Ticket Resale Business is 'Fixed Game,' Says NY Attorney General

Announcing he "regularly receives complaints from New Yorkers frustrated by their inability to purchase tickets to concerts," Eric Schneiderman, the state's attorney general, launched a scathing report Thursday, ripping the ticket-resale business as a "fixed game." One broker, the report says, bought 1,012 tickets on December 14th, 2014, to a U2 performance at Madison Square Garden, even though the vendor had posted a four-ticket limit; within a day, that broker and a colleague had racked up more than 15,000 tickets to the band's shows.

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The 43-page report pinpoints several shady practices in the ticketing business: Brokers' high-tech "bots" buy tens of thousands of tickets per year illegally, then mark up prices by an average of 49 percent, and as much as 7,000 percent, for resale on websites such as StubHub and eBay; artists, promoters and venues hold thousands of tickets, or an average of 46 percent per show, for "industry insiders" before they go on sale; and "convenience fees," like those levied by Ticketmaster and other ticket-selling outlets, average 21 percent of the tickets' face value, sometimes reaching "outlandish levels."

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"The revelation that the concert and sport ticket industry is unfair is nothing new, however, discovering how deep it goes is certainly unsettling," Jeffrey Dinowitz, a New York assemblyman, said in a statement released by Schneiderman's office. "This unscrupulous system is detrimental to the thousands of fans out there who are just trying to see their favorite show or sports team."

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The report doesn't so much reveal surprising new information as legitimize rants that fans, and even touring stars, have made for decades. "The greatest evil that theatergoers in this city have to contend with is the ticket speculator," a New York magistrate wrote in 1901, according to the report. "They are practically highwaymen and hold up everybody that goes to a place of amusement."

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In the StubHub era, Adele's team recently battled scalpers by going through lists of ticket sales and refunding purchases that appeared to be from resellers; AC/DC, Tom Waits and Metallica are among the artists who've switched to a "paperless" system requiring buyers to show credit cards and ID to get into shows.

But, according to the report, many artists and their reps are part of the problem. "Insiders" received 28 percent of the tickets for two separate 2012 Justin Bieber shows at Madison Square Garden and 29 percent for a 2013 Kanye West show at Barclays Center. Also, 38 percent of available tickets were held for "pre-sales," usually through credit-card-company promotions by American Express, Citibank and others; Fleetwood Mac held back 61 percent of tickets for a 2013 MSG show this way, as did Jay Z and Justin Timberlake with 71 percent of tickets for a 2013 concert at Yankee Stadium. "Holds and pre-sales can leave few tickets for the public," the report concludes.

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The report's most shocking revelations deal with bots, or software used to overcome the typed "captcha" words on ticketmaster.com and other sales sites, allowing brokers to illegally buy multiple tickets to the same shows. A "young software developer," working with a broker that made $42 million in 2013 selling $31 million in tickets on StubHub, used an optical-character-recognition program to purchase hundreds of thousands of tickets. This developer then bought a $4 million home and a "Bentley luxury vehicle."

Scalpers use lower-tech means to purchase numerous tickets as well; one used 149 different American Express cards to buy 38,000 tickets at a cost of $13 million from 2013 to 2015. Schneiderman recommended companies such as StubHub and Ticketmaster-owned TicketsNow police their sales to prevent these kinds of illegal purchases, but also recommended restrictive new state laws.

"In many cases, industry players do not have an incentive to reform," the report concludes. "To ensure that the steps described above are implemented in a meaningful and lasting way, the legislature should mandate them."