DECISION REGULATION IMPACT STATEMENT
TICKET RESELLING IN AUSTRALIA
2018
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CONTENTS
GLOSSARY OF TERMS ....................................................................................................................4
EXECUTIVE SUMMARY...................................................................................................................1
1. THE PROBLEM ..........................................................................................................................5
The Market for Tickets ........................................................................................................................5
Characteristics of the primary ticket market contribute to the existence of the
secondary market ..........................................................................................................................9
Consumers lack the information required to make informed purchasing decisions........................13
Consumers can have their welfare reduced by ticket scalping practices .........................................18
Consumers risk their tickets potentially being cancelled..................................................................21
Consumers risk potential scams and frauds .....................................................................................23
Ticket-buying bots reduce consumers’ fair access to tickets............................................................24
Other Issues.......................................................................................................................................25
Conclusions .......................................................................................................................................27
2. POLICY OBJECTIVES.................................................................................................................29
3. POLICY OPTIONS AND IMPACT ANALYSIS ................................................................................31
Option 1: Status Quo, with Consumer Education .............................................................................32
Option 2: National Prohibition on Ticket Reselling ...........................................................................45
Option 3: Restricted Reselling...........................................................................................................50
Option 4: Improved Disclosure Arrangements for Ticket Resellers (PREFERRED
OPTION)........................................................................................................................................60
Option 5: National Ban on Use of Ticket-Buying Bots......................................................................68
4. CONSULTATION......................................................................................................................73
5. CONCLUSION..........................................................................................................................77
6. IMPLEMENTATION..................................................................................................................79
7. BIBLIOGRAPHY .......................................................................................................................81
APPENDIX A LIST OF NON-CONFIDENTIAL SUBMISSIONS ..........................................................83
APPENDIX B SAMPLE INTERNET SEARCH RESULTS ....................................................................85
GLOSSARY OF TERMS
ACCC
Australian Competition and Consumer Commission
ACL
Australian Consumer Law
CAANZ
Consumer Affairs Australia and New Zealand
CAF
Legislative and Governance Forum on Consumer Affairs
COAG
Council of Australian Governments
LPA
Live Performance Australia
RIS
Regulation Impact Statement
EXECUTIVE SUMMARY
In Australia, the live performance and sporting event industries make up an important part of the
economy. According to Live Performance Australia (LPA), the peak body for the live performance
industry, an estimated total of 18.78 million tickets to live performances (excluding sporting events)
were sold in 2016, equating to a value of $1.43 billion (Live Performance Australia, 2017a). According
to data collected by AusStadiums, attendance at live sporting events in Australia in 2016 was around
17.3 million.
The market for tickets in Australia is large and consists of the primary ticket market where tickets are
first sold by an official ticket seller and the secondary market where tickets are resold. The secondary
market for tickets can be divided into two main market segments: the ticket scalping market and the
ticket onselling market. There are important differences between the ticket scalping and ticket
onselling segments of the market. Generally, ticket scalpers sell tickets at an elevated price with the
objective of making a profit, while ticket onsellers sell tickets that they are no longer able to use at
their face value with the objective of recovering their costs and ensuring that purchased tickets are
not wasted. The latter is often thought of as a more legitimate practice than the former.
While the secondary market for tickets provides opportunities for people to recover the full or part
of the cost of tickets they can no longer use and allows another party to benefit from the unused
ticket, the secondary market also creates opportunities for consumers to be exploited when they do
not have enough information to make informed purchasing decisions. Consumers who purchase
tickets through ticket resale websites in the secondary market may not be aware that they are
buying those tickets from unauthorised sellers for prices generally above the original face value of
the ticket. Ticket resale websites can look and feel like official ticket seller websites, misleading
consumers into thinking that they are buying their tickets through official channels. In addition, most
resale websites do not disclose important information that can assist consumers in making informed
purchasing decisions, such as the face value of the ticket being sold and the location of the ticket in
the venue. Until recently, most resale websites did not disclose that they are resale websites rather
than the primary ticket seller.
Further, there is evidence that the use of ticket-buying bot software is being employed by ticket
scalpers. The software can infiltrate ticket selling systems to purchase large volumes of tickets at high
speed for the purpose of selling them on the secondary market at inflated prices. The use of this
software creates an unfair advantage to ticket scalpers over legitimate consumers seeking tickets,
eroding fair access.
Broadly, ticket reselling and ticket scalping is not illegal in Australia. In some States and Territories,
ticket reselling and ticket scalping are primarily regulated under ‘major events’ legislation that
restricts, or prohibits, ticket reselling or scalping in that State or Territory. The relevant enforcement
bodies include, for example, police officers in Victoria and in Queensland.
The Australian Consumer Law (ACL) and the safety net of generic consumer protections that it
provides, together with existing State and Territory laws, provide a level of coverage to address
issues associated with ticket reselling and ticket scalping in the secondary market. The ACL contains a
number of different existing provisions that can be used to address issues associated with ticket
reselling and ticket scalping. These include provisions that prohibit misleading and deceptive
conduct, false and misleading representations, unconscionable conduct, bait advertising and wrongly
accepting payment. The consumer guarantees regime can also provide consumers with remedies in
relation to resold tickets. In addition, some States and Territories also have in place ‘major events’
legislation to restrict or prohibit ticket resale and prevent ticket scalping.
The use of ticket-buying bots is not illegal in Australia, with the exception of a ban in New South
Wales which commenced on 1 June 2018.
While these existing laws provide a level of coverage to address issues associated with ticket
reselling, their effectiveness depends on consumers understanding their rights under the ACL (and
other legislation) and being able to take action when they believe those rights have been breached.
There is scope for the Government to take action to improve the operation and efficiency of the
secondary market to ensure that consumers can make more informed purchasing decisions as well as
having fairer access to tickets.
The policy options analysed in this RIS are:
Option 1 Status quo, with consumer education
Option 2 National prohibition on ticket reselling
Option 3 Restricted reselling
Option 4 Improved information disclosure arrangements for ticket resellers
Option 5 National ban on the use of ticket-buying bot software
A Consultation Regulation Impact Statement (C-RIS) was released for public consultation on
17 November 2017. Consultation closed on 15 December 2017. The C-RIS identified the problems
that exist with the secondary ticket market and presented five options to address these problems
with the policy objective of reducing consumer detriment.
Treasury, on behalf of Consumer Affairs Australia and New Zealand (CAANZ), conducted face to face
consultations with key stakeholders in Melbourne (22-23 November 2017) and Sydney (1-
2 December 2017). Treasury received 16 formal submissions to the consultation process and 377
informal consumer comments.
The key findings from the consultation process were:
strong support for the continued existence of the secondary ticket market;
strong support for stronger enforcement of the ACL;
strong support for a national approach to ticket reselling;
strong support for a consumer education campaign;
some support for a cap on the price of tickets and strong support for information
disclosure; and
strong support for a ban on ticket-buying bots.
This RIS presents a baseline analysis of the qualitative costs and benefits of the five policy options,
and includes a quantitative estimation of the regulatory compliance costs as set out in the Regulatory
Burden Measurement Framework.
Improved disclosure arrangements for ticket resellers (Option 4) is the preferred policy option. This
option provides the greatest net benefits to consumers, based on a qualitative assessment of the
costs and benefits. It also represents an acceptable level of compliance cost to business when
evaluated alongside this qualitative net benefit.
Improved information disclosure will address the information asymmetries that have been identified
in the secondary ticket reselling market and ensure that consumers have access to the information
that they require to make more informed consumption choices. This policy option would also ensure
that consumers continue to have access to a range of ticket purchasing options and avenues to suit
their wants and needs; that consumers who wish to resell their tickets for reasons other than profit
are able to continue to resell their tickets; and that the market for tickets operates efficiently.
Further, this policy option will not risk the creation of a black market for resold tickets. This option is
a light touch, low-cost regulatory response and is similar to disclosure regimes in other international
jurisdictions.
A national ban on the use of ticket-buying bots is likely to reduce bot activity and give consumers
fairer access to tickets. Further work will be required to develop an enforcement and penalty regime
for the ban.
Detailed analysis of the costs and benefits of each option are outlined in Chapter 3.
1. THE PROBLEM
SUMMARY
The market for tickets to live performance and sporting events in Australia is large. The market for
tickets consists of a primary ticket market where tickets are first sold and purchased, and a secondary
ticket market where tickets are onsold or scalped.
Ticket reselling practices can cause a number of consumer harms including consumers being misled
about the tickets they are purchasing due to information asymmetries in the secondary market which
prevent them from making informed purchasing decisions; exposure to the risk of ticket cancellation
because of contraventions of
ticket terms and conditions; and exposure to potential scams and
frauds because unofficial ticket resale websites can provide a platform for deception.
