are advertised for sale before an event organiser has even distributed tickets or confirmed the date the event will take place. Many websites, including a secondary ticket exchange website that has been blocked in Brazil
for advertising World Cup tickets for sale12
, are still advertising tickets for sale.
Further confusion arises for the consumer from the number of event organisers who have entered into contractual arrangements with secondary ticket exchanges that now allow the exchange to legitimately facilitate the advertising and resale of tickets. Despite the resale of football tickets by an unauthorised source being illegal in the UK13, many football clubs have contracted with online ticket exchange websites to effectively legitimatise Ticket Touting.
Such contractual arrangements have had serious implications for supporters as the ticket exchange actively encourages listing of tickets at prices well in excess of face value. Tickets are also now available to be purchased by anyone, not just season ticket holders, which in the case of football may have serious crowd control implications. There is also no way to prohibit the “flipping” of tickets, where tickets are bought via the exchange and resold again almost immediately for a higher price.
The consumer is also confused by the number of sources that imply or state that they are “official” sellers of tickets, and hospitality that includes tickets, when in almost all cases the sources are unauthorised. Every year event organisers are faced with complaints from purchasers where the sources don’t actually possess any tickets that they can legitimately advertise and sell, and where a purchaser is actually furnished with a ticket it later transpires that it is counterfeit or non-transferable. In many cases purchasers are also deceived into buying a ticket that doesn’t even exist.
Is outlawing or regulating ticket touting the answer?
The Operation Podium Report on Ticket Crime
recommended the passing of legislation to govern the unauthorised sale of event tickets, and the regulation of the primary and secondary ticket market.14
Despite many event organisers’ prohibiting the transfer of tickets altogether, legislating to outlaw the resale of tickets is not even a consideration for the APPG on Ticket Abuse
. This may appear to be the obvious solution to the problem; however, despite section 166, football tickets are still traded by street touts, via unauthorised and now increasingly authorised online sources. Very little appears to be done by the Police to enforce the legislation, unless an event organiser decides to insist this be done prior to and during the event.
The APPG Report on Ticket Abuse
The APPG on Ticket Abuse
recommends the regulation of Ticket Touting by making amendments to the Consumer Rights Bill
To be effective, the legislation would have to apply to all Ticket Touting, whether on the street or online. The recommendations include ensuring that all information about a ticket sold on a secondary platform be available to a consumer. The reality is that a great number of tickets are being resold in breach of T&Cs and this is why this information is deliberately not available, because it may then be possible for an event organiser to identify a ticket advertised for sale, in breach of its T&Cs, and cancel the ticket (if of course the details inputted were correct). Another recommendation is that secondary platforms should make clear where tickets are being resold in contravention of T&Cs, effectively legitimising the actions of the platforms that are facilitating the breach.
Ticket resellers must already display their compulsory charges upfront, this is a requirement of the Consumer Protection from Unfair Trading Regulations 200816
, yet this is one of the recommendations made in the report that all applicable fees are included in the first price shown for the ticket. Resellers do not always do this, and no action appears to be taken against them. At present the fee a reseller can charge is not restricted, and arguably this restriction or cap should have been included as a recommendation in the report.17
Another recommendation is for secondary ticketing platforms to establish the authenticity of tickets where a ticket tout sells more than 20 tickets for an event. In reality platforms thrive on the business of “power sellers” who may rarely be involved in the sale of counterfeit tickets but are heavily involved in the reselling of tickets in breach of T&Cs. If a ticket tout wants to sell counterfeit tickets, they will often hide their identity, and even if the tickets are established to be counterfeit the tout may not be traceable if the identity of the seller has not been sufficiently established.
It is abundantly clear to the author that regulating the secondary ticket market is fundamental to stopping ticket crime and abuse. One of the ways to protect consumers from unscrupulous sellers and ticket fraud is to regulate ticket resale by capping the resale price of tickets to no more than 10% above face value. This capped resale price would include all fees that may be charged on top of the ticket price, including postage. A cap alone however would not go far enough, as the resale of tickets must also be completely transparent to help fight ticket fraud. It is therefore also necessary for the seller to be genuinely traceable. In the case of ticket reselling and exchange platforms, technology should be utilised to guarantee that sellers are not able to input fraudulent details. It should also be a requirement for all adverts of tickets to include ticket reference numbers, bar codes, seat details (where these apply). Probably most importantly an event should not be advertised and tickets listed for sale if an event ticket has not yet gone on sale, the seller is not in possession of the ticket to sell and it would be in breach of event T&Cs.
If the resale of tickets in breach of T&Cs is not outlawed, then the ticket market must be regulated as far as is possible. It is clear that the extent to which secondary platforms are genuine fan-to-fan exchanges is questionable (as was seen in the Dispatches Television programme18) which causes much confusion to the consumer. Capping the resale price of a ticket may ultimately price Ticket Touts and fraudsters out of the market. However, regulation should go as far as is possible to protect the consumer from fraud and the platforms for resale should be made accountable by putting specific protective measures in place.
Technology is available to assist with this process. We may even see a surge of event organisers establish their own ticket exchange websites, not only will this ensure that tickets are resold in accordance with their T&Cs, and guarantee that grass roots benefit financially from resale but this will greatly assist the confused consumer. A secure, monitored exchange for verified sellers and buyers would most certainly be welcomed by the majority in the industry.
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Louise has extensive experience working with major brands in the field of sport, media, commercial and intellectual property law, providing practical commercial advice on specialist legal matters including rights and brand protection, the commercialisation of brand, sponsorship, endorsement, and event management.