Internet sales prompt move to ease scalping restrictions

Updated: May 31, 2007, 9:21 AM ET
Associated Press

NEW YORK -- The days of seeking out ticket-scalpers in the shadows, ducking into alleys and dodging police for that elusive Yankees-Red Sox seat are fading fast.

New York is poised this week to become the latest state to ease or eliminate decades-old restrictions on scalping.

For the first time, it would become entirely legal in the state for average fans to scalp their seats on the Internet. And, for better or worse, they could sell those tickets at what ever price the market is willing to bear.

The state assembly approved the changes Tuesday. The Senate is expected to follow suit, and Gov. Eliot Spitzer could sign the measure by Friday, when the state's old anti-scalping law expires.

"If you have something to sell, you should be able to sell it for what it is truly worth," said Sean Pate, spokesman for the online ticket broker StubHub Inc., which lobbied hard for the change.

Some old regulations would stay in place. Scalpers would still be banned from selling tickets within 1,500 feet of large arenas, like Madison Square Garden and Yankee Stadium, and within 500 feet of smaller venues.

Large-volume brokers would still need to get a license, too.

It's those brokers who have Russ Haven of the New York Public Interest Research Group worried. Haven argues that lifting the price caps will only prompt greedy opportunists to snap up every available seat, and then jack up prices.

"I think this is a bum deal for consumers," Haven said. "As it is, seats to popular events are often selling for 10 times their face price."

"It may be that there will be some portion of tickets that go for less than face value, but that's not what they're all banking on," he said of the brokers and ticket agencies pushing for change.

Other states have also reconsidered anti-scalping laws.

Minnesota tossed its old anti-scalping laws this spring. The state previously allowed tickets to be resold only at face value.

A bill that would ease Missouri's ban on selling tickets to sporting events at more than face value passed the legislature and is now before the governor.

Illinois and Florida also recently did away with old anti-scalping rules, and bills to ease restrictions are under discussion in Massachusetts and Connecticut.

The shift has been propelled in part by the explosion of Internet ticket sales that has made it nearly impossible for states to enforce price caps. New York's old rule limiting a seller's profits to no more than 45 percent over face value has been widely ignored online.

But perhaps the biggest change was a switch in business strategy by some of the sports and entertainment companies that previously fought scalping the hardest: Realizing that a multibillion-dollar market was being left untapped, a growing number of teams and theaters have been entering the secondary ticket market themselves.

The NCAA signed a deal last year to resell tournament tickets through RazorGator.com. The NBA and some NFL teams have made Ticketmaster their official reseller under an agreement that gives teams a percentage of the profit when a seat is resold.

"There is obviously a business opportunity here for us," said Ticketmaster vice president Joseph Freeman.

Yet to be seen is how much control sports teams, theaters and concert halls will retain over the tickets being resold. Some have pushed for legislation that would limit reselling to venue-approved brokerages, in part to cut down on the possibility of fraud.

Both the New York Yankees and their archrival Boston Red Sox recently made a practice of cracking down on season ticket holders caught selling their unwanted seats on the Internet, in violation of team policy.

New York's new rules, if signed in their current form, would actually ban New York sports teams from taking such punitive action.

"My feeling is, if I have a ticket, and I can't go to a ballgame, I should certainly have a right to give it to my brother or my cousin -- and if they want to pay me for it, why should I have to go through the Yankees to do it?" state Sen. Dean G. Skelos said.


Copyright 2007 by The Associated Press