In addition, consumers’ fair access to tickets is being undermined by the use of ticket-buying bots.
THE MARKET FOR TICKETS
In Australia the live performance and sporting event industries make up an important part of the
economy. According to Live Performance Australia (LPA), the peak body for the live performance
industry, an estimated total of 18.78 million tickets to live performances (excluding sporting events)
were sold in 2016, equating to a value of $1.43 billion (Live Performance Australia, 2017a). According
to data collected by AusStadiums, crowd attendance at major live sporting events in Australia in 2016
was around 17.3 million.
The market for tickets in Australia consists of the primary ticket market, where tickets are first sold
and purchased, and the secondary ticket market where tickets are onsold or scalped.
Overview of the primary ticket market
There are various participants in the primary ticket market for tickets including artists and
performers, event promoters, venue managers, ticket sellers and consumers. When tickets to events
are first sold, they are sold in the primary ticket market at face value. Face value is the value printed
or depicted on the ticket to indicate its official purchase price. A ticket’s face value is ultimately
determined and set by artists and promoters.
Promoters play an organisational role in the event, coordinating between the artist or performer and
the venue, and contracting with various companies that will help put on the event such as transport
and sound and lighting companies. The promoter also negotiates revenue sharing arrangements
between the artist, the venue, the ticket seller and any other relevant market participants.
In Australia, official ticket selling companies, such as Ticketek and Ticketmaster, negotiate exclusive
ticket selling rights with venues around the country to sell tickets to events held at those venues.
Artists and promoters will negotiate with venues to host events, and the ticket seller that has the
exclusive rights to sell tickets for the particular venue will be the official ticket seller for the event.
Tickets sold by the official ticket seller are sold in the primary ticket market, and the ticket seller will
collect a ticket processing or booking fee.
Overview of the secondary ticket market
In addition to the primary ticket market, a secondary ticket market also exists. When tickets are sold
by anyone other than the official ticket seller, they are sold in the secondary market for tickets.
Consumers value having access to a secondary ticket market for a number of reasons including
convenience, time saving and avoiding ‘the hysteria’ of the ticket sales process (CHOICE, 2017, p. 10).
In addition, the secondary market is also useful for ‘late movers’ who may have reason to delay their
purchasing decisions. More ticket resale options can increase market efficiency because
secondary markets create channels where tickets go to the consumers who value them the most
(Courty, 2003, p. 85).
The secondary ticket market can be divided into two main market segments: the ticket scalping
market and the ticket onselling market. There are important differences between the ticket scalping
and ticket onselling segments of the market. Ticket scalpers sell tickets at an elevated price with the
objective of making a profit, while ticket onsellers sell tickets that they are no longer able to use at
their face value (or below) with the objective of recovering all (or part) of their costs and ensuring
that purchased tickets are not wasted (Sa and Turkay, 2013, p. 628). Ticket scalpers take on a risk if
tickets cannot be onsold or are onsold below the original face value of the ticket.
During the stakeholder consultation process, consumers expressed strong support for the continued
existence of the secondary ticket market, with many consumers indicating that the existence of the
market is important to their interests.
I think it is vital and integral to have the secondary market for tickets open. It is handy
for myself personally, as I have picked up many a bargain, and many a ticket I would
otherwise not have been able to obtain.
Consumer Comment [Mitch Rapp]
Most consumer respondents noted how much they value the secondary ticket market because they
benefit from having options to resell their tickets when they can no longer attend an event.
Ticket reselling has a useful purpose for consumers who find they have tickets but can no
longer attend a concert or other event. If tickets cannot be resold then with ticket prices
so high there could be meaningful financial loss to the individual. The alternative is that
consumers are put off buying in the first place due to the perceived risk of loss. The
potential consequence of this is that fewer tickets can be sold resulting in fewer events
being staged leading to over loss to the general economy.
Consumer Comment [Richard Brooks]
Legitimate tickets resellers such as Ticketmaster Resale are extremely helpful for people
like myself, who on occasion, cannot attend events previously booked. I myself would
have lost over $700 if I had not been able to on sell my tickets. Having a legitimate site,
where tickets are uploaded and barcodes amended was a lifesaver.
Consumer Comment [Anonymous]
Similarly, many consumers indicated that they value the secondary ticket market because it allows
them to delay their purchasing decisions, as well as allowing them to obtain tickets to events that are
sold out.
Tickets for highly popular events are sold out well in advance, regardless of the
secondary ticket market. Unfortunately, I cannot always know in advance which events I
will be able to, or would like to, attend. Without secondary ticket sellers, I have no real
way of attending those events if and when I decide to attend; finding individuals who, for
whatever reason, no longer want their ticket and are willing to sell it, involves wading
into the scam laden world of Gumtree and Craigslist.
Consumer Comment [Sam Loeb]
As a member of the public who has used an official ticket reseller outlet, I think having a
secure and official forum to resell tickets is a good idea. It gives security to the purchase
as you know that it will be a valid and read ticket.
Consumer Comment [Anonymous]
Ticket Scalping
Ticket scalping is the unauthorised reselling of tickets to entertainment and sporting events, at a
price higher than the ticket’s original face value. Ticket scalpers purchase tickets in the primary ticket
market with the deliberate intention of making a profit (Senate Economics References Committee,
2014, p.1). Ticket scalpers may charge different elevated prices for each individual seat depending on
its desirability in the venue (Courty, 2003, p. 88). Ticket scalpers exploit the consumers’ willingness to
pay, and those consumers who are not willing to pay a premium may miss out on the most attractive
tickets. Ticket scalping is often seen as deceptive, unfair and unethical (Griggs, 2006, p. 291).
Generally, in order for ticket scalpers to make a profit, the official ticket seller must not have any
tickets to sell at the same time in the primary ticket market (that is, the event must be sold out). The
ticket scalper can make a profit when demand exceeds the available (inelastic) supply, profiting from
the residual scarcity of the product. However, ticket scalpers can also make a profit if the
specific/preferred tickets that consumers desire are no longer available in the primary market, such
as front row tickets or tickets in sections with better views. Further, ticket scalpers can also make a
profit when consumers are not aware that there are still tickets available in the primary ticket
market; otherwise buyers would just make their ticket purchase through that market.
The stakeholder consultation process found that the majority of shows in Australia do not sell out in
the primary market. Promoter and primary ticket seller estimates of the percentage of sell out shows
in Australia varied widely between 5 per cent and 35 per cent of shows. One stakeholder noted:
The hard truth, is that very few events in Australia sell out. There are only a handful of
shows where demand vastly exceeds supply. For those events, it is understandable that
fans are frustrated they were not able to buy tickets when they go on sale, but such
events are the exception, not the rule.
Confidential Submission
Further, those shows that do sell out typically do not sell out until a few days before the event. One
promoter estimated that while only a small percentage of shows sell out, the majority of shows do
sell more than 75 per cent of tickets. Therefore, given that shows in Australia are generally not sell-
outs but are still quite popular, the profitability of scalping behaviour in the secondary ticket market
generally appears to be driven by the supply of specific/preferred tickets and a lack of consumer
awareness of the availability of tickets remaining available in the primary market.
Ticket scalping practices fall into two main categories. First, traditional or in-person ticket scalping
and second, modern or online ticket scalping. Traditional scalping practices generally see ticket
scalpers selling tickets in the secondary ticket market by standing outside event venues on the day of
the event. Tickets scalped outside events are generally done so for cash payment. Modern scalping
practices generally see ticket scalpers selling tickets in the secondary ticket market online where they
are able to reach a wider audience of people. Modern scalping techniques rely heavily on virtual
markets and online trading platforms. Online ticket reselling platforms have become increasingly
prevalent in recent years, as they are generally cheap to establish and are associated with reduced
transaction costs (Sá and Turkay, 2013, p. 628). eBay noted that:
The secondary market has always existed. The internet has made it more visible, safe
and competitive which helps drive down costs.
eBay | StubHub | Gumtree Submission
The increasing prevalence of online ticket selling platforms has made it difficult to contain the
activities of ticket scalpers (Senate Economics References Committee, 2014, p. 8). The stakeholder
consultation process found that promoters and primary ticket sellers believe that ticket reselling has
grown exponentially in the last five years. Live Performance Australia noted that:
Feedback we receive from our Members is that ticket reselling/scalping is a major
growing concern. Ticket reselling and scalping affect all types of live events from world
renowned artists performing in stadiums to local acts performing in regional venues.
Live Performance Australia Submission
Buying a ticket from a ticket scalper, whether in person or online, typically carries with it two main
risks. First, there is a risk that the ticket may not be genuine or may not be provided at all.
Second, there is a risk that the ticket may be cancelled by the event organiser, as many tickets carry
conditions that restrict resale or transfer. However, it is often difficult for ticket sellers in the primary
ticket market to identify tickets that have been resold.
In Australia, the major ticket selling platforms used by ticket scalpers include Viagogo,
TicketmasterResale, eBay and Gumtree (Senate Economics References Committee, 2014, p. 8). While
ticket scalping often makes headlines in the media, especially in relation to big name and popular
events, there is no clear data on how many tickets are scalped each year in Australia.
Ticket Onselling
Ticket onselling is the selling of tickets, usually at their face value, that are no longer able to be used
by the original purchaser. The reasons for onselling tickets are varied and include circumstances
where consumers can no longer attend an event due to unexpected work or family commitments,
illness, or their favourite team or artist is no longer playing in the event. The secondary ticket market
provides the opportunity for people to recover, in full or in part, the cost of their ticket and allows
another party to benefit from the unused ticket (Senate Economics References Committee, 2014, p.
7). As noted, consumers have indicated that they value having access to a secondary ticket market to
buy and sell unwanted tickets.
The ability to continue to resell tickets is critical to this industry circumstances change
and purchasers may no longer be able to attend. Further, people who were unavailable
to make a purchase when the tickets originally went on sale have the opportunity to do
so.
Consumer Comment [Anonymous]
Ticket onsellers use websites to resell their tickets to those willing to buy them. Sellers use online
reselling platforms to connect with buyers, but the delivery of tickets is generally conducted
exclusively between the seller and buyer, with the seller usually sending the ticket directly to the
buyer (Schroeder et al, 2012, p. 26).
In Australia, the major ticket onselling websites are Viagogo, TicketmasterResale, StubHub (owned by
eBay), Twickets and Gumtree (owned by eBay).
CHARACTERISTICS OF THE PRIMARY TICKET MARKET
CONTRIBUTE TO THE EXISTENCE OF THE SECONDARY
MARKET
There are characteristics inherent in the primary ticket market for tickets that contribute to the
existence of a secondary ticket selling or resale market, including:
a perfectly inelastic supply of tickets coupled with circumstances where demand for tickets can
exceed supply for popular events;
ticket resellers having early or priority access to tickets through pre-sales and the like (ticket
allocation and availability);
ticket underpricing that creates opportunities for profits to be made by reselling tickets; and
a lack of variation of prices between tickets based on quality, which provides opportunities for
tickets to be resold at different prices based on the differences in quality.
Perfectly Inelastic Supply for Tickets
The supply of tickets for shows and events has an important impact on the price of tickets in the
primary and secondary markets. The supply of tickets depends on a number of factors, including the
capacity of a venue and the number of shows that will be held.
Generally, ticket markets have a perfectly inelastic supply in the short run. A perfectly inelastic supply
occurs when a change in the price of a good or service has no effect on the quantity supplied. Usually
if the price of a good increases, a firm would like to supply more of the good or service. However, in
the case of tickets, given entertainment and sporting venues have a restricted physical capacity,
there is generally a restricted or finite supply of tickets and little capacity to increase ticket supply.
When supply is perfectly inelastic and sufficient demand for tickets exists, ticket sellers and
importantly ticket resellers, can increase ticket prices resulting in consumers having to pay more for
tickets.
The issue of perfectly inelastic or finite supply of tickets is more serious for events that are strictly
‘one show only’, like sporting events such as grand finals, because the match can only be played
once, and therefore there is a finite supply of tickets based on capacity at the event. This finite
supply of tickets, coupled with the demand for the event, can make those tickets more valuable.
Conversely, for events where there are multiple shows or viewings, such as a music concert or
theatre production, the supply of tickets becomes less inelastic over time. The less inelastic the
supply of tickets over time, the less impact on price.
Artists and promoters are sometimes accused of creating artificial scarcity for events in an attempt to
build hype or interest in an event. This artificial scarcity can affect the demand for events and the
price of tickets. Consumer advocacy group CHOICE, in its report, Sold Out: Consumers and the Ticket
Resale Industry, found that:
‘Currently industry practice (for many music concerts and other touring events) is to
announce one show in each city to build hype and speculation on ticket sales. As a result,
people can end-up buying excessively priced tickets through resale websites before
second and third shows are announced (CHOICE, 2017, p. 9)’.
Through the stakeholder consultation process, promoters and touring companies indicated that it is
generally not the case that artists or promoters hold shows back from announcement to build hype
and speculation on tickets. One stakeholder noted that:
The number of shows in a tour schedule is determined by a number of factors including
the global schedule of the artist, expected consumer demand (based on the popularity of
the artist, their social media reach, success of their past tours), and the size of the
production and required touring resources. Typically, the promoter will contract the
artist for a certain number of shows as such, the promoter bears the risk for the shows
and so it is not in the interests of the promoter to hold back shows.
Confidential Submission
Another stakeholder noted that:
The margins on shows are generally quite narrow and we take on a financial risk on
additional shows that could result in us quickly running into a loss situation if those
shows don’t sell.
Confidential Submission
Ticket Availability and Allocation
Closely related to the supply of tickets is the availability and allocation of tickets to events. The
availability of tickets to events can have an impact on the market for tickets, making ticket scalping
opportunities more attractive and prevalent.
While many consumers may assume that all tickets for an event are available for general or public
sale, this is not always the case. Artists and promoters may establish mechanisms to provide priority
access to tickets for some segments of the market and they can withhold tickets from general sale in
a number of ways. For example, artists can request that bundles of tickets are withheld from general
sale so that these tickets can be sold through their fan clubs, giving fans priority access to some of
the best tickets at the venue. Generally, it does not cost anything to become a member of a fan club,
and therefore almost anyone can sign up to be given access to early releases of tickets, including
potential ticket scalpers.
Further, promoters, ticket sellers and venues can also make deals with artists to withhold certain
bundles of tickets for separate or exclusive sale to their own stakeholders. For example, venues may
have deals with corporate sponsors that allow them to allocate tickets to those sponsors, or
promoters may have deals with credit card companies or hotels to allow early access to tickets as
part of ‘rewards’ schemes and programs (Medhora, 2017). The types of tickets withheld through
these separate mechanisms are generally better tickets, such as front row seats or VIP areas. All of
these schemes that provide priority access to tickets create opportunities for ticket scalpers to gain
access to some of the best tickets before the general public.
The stakeholder consultation process found that it is unclear what percentage of tickets are held
back for priority access and never make it to general public sale, and artists, promoters and ticket
sellers generally do not release this kind of information (Medhora, 2017). The views of stakeholders
on ticket allocation and availability varied. Some stakeholders indicated that the vast majority of
tickets did make it to general public sale. Live Performance Australia indicated that:
Our members indicated that for many shows the majority of tickets (90-95 per cent) go
on sale to the general public. However, there are also shows (particularly ‘hot shows’)
where the proportion of tickets available to the general public is dependent upon the
sponsorship and contracting arrangements with the artist.
Live Performance Australia Submission
Other stakeholders indicated that only a small proportion of tickets make it to general public sale.
eBay noted that the majority of tickets never make it to general public sale, however evidence used
to support this claim was from the United States, and it is unclear if this is also the experience in
Australia:
One of the major reasons fans are having trouble accessing tickets is because large
percentages of tickets never go on sale to the public. Ticket issuers, artists, promoters,
venues and corporate partners frequently hold back large percentages of tickets. And
most fans have no idea that the vast majority of tickets for high-demand event are not
available for purchase on the date of the on-sale.
eBay | StubHub | Gumtree Submission
Given the divergence in stakeholder views in relation to ticket allocation and availability, it cannot be
conclusively determined what proportion of tickets for events in Australia make it to general public
sale.
Ticket Underpricing
Typically, artists, promoters and ticket sellers in the primary ticket market underprice tickets. Tickets
are routinely sold for prices less than the highest price that the market can withstand. Underpricing
leads to the inefficient allocation of tickets in the primary ticket market and creates gains that can be
realised in the secondary market (Leslie and Sorensen, 2009, p. 2). When tickets are sold for less than
the market can bear, excess demand is created, and it is this excess of demand that often supports
the creation of secondary ticket markets (Schroeder et al, 2012, p. 26) (see Box 3).
Artists and promoters can benefit from underpricing tickets and the creation of secondary markets.
In this regard, artists and promoters may be seen as being complicit in encouraging ticket scalping.
Artists and promoters may underprice tickets for a number of reasons:
Sold Out Shows. Underpricing of tickets ensures that more people will demand tickets to an
event, making it more likely for the event to sell out. Selling tickets below the price that would
limit demand to the available supply creates opportunities for ticket scalping behaviour. In
addition, sold out shows enhance the image of artists and promoters (Sa and Turkay, 2013,
p. 629-30). Selling tickets quickly can also generate hype around an event and encourage others
to attend (Medhora, 2017).
Revenues from Complementary Goods. Accessible ticket pricing and sold out shows create
demand for complementary goods that may be sold at events. Demand for complementary goods
such as parking, snacks and beverages, programs and artist merchandise may be an advantageous
trade-off for a ticket price reduction (Sa and Turkay, 2013, p. 230).
Improve Cash Flows, Short Term Liquidity and Shifting Risk. Underpricing tickets can also
improve the short term liquidity of promoters. Early ticket sales can serve as an immediate source
of internal finance. In this regard, promoters may be willing to tolerate scalpers operating in ticket
markets because the purchase of tickets by scalpers improves liquidity and removes the risk for
the promoter that a ticket will not be sold (Sa and Turkay, 2013, p. 231).
Goodwill towards Consumers. Finally, the desire to promote goodwill towards consumers is also
a reason why artists and promoters underprice tickets. Pricing events at an accessible price instils
goodwill for future events that the artist or promoter may hold and improves their reputation
with consumers as an honest seller that is not complicit in gouging consumers (Sa and Turkay,
2013, p. 30).
The stakeholder consultation process found that artists and promoters do underprice tickets in the
primary market. Generally, stakeholders noted that it is not unusual for artists and promoters to
underprice tickets in the interests of balancing a commercial return with affordability to consumers.
Artists and promoters typically take into account expected demand, affordability for individual
events and affordability across a twelve month period (noting that when making purchasing
decisions and assessing their willingness to pay, consumers typically consider their ability to afford a
number of events across a year). One stakeholder noted:
Ticket pricing for high-profile and high-value events is a key part of the strategic
framework for each sport. Often the strategy attempts to find a balance between the
need for a sport to achieve a commercial return on premium content so that it can fund
grassroots participation programs and elite pathways development programs, whilst
ensuring accessibility for fans and members. Prices also need to provide great value for
money and be competitive with other sports and alternate forms of entertainment. Often
this means that a large number of tickets are reserved at an affordable price so that our
premium content remains accessible to fans and members.
In some cases revenue is not the strategic driver for ticket pricing, it is the desire to
maximise the size of the crowd and derive the collateral benefits from a large, passionate
supporter base. Whilst this may not drive a return in terms of ticket revenue, there are
numerous beneficiaries from such a strategy including the state or city, the venue
through increased food and beverage sales, surrounding businesses within a sporting
precinct, merchandise sellers, event sponsors, broadcasters and most importantly
supporters of the game.
Confidential Submission
In addition, a range of other factors can play a role in determining the price of tickets, including
availability of the artist (supply) and anticipated popularity of the event (demand). One stakeholder
noted:
For music events, each event organiser prices their tour based on a multitude of factors
including the wish of the artist and their management, the size and strength of their fan
base where each leg of the tour takes place, whether there is a new album or promotion,
whether this is the last or the first tour.
Confidential Submission
Lack of Variation in Ticket Pricing Across Categories
Typically, when tickets to events are sold in the primary ticket market there is a lack of variation
among ticket prices for different types of tickets. For example, tickets closer to the front of a show
may not be that much more expensive than tickets seated further away from the action.
This lack of variation in ticket pricing across ticket categories creates opportunities for ticket scalpers
to capitalise on the differing inherent values (as opposed to the face value) of tickets by selling more
desirable tickets at a higher price because the willingness of fans to pay is generally higher for these
types of tickets.
CONSUMERS LACK THE INFORMATION REQUIRED TO MAKE
INFORMED PURCHASING DECISIONS
The purchasing of tickets to live performances and sporting events in Australia can be a difficult and
confusing process for some consumers. There can often be a lack of clarity around how and from
whom consumers should purchase their tickets, how many tickets are available to a certain event
and at what price those tickets are available for purchase.
In Australia, there is a range of official ticket selling companies in the primary ticket market including
the most well-known providers, Ticketek, Ticketmaster, MoshTix and OzTix. As noted, these ticket
selling companies typically have exclusive agreements with individual venues. If an event is booked
by a promoter at a particular venue, the ticket seller who has the exclusive ticketing rights to that
venue will be the official ticket seller for that event. In order for the consumer to ensure that they
are purchasing tickets on the primary ticket market at their face value, the consumer needs to know
ahead of the sale who the official ticket seller is for the event. Consumers hear about events in a
variety of ways such as through television and radio advertising, online advertising, direct emails
from artists, fan clubs, promoters and word of mouth from friends and relatives. However, when a
consumer hears about an event, information about the official ticket seller may not be
communicated or may be difficult to find.
It is important to know who the official ticket seller is for an event because it ensures that consumers
can obtain tickets from an official ticket seller that are guaranteed to be valid for entry into the event
(i.e. that the tickets are not fraudulent), that the tickets are sold at their true face value and that the
tickets carry with them the full terms and conditions ascribed to those tickets at the time of their
sale. Unless the consumer knows who the official ticket seller for the event is, there is a risk that they
may unknowingly purchase their ticket from the secondary ticket market. Purchasing tickets from the
secondary ticket market, while convenient for some consumers, can carry with it a number of risks
including the risk that the consumer may unknowingly pay over and above the face value of the
ticket, that the ticket may be cancelled because terms and conditions of the original sale of the ticket
have been breached by the act of the ticket being onsold and the risk that the ticket may be
fraudulent or fake.
It is not always easy to know who the official ticket seller for an event is before a consumer goes to
purchase their tickets. While artists, promoters and venues will generally inform consumers who the
official ticket seller is ahead of the ticket sale (either by providing that information while advertising
the event or by providing direct links to the official ticket seller’s website), consumers may not
remember who the official ticket seller is or they may find out about the event through other
channels where they are not informed and have to find out where to purchase tickets through their
own research. Where a consumer is not aware of the official ticket seller, they may seek out this
information to ensure that they purchase from the official ticket seller, or they may seek their tickets
in other ways. CHOICE found that:
‘Many fans found their tickets through Google, with 66% of case studies saying they
found their tickets through the search engine (CHOICE, 2017, p. 13)’.
If consumers are using internet search engines to find tickets to the events that they wish to attend,
they may be led to ticket resale websites unknowingly. Ticket reselling websites often pay advertising
premiums to internet search engines to ensure that their websites appear at the top of search engine
results. CHOICE notes:
‘If a consumer is unaware of the official primary seller, they can be led to click on the first
result often a paid advertisement for a ticket reseller (CHOICE, 2017, p. 9)’
Treasury, on behalf of Consumer Affairs Australia and New Zealand (CAANZ), undertook sample
ticket searches to test the veracity of the claim that an internet search will lead consumers to non-
official ticket reseller websites ahead of official ticket seller websites. An example of these sample
searches is presented in Box 1.
Treasury undertook internet searches for tickets to 100 different ticketed events being held in
Australia between September 2017 and April 2018. Of the 100 internet searches conducted,
47 per cent of searches resulted in a secondary ticket seller appearing as the top result, while
59 per cent of searches resulted in secondary ticket sellers appearing as the top 5 search results. The
most resulted secondary ticket seller was Viagogo, followed by TicketmasterResale and StubHub. The
majority of the top results from secondary ticket sellers were paid advertisements.
This sample search suggests that consumers who do not know who the primary ticket seller is for an
event, and use an internet search to find a ticket seller, are generally more likely to be directed to a
secondary ticket reseller than the official ticket seller.
The results of this sample search can be found at Appendix B.
BOX 1: INTERNET SEARCHES AND RESULTS
Artist Ed Sheeran toured Australia in March 2018. The official ticket sellers for Ed Sheeran’s shows
are Ticketek (Sydney, Brisbane and Adelaide shows) and Ticketmaster (Perth and Melbourne shows).
Treasury undertook an internet search for ‘ed sheeran tickets’ using the search engine Google.
The first two results of the internet search produced links to secondary ticket resellers, Viagogo and
StubHub, with the official ticket seller not appearing until the third and fourth results.
As noted, purchasing tickets from the secondary market does carry risks. At least until the change
made by Google in February 2018 requiring ticket sellers that purchase Google ‘AdWordsadvertising
space to make certain disclosures, when consumers reached a secondary ticket selling site, there was
often little to signify that the site is not the official ticket seller and is instead a resale site. Ticket
resale websites can look and feel like official ticket seller websites, misleading consumers into
thinking that they are buying their tickets through official channels with all the protections that come
with that purchase. For example, the design of secondary ticket selling websites often use a similar
graphic user interface to official ticket selling websites, characterised by a heavy use of graphics
advertising upcoming and top events, ticket sale countdown timers, venue information pages and
sale screens that mimic the ticket purchase processes on official websites. A comparison of Ticketek’s
(official seller) home screen and Viagogo’s (unofficial reseller) home screen is illustrated in Box 2.
This example shows how similar primary and secondary market websites can look and how easy it is
for consumers to be misled into believing that that they are purchasing from an official ticket seller.
BOX 2: COMPARING THE LOOK AND FEEL OF TICKET WEBSITES
The website of official ticket seller, Ticketek, is characterised by graphical advertising of upcoming
events, a menu bar at the top of the page, a search bar to search for events, and a category bar
outlining categories of events.
BOX 2: COMPARING THE LOOK AND FEEL OF TICKET WEBSITES (CONTINUED)
The website of ticket reseller, Viagogo, has a similar layout to the Ticketek website including
graphical advertising of upcoming events, a menu bar at the top of the page, a search bar to search
for events, and a category bar outlining categories of events.
CHOICE conducted a consumer survey as part of its research and found that 48 per cent of
consumers surveyed who purchased tickets on a ticket resale website thought that they were
purchasing from an official ticket seller and did not realise that the site was a resale website (CHOICE,
2017, p. 7).
The stakeholder consultation process confirmed that consumers find the ticket selling market
difficult to navigate. Many consumers shared their experiences in relation to ticket resale website
presenting as official ticket sellers.
My younger brother saw a sponsored ad on Facebook saying All Time Low tickets were
about to go on sale and to click on the Viagogo link to get tickets. He assumed this was
the official site to get tickets from, as it seemed that Viagogo was being advertised and
promoted as looking like an official ticket site for the gig.
Consumer Comment [Anonymous]
I was redirected to Ticketmaster Resale from Ticketmaster without me realising since I
was on my iPhone I had no idea. In fact I didn’t even know of the existence of the resale
sites then. I wasn’t clearly shown the resale price of the tickets so was pretty surprised to
find my receipt showed I’d paid 5 times the original price. It took me a while to figure out
what happened.
Consumer Comment [Anonymous]
Further, secondary ticket selling websites often lack important information about the tickets that are
being sold, making it difficult for consumers to make informed purchasing decisions. The types of
information that are useful for consumers to make informed purchasing decisions about tickets
include the face value of the ticket, the location or seat within the venue and information about the
seat that may affect the purchase decision and the consumer’s willingness to pay, such as visibility or
proximity to the stage. CHOICE found that:
‘The lack of transparency can often lead to disappointment and shock when the tickets
received do not match what the purchaser thought they were buying (CHOICE, 2017,
p. 14).
The stakeholder consultation process confirmed that consumers desire more information about the
tickets that they are purchasing, and a lack of this information can cause consumer confusion and
dissatisfaction especially in relation to price. Hundreds of consumers shared their experiences
purchasing tickets in the secondary ticket market:
We purchased two tickets to Justin Bieber through Viagogo for a total of $545. When the
tickets were able to be downloaded we found that they were only worth $153.20 each. I
feel extremely ripped off at already paying almost $250 too much.
Consumer Comment [Anonymous]
My best friend and I bought tickets from Ticketmaster Resale for $270, originally worth
$180. We were informed we’d be sitting in the front row in the block closest to the
barrier on the catwalk, but found once we were there we were actually nowhere near
where we were informed.
Consumer Comment [Anonymous]
Data collected from consumer regulators indicates that the level of complaints specifically in relation
to price is low.
Consumers benefit from knowing as much information as possible about a product or service before
they make a purchase this is one reason why mandatory disclosure requirements exists for some
categories of products, such as financial products. When consumers have more information, they
make better choices. CHOICE found that:
‘Many consumers said misleading or missing information on ticket resale websites was
frustrating and they would not have made a purchase had they known the details of a
ticket (CHOICE, 2017, p. 14)’.
Google’s voluntary action (see the discussion of Option 4 for more detail) indicates industry
awareness of the problem presented by asymmetric information in the secondary ticket market.
CONSUMERS CAN HAVE THEIR WELFARE REDUCED BY TICKET
SCALPING PRACTICES
The welfare impacts of ticket reselling are complex and dependent on the structure of the market,
the level of competition and the supply of tickets.
To evaluate the welfare of participants in the ticket market an analysis of the impacts of ticket
reselling on the consumer surplus is required. The consumer surplus is the difference between what
a consumer would be willing to pay for a good or service and what the consumer actually has to pay.
Consumer surplus reflects the amount of benefit, satisfaction or well-being consumers receive when
they buy products and services.
Generally, the existence of ticket reselling does not reduce the overall total level of economic welfare
in the market the market may even experience some efficiency gains if competition in the market is
strong. In some circumstances, consumers may be better off when resellers operate, as those who
place a greater value on a ticket (as reflected by a higher price) will have access to resold tickets,
whilst those who value their tickets at a lower price (and are therefore willing to sell their tickets)
may be able to sell their tickets at a profit. These gains are known as ‘gains from trade’. There can be
net economic gains for the economy when these ‘gains from trade’ are realised, which lead to
benefits for consumers.
However, ticket reselling - when ticket underpricing occurs - can also reduce the level of consumer
surplus, as it is redistributed to the ticket reseller. As noted, the stakeholder consultation process
confirmed that ticket underpricing does occur. When ticket underpricing occurs in the primary ticket
market and ticket scalping is legal, scalpers will receive the level of surplus which is forgone by
primary ticket sellers when they make the decision to underprice. Ticket reselling, and in particular
ticket scalping practices, erode the consumer surplus, causing consumers to experience reduced
benefits or satisfaction because of difference in what they are willing to pay and what they actually
had to pay. An erosion of the consumer surplus can result in reduced consumer welfare and sees that
surplus transferred to the ticket scalper, so the ticket scalper is taking some of the benefit that the
consumer would have experienced had the scalper not been operating in the market. While the
overall total welfare in the market has not been reduced, the distribution of that welfare has
changed. Further, Phillip Leslie and Alan Sorensen note:
Resale causes profit-seeking individuals to purchase tickets who otherwise would not
have, and causes some consumers to bypass the primary market and buy in the resale
market. Moreover, by providing a profit-motive for ticket buyers, resale may stimulate
individuals to engage in costly rent-seeking behavior as they compete to obtain the most
valuable tickets in the primary market. For these reasons, not only does ticket resale give
rise to redistributions of surplus in which some individuals are made worse off, but it may
also reduce overall social welfare (Leslie and Sorensen, 2009, p. 1)’.
Box 3 illustrates the welfare effects of ticket scalping in a ticket market where ticket scalping is legal.
BOX 3: WELFARE EFFECTS OF TICKET SCALPING
In the market for tickets to an event where ticket scalping is not permitted, the supply of tickets is
inelastic and fixed at S. The demand for tickets is downward sloping at D. The equilibrium price in the
market for tickets is P
e
with Q
e
as the quantity supplied at that price.
The primary ticket seller (producer) underprices their tickets at P
u
, creating excess demand for tickets
of Q
u
. The consumer increases their consumer surplus when the ticket is underpriced and ticket
scalping is not permitted, taking the portion of the producer surplus that is forgone as a result of the
lower ticket price.
In the market for tickets to an event where ticket scalping is permitted, the supply of tickets is
inelastic and fixed at S. The demand for tickets is downward sloping at D. The equilibrium price in the
market for tickets is P
e
with Q
e
as the quantity supplied at that price.
The primary ticket seller underprices their tickets at P
u
, creating excess demand for tickets of Q
u
. The
ticket scalper will purchase the ticket at P
u
. As ticket scalpers enter the market, market forces drive
up the price level until it reaches equilibrium (Pe). Instead of the consumer taking some of the
producer surplus that has been forgone, the ticket scalper takes some of the producer surplus,
thereby making the consumer worse off than they would have been when ticket scalping was not
permitted.
As illustrated in Box 3, while ticket resellers and scalpers do receive some surplus when ticket
reselling is permitted, the existence of reselling within the ticket market does not reduce total
welfare, rather the allocation of that welfare changes
In recent years there has been growth in the prevalence of unauthorised ticket resale websites and
platforms, making it easier for ticket scalpers to operate. Online ticket resale websites provide a
market for exchange, making it easy for ticket resellers and ticket scalpers to sell tickets acquired in
the primary ticket market at inflated prices to consumers. The websites typically provide the online
space to advertise, market and sell the ticket, and the payment mechanism to facilitate the
transaction. These websites typically allow the seller to set the price of the tickets that they wish to
resell. The website will often charge the seller a service fee, feed in their own booking or transaction
fees or take a percentage of the final price that the ticket was sold for.
Consumers may not know that they have purchased resold or scalped tickets until the ticket arrives
and they see the face value of the ticket and compare it to what they have paid, or if they are denied
entry to the event on the day.
CONSUMERS RISK THEIR TICKETS POTENTIALLY BEING
CANCELLED
Tickets sold by ticket sellers in the primary ticket market are generally subject to multiple sets of
terms and conditions, sometimes coming from the artist, the promoter, the ticket seller and the
venue.
Since 2001 LPA has produced the LPA Ticketing Code of Practice, a voluntary industry code of
practice covering the ticketing industry for live performance events. The Code provides protection for
consumers in the live performance industry, and although the document itself does not carry legal
force it is reflective of legal standards as expressed in the ACL. Compliance with the Code is a
condition of LPA membership. Almost all primary ticket sellers are members of LPA.
The terms and conditions of the ticket sale may include provisions that prohibit the resale of tickets
or warn the purchaser that tickets may be cancelled if they have been found to have been resold.
Consumers who purchase tickets from resale websites risk breaching the terms and conditions of the
original ticket sale and subsequently having their ticket cancelled.
A selection of terms and conditions from official ticket sellers are outlined in Box 4.
BOX 4: OFFICIAL TICKET SELLER TERMS AND CONDITIONS AND RESALE
Below are excerpts from official ticket terms and conditions.
Ticketek
Tickets may not, without the prior written consent of Ticketek and the Seller, be resold or offered for
resale at a premium (including via on-line auction or other unauthorised resale sites) or used for
advertising, promotion or other commercial purposes (including competitions and trade promotions)
or to enhance the demand for other goods or services. If a ticket is sold or used in breach of this
condition, the ticket may be cancelled without a refund and the ticketholder of the ticket may be
refused admission. Ticketek will use reasonable efforts to notify you of such action.
Ticketmaster
There are laws in place in certain states that prohibit resale of tickets to certain events or limit the
prices at which they may be resold. As a ticket purchaser, you are responsible for complying with any
such laws.
A ticket shall not be used for advertising, promotions, contests or sweepstakes, unless formal written
authorisation is given by the Event Partner, provided that even if such consent is obtained, use of
consent.
When purchasing tickets on a site, you are limited to a specified number of tickets for each event
(also known as a 'ticket limit'). This amount is included on the unique event page and is verified with
every transaction. This policy is in effect to discourage unfair ticket buying practices. We reserve the
right to cancel any orders where we identify breaches of these limits, including where we know or
reasonably suspect automated means have been used to purchase tickets. Use of automated means
to purchase tickets is strictly prohibited.
OzTix/Destroy All Lines (Ticket Solutions)
Tickets may not, without the prior consent of the Presenter, be resold or offered for resale at a
premium over the face value of the ticket (including via on-line auction sites) or used for advertising,
promoting or other commercial purposes (including competitions and trade promotions) or to
enhance the demand for other goods or services either by the original purchaser or any subsequent
ticket holder.
The stakeholder consultation process found that primary ticket sellers do cancel tickets if they know
that they have been sold in breach of the terms and conditions of the ticket, however, most sellers
noted that this is rare given that it is difficult to identify resold tickets. Further, primary tickets sellers
acknowledged that they may also cancel tickets at the request of the event organiser if the
organiser’s terms and conditions have been breached.
Live Performance Australia noted:
The practice of cancelling tickets due to having been resold in contravention of the ticket
terms and conditions varies among our Members. For many of our Members, the reality
is they are unable to cancel tickets because they do not have full ticket details to perform
the cancellation, the venue at which the production is being presented does not use
barcode scanning technology (and therefore venue staff are unable to definitively know
if a ticket is valid or invalid) and they lack the resources to monitor ticket scalping
activity. Other members take a very firm stance against ticket scalping; they cancel every
ticket that comes to their attention as having been resold in contravention of the ticket
terms and conditions.
Live Performance Australia Submission
The stakeholder consultation process found that ticket cancellation, though rare, could harm
consumers. CHOICE noted that:
Consumers more often than not do not know if they purchased tickets on the resale
market…consumers are punished for a breach of a terms they didn’t know
existed…allowing cancellation for resold tickets means businesses are double dipping-
venues/promoters receive the money from the original ticket sale, and the money when
a consumers is given the opportunity to repurchase the ticket at the gate…consumers
face greater harm than just losing the value of the ticket [as] consumers travel for gigs
and have paid for transport, accommodation and incidentals and visiting consumers will
be left with a poor impression of Australia if their experiences with a major venue, like
the Opera House, is one where they were locked out of a performance or game without a
refund or rights due to a law that is not effectively communicated to them.
CHOICE Submission
CONSUMERS RISK POTENTIAL SCAMS AND FRAUDS
In addition to ticket scalping and ticket onselling activity, the secondary market can also create
opportunities for people to perpetrate ticket fraud and ticket scams against consumers.
Purchasing tickets from an unauthorised ticket reseller can expose consumers to the risk of fraud
because the authenticity of the ticket cannot be guaranteed. In addition to authenticity issues,
consumers also risk that the same authentic ticket may be counterfeited and sold multiple times.
Where a ticket has been sold multiple times, the first purchaser to arrive at the event will gain entry
and those who follow will be refused entry.
Media reports and anecdotal evidence from some stakeholders has asserted that the sale of
fraudulent tickets is a major issue. Notwithstanding these assertions, the scale of this behaviour is
unclear. In 2014, the ACCC found that fake or non-existent tickets were only a small component of
the total number of scams that were reported. Money lost by these reported scams totalled $70,993
compared to the total money lost to all scams of $90 million (Medhora, 2017).
The stakeholder consultation process confirmed that consumers are concerned about potential
scams and frauds, including fake tickets. However, few consumers reported they had been victims of
such scams and frauds. One consumer noted:
I had purchased two tickets amounting to $900 for my girlfriend and I’s anniversary
present, only to be denied entry at the gate saying the tickets had already been claimed.
Consumer Comment [Matias Salinas]
Some primary ticket sellers and promoters reported that they are often contacted by consumers who
have purchased tickets through resale, seeking confirmation on the authenticity of the ticket.
Primary ticket sellers and promoters also noted that where there have been ticket fraud or scams
perpetrated, such as a ticket being sold multiple times, venue and event staff feel the brunt of
consumer dissatisfaction. Live Performance Australia noted:
Our smaller venue Members report there have been instances in recent times where
people have turned up to their venue having bought tickets from the secondary
market…in some instances, these consumers have legitimate tickets and are able to
enjoy the event. Unfortunately, however, there are many instances where the ticket
presented is fraudulent (usually because the same ticket has been resold multiple times).
Live Performance Australia
TICKET-BUYING BOTS REDUCE CONSUMERSFAIR ACCESS TO
TICKETS
A ticket-buying bot is a piece of computer software that automates the process of buying a ticket
from primary ticketing websites. Ticket-buying bots can be employed by ticket scalpers to infiltrate
ticket selling systems and purchase large quantities of tickets at high speed for the purposes of
onselling them on resale sites and depriving consumers of the opportunity to purchase them. Ticket-
buying bots are easy to find online and can typically be purchased for a few hundred dollars. Some
more sophisticated ticket scalpers may write their own ticket-buying bot software.
There are several types of ticket-buying bots, and the majority are used to pick up tickets as soon as
they go on sale by filling out the primary ticketing websites dropdown prompts in less than a tenth of
the time that even a skilled human can do. In many cases the ticket-buying bots are not able to
complete the CAPTCHA or re-CAPTCHA (a test in which the user of a website is asked to decipher a
distorted image, used to protect the website against automated attacks), and this is assigned to
human workers. Some ticket-buying bots are programmed to make thousands of requests on
ticketing websites using thousands of different IP addresses (Common, 2016). The tickets are then
immediately resold at higher prices on ticket reselling websites and platforms. In 2016, Ticketmaster
alone blocked more than six billion attempts by ticket-buying bots to gain access to its websites
globally, including Australia (Ticketmaster, 2017).
Ticket-buying bots cause consumer detriment because they prevent consumers from having fair
access to the primary ticket market. Research from international jurisdictions such as the United
States of America, United Kingdom and Canada indicates that overseas ticket resellers or scalpers use
ticket-buying bots as part of an overall strategy to gain access to tickets in volume. Typically a ticket
scalper studies the underlying architecture and processes of ticketing websites, researches presale
requirements, and joins fan clubs or obtains presale-specific credit cards (Koebler, 2017).
While the use of ticket-buying bots does seem to have an impact on the availability of tickets in the
primary market, there is no evidence to suggest that ticket-buying bots are resulting in completely
sold out shows, and in most cases there are tickets still available on the primary market (CHOICE,
2017). Rather, ticket-buying bots are typically purchasing the most premium tickets (such as front
rows) for the express purpose of reselling them at a higher price.
While bot activity typically targets the most desirable events and seats rather than necessarily
pervading the wider market for tickets, consumers do experience detriment from fewer of these
more sought-after tickets being available at the original price. Consumers expect, and are entitled to
expect, fair access regardless of the relative desirability of particular event tickets.
The stakeholder consultation process confirmed that primary ticket sellers experience attacks on
their ticket selling systems from ticket-buying bots:
Ticketek deploys considerable resources to address issues arising from the use of ticket-
buying bots. Bots not only obtain a large proportion of premium tickets immediately
after tickets go on sale, but they also prevent consumers from purchasing tickets by
placing large numbers of tickets on hold until the bot is detected or timed out of the
ticketing system…evidence gathered through real-time monitoring of popular onsales, as
well as other anecdotal evidence, demonstrates that tickets seemingly acquired by bots
in the primary market are placed on secondary markets at inflated prices almost
immediately.
TEG Submission
[Stakeholder] has experienced 10,000 tickets being held and the average transaction
time is 3-4 minutes and yet only 300 tickets per minute are being transacted. This
indicates that bots are ‘holding’ the tickets and then a scalper is sifting through the held
tickets and purchasing only the tickets closest to the stage or those that are worth more
on the resale market.
Confidential Submission
OTHER ISSUES
During the stakeholder consultation process, consumers also raised a range of other issues of
concern to them. While these issues are not presented as being problems for the purposes of this
Decision RIS, they are noted here for completeness.
Lack of Refunds
Many consumers expressed frustration over the lack of refunds in the ticket market. Typically,
primary ticket sellers will only provide refunds to consumers where an event is cancelled.
A fairer system would be if they offered ticket refunds if you can no longer attend, or
simply charge a fee similar to a booking fee for administrative fee to someone who is
reselling a ticket at face value or below.
Consumer Comment
One of the solutions should be that if you are not 100% happy with the tickets you buy
then you should be able to obtain a full refund. This applies to many offline providers
where there is a cooling off period - so why shouldn't it apply online?
Consumer Comment
The nature of the live performance and sporting industries is such that events have very high
overheads and involve a high amount of risk on the part of event organisers. Typically, event
organisers front all of the costs for the event. In order for events to be viable, event promoters must
at least break even, therefore a certain level of ticket sales is required for the event to be viable.
Once a ticket has been purchased, the event organiser needs to know that the revenue is
guaranteed, therefore refunds are generally not permitted. One event promoter noted:
Organising and promoting live events carried significant risk, with the finances fronted
by the event organiser. Therefore, once a ticket has been purchased, the event organiser
need to know that the revenue is guaranteed and returns are not permitted.
Confidential Submission
Reselling Fees
Many consumers expressed frustration at being charged ‘excessive’ reselling fees by ticket reselling
sites.
I bought the ticket for $250, but when I tried to sell it for the same price, [the ticket
reseller] whacked a $100 fee on it.
Consumer Comment
[The ticket reseller] makes a lot of money off reselling tickets - 25% of sale. I think this is
ridiculous. I wanted to sell the ticket through [the] website so it was safe, but taking 25%
of the sale is criminal.
Consumer Comment
Timing of Payments
Some consumers noted that where they had used the services of some ticket resellers, they did not
receive the proceeds from the sale until after the event had occurred.
[The ticket reseller], although they had received the funds from the sale, would not
release the funds to me until after the event. In some circumstances, like mine, this could
be 9 - 12 months from the date of initial resale of these tickets. Although the sale had
been transacted [and] new tickets issued to the purchaser, they held onto the proceeds
of the sale. This is to the sellers detriment, as if I was to wishing to utilise these funds, I
was unable to access them.
Consumer Comment
I resold some tickets and have been told I will receive the money paid 7-10 days after the
event. I paid the money for these tickets prior to the event and had the money removed
from my credit card very quickly and want to know why I am now having to wait till end
of January if not February to receive my money back.
Consumer Comment
Ticket sellers noted that withholding the proceeds of the ticket ensures safety for the buyer, allowing
them to ensure that the ticket is genuine at the time of entry. If the ticket is not genuine, the buyer
can raise the issue with the ticket reselling platform, who can then raise it with the seller.
Speculative Resale
Live Performance Australia raised the issue of speculative resale as a potential problem in the
secondary ticket market. Live Performance Australia noted:
Speculative resale is the practice whereby a scalper (who does not ‘own’ tickets)
advertises tickets at an inflated price through the secondary market and once a
consumer has bought the tickets, purchases tickets from the primary market to then pass
on to the unsuspecting consumer. LPA is concerned about this practice because:
From a consumer perspective consumers may unintentionally pay too much
for a ticket and/or may be deterred from attending any live entertainment
because they believe tickets to live entertainment events are cost prohibitive.
The industry is particularly concerned about the impact of this practice on
consumer confidence.
From a commercial perspective if tickets remain unsold in the primary
market, producers/promoters are not maximising their ticket sales and may not
be able to recoup the costs associated with staging the event. The flow on
impact is that producers/promoters may no longer be able to stage quality
events which reduces the choices available to consumers.
Live Performance Australia Submission
CONCLUSIONS
The regulation impact assessment process has identified several problems in the secondary ticket
market that result in perceived consumer detriment. However, the regulation impact assessment
process has not been able to accurately quantify the size of these problems or the consumer
detriment.
In general terms, this RIS finds that when consumers participate in the secondary ticket markets they
often lack the information required to make an informed purchasing decision that would maximise
their utility. Falling prey to ticket scalping practices can reduce consumers’ welfare and leave them
worse off than if they had purchased their tickets in the primary ticket market. In addition,
consumers who participate in the secondary ticket market expose themselves to risks (both
knowingly and unknowingly) such as cancellation and fraud. Further, the use of ticket-buying bots
can reduce fair access to tickets for consumers.
An important caveat to the identified problems in the secondary ticket market is that ticket reselling
activity does offer allocative efficiency benefits where event promoters choose to underprice tickets,
given that it facilitates the sale of tickets consistent with consumers’ relative willingness to pay.
However, while fully informed consumers can make their own choices about whether to transact in
the secondary market and accept the risks involved, this RIS finds that consumers often do not have
the information required to make those choices.
2. POLICY OBJECTIVES
The policy objectives are:
to reduce consumer detriment in the secondary ticket market that arises from consumers not
being provided the information that they require to make an informed purchasing decision;
to reduce the risk that consumers are advertently or inadvertently misled or deceived when they
purchase tickets to events in the secondary ticket market; and
to promote fair access to event tickets.
Reducing consumer detriment and reducing opportunities for consumers to be misled or deceived
will enhance the welfare of Australians by giving them greater confidence and certainty when they
choose to participate in the secondary ticket market.
The options to address the identified problems seek to improve outcomes for consumers who
participate in the secondary ticket market. The options reduce the level of risk in the market, ensure
that consumers are provided with the information that they require to make more informed
purchasing decisions and seek to ensure that consumers have fairer access to tickets.
Consumers should be able to participate in the ticket market with confidence and certainty. They
should be able to know and recognise the differences between the primary and secondary ticket
markets and understand who they are purchasing their tickets from.
Consumers’ understanding who they are purchasing their tickets from allows them to better identify,
understand and manage the risks associated with purchasing tickets in the secondary ticket market.
This includes consumers being able to make better judgements about the price of tickets they are
purchasing, as well as being able to make better judgements about how they value those tickets.
In achieving these objectives, it is important that the benefit should exceed the costs.
In addition, options addressing the problem identified would also seek to provide certainty to ticket
resellers operating in the secondary ticket market by outlining the manner in which tickets can be
resold.
3. POLICY OPTIONS AND IMPACT ANALYSIS
SUMMARY
There are a number of policy options to reduce consumer detriment and improve outcomes for
consumers in relation to ticket reselling.
To address the problem defined, this RIS explores five options:
OPTION 1 the status quo, with consumer education
OPTION 2 national prohibition (ban) on ticket reselling
OPTION 3 restricted reselling
OPTION 4 improved information disclosure arrangements for ticket resellers
OPTION 5 national ban on the use of ticket-buying bots
The options explore the gamut of interventions from outright bans and restrictions to lighter touch
regulations to improve the operation of the secondary ticket market.
Undertaking a quantitative analysis of the costs and benefits of each of the five options, beyond
specific and identifiable compliance costs, presents a number of challenges. The secondary ticket
market in Australia is small and immature and there is no solid data on the size of the market or on
how much time consumers spend engaging with the secondary market.
The analysis of impacts of each option is therefore qualitative and focuses on reflecting on the
anticipated benefits and costs of each of the options. The stakeholder consultation process affirmed
these anticipated impacts, as well as revealing new impacts. However, the anticipated impacts
cannot be quantified with any certainty.
The compliance costs for businesses are outlined beneath each option. These compliance costs
estimates are based on data and assumptions drawn from extensive consultation with the primary
and secondary ticket markets.
As noted, the secondary ticket market in Australia is small and immature. There are an estimated 10
firms participating in the secondary ticket market. Secondary ticket sellers estimate that the size of
the secondary ticket market represents around 1 per cent of the primary market. The consultation
process also revealed information about the steps that secondary ticket sellers and ticket reselling
platforms would need to take to comply with the options, including ticket system redesign and ticket
verification, and the time it may take to comply.
Compliance cost estimates have been calculated based on these assumptions.
OPTION 1: STATUS QUO, WITH CONSUMER EDUCATION
Under this option, existing laws would continue to operate. Government, together with the industry,
have conducted various education campaigns to warn consumers of the risks of participating in the
secondary ticket market. Consumer Affairs Australia and New Zealand’s education campaign ran for 6
weeks from March to May 2018.
Existing law
Broadly, ticket reselling and ticket scalping is generally not illegal in Australia. However, the ACL,
together with existing State and Territory laws, provide a level of coverage to address issues
associated with ticket reselling and ticket scalping in the secondary ticket selling market.
The ACL is jointly administered and enforced by the Australian Competition and Consumer
Commission (ACCC) and State and Territory consumer affairs agencies under a ‘one law, multiple
regulator’ model. Policy on the ACL is set by CAF as part of a consultative process governed by an
Intergovernmental Agreement.
The Australian Consumer Law
In the context of ticket reselling and ticket scalping, even though these types of transactions may
involve private sales through classifieds or online websites, the likelihood of there being some form
of protection under the ACL will depend on whether the transactions in question could be considered
to be undertaken in ‘trade or commerce’ or not. In the purely private (person to person) setting,
where the ticket is resold at or below original cost, it is likely that the ACL would not apply at all.
However, the ACL may have a role where the tickets are resold at a premium or through commercial
reselling platforms.
The ACL contains a number of different existing provisions that can be used to address issues
associated with ticket reselling and ticket scalping. These include provisions that prohibit:
misleading or deceptive conduct;
false or misleading representations;
unconscionable conduct;
bait advertising; and
wrongly accepting payment.
In addition, the consumer guarantees regime can provide consumers with remedies in relation to
resold or scalped tickets.
Misleading or Deceptive Conduct
Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that
is misleading or deceptive or is likely to mislead or deceive.
It would be reasonably open to a court to find that certain aspects of ticket reselling and ticket
scalping practices could amount to misleading or deceptive conduct (or conduct that is likely to
mislead or deceive) in that the secondary ticket seller’s conduct would lead (or would be likely to
lead) the buyer into error. This would apply to the extent that the secondary ticket seller engages in
either of the following practices:
deliberately fails to disclose any terms or conditions of the ticket that prohibit the original ticket
from being resold, and the breach of which would result in the ticket being cancelled; or
sells the same ticket multiple times, which may lead to the ticket being cancelled, or to some of
the buyers not being able to gain entry to the event.
In such cases, it is likely that the fact that a secondary ticket seller is selling the ticket would imply
that the ticket could be used to enter the relevant event. If such restrictions are not disclosed prior to
sale, it is likely that the secondary ticket seller may have engaged in conduct that is misleading or
deceptive or that is likely to mislead or deceive.
False or Misleading Representations
Sections 29 and 34 of the ACL set out particular conduct that would be considered false or misleading
representations regarding goods or services, including making false or misleading representations in
relation to the existence or exclusion of any terms and conditions, false or misleading
representations in relation to value, sponsorship and approval or false or misleading representations
in relation to price.
Depending on the circumstances of the particular transaction between a secondary ticket seller and a
consumer, it may be possible that the secondary ticket seller’s conduct could amount to a false or
misleading representation. However, this would depend on the specific facts of the transaction, and,
particularly, on whether the secondary ticket seller’s statements lead the consumer to believe, for
instance, that there are no conditions attached to the ticket.
The laws relating to misleading or deceptive conduct and false or misleading representations can
apply to the selling platform or the individual ticket reseller, depending on who is making the
representation and how the resale platform is designed.
Unconscionable Conduct
Section 20 of the ACL prohibits a person from engaging, in trade or commerce, in conduct that is
unconscionable within the meaning of the common law. Section 21 prohibits a person from engaging
in unconscionable conduct in trade or commerce, in connection with the supply or possible supply,
or the acquisition or possible acquisition, of goods or services.
Whether a secondary ticket seller has engaged in conduct that is unconscionable for the purposes of
Section 21 will depend on the particular facts of the individual transaction. However, the following
factors could support the view that there has been unconscionable conduct:
the consumer may not have been able to understand documents relating to the supply or possible
supply of the goods or services (such as any terms and conditions on the primary ticket seller’s
website that may include a prohibition on ticket resale); and
the secondary ticket seller may have unreasonably failed to disclose to the consumer the risks
arising from their intended conduct, in circumstances where the ticket seller should have
foreseen that those risks would not be apparent to the customer. This would include, for instance,
that the ticket could be cancelled if the secondary ticket seller sold it to the consumer.
Conversely, the following factors may support the view that the secondary ticket seller has not
engaged in unconscionable conduct:
the consumer was aware that the ticket seller is not the original ticket seller;
the consumer was aware that the ticket is likely to include a condition that prohibits resale of the
ticket, and that it is possible the ticket may be cancelled; and
the consumer was aware of the original price of the ticket from the original sale.
Bait Advertising
Section 35 of the ACL provides that a person must not, in trade or commerce, advertise goods or
services for supply at a specified price if there are reasonable grounds to believe the person will not
be able to offer those goods or services at that price in reasonable quantities having regard to the
nature of the market and the advertisement, and the person is aware or ought reasonably to be
aware of those grounds.
In circumstances in which a secondary ticket seller advertises the same ticket multiple times, it may
be possible to argue that the seller has engaged in bait advertising for the purposes of Section 35.
Whether a secondary ticket reseller would actually contravene Section 35 would depend on the
particular circumstances of the transaction and the advertisement.
Wrongly Accepting Payment
Section 36 of the ACL provides that a person must not, in trade or commerce, accept payment or
consideration for goods or services if, at the time of the acceptance, the person intends not to supply
the goods or services.
If a secondary ticket seller accepts payment for a ticket and does not supply the ticket or supplies a
fraudulent ticket, they may be wrongly accepting payment. Similarly, if a person sells the same ticket
multiple times, they cannot genuinely provide the good or service to multiple people, and may be
wrongly accepting payment.
Consumer Guarantees
Finally, the consumer guarantees regime, contained in Part 3-2, Division 1 of the ACL are also
relevant to the issue of ticket reselling and ticket scalping.
Consumer guarantees include, among other things, that goods will be of acceptable quality, fit for
any specified (particular) purpose, and match the description, sample or demonstration model. By
purchasing tickets, a consumer makes known to sellers that their intention is to attend an event. If
the purchased ticket is subject to terms and conditions that could result in the ticket being cancelled
because it has been resold, this could amount to the ticket being no longer fit for purpose.
Similarly, if the same ticket has been sold multiple times (such that all but one of the purchasers
would be prevented from attending the event), a ticket would no longer be fit for purpose. In these
limited circumstances, the secondary ticket reseller is likely to have breached the consumer
guarantees.
Noting the existing ACL framework, the stakeholder consultation process found that there was
support for stronger enforcement of the ACL in relation to secondary ticket reselling:
The TBA is concerned about the predatory, misleading and deceptive practices of some
organisations within the ticket resale industry, particularly offshore entities conducting
ticket resale through offshore websites. These websites represent themselves to
consumers as authorised ticket vendors (they are not), use ‘drip pricing’ techniques to
inflate prices and give consumers little recourse in the case of non-delivery of tickets,
cancellation of tickets or other problems. These websites do not comply with Australian
law.
Ticket Brokers Association
State and Territory Legislation
In Australia, some State and Territory jurisdictions have in place legislation that can restrict or
prohibit ticket reselling and ticket scalping for certain events. Some jurisdictions have implemented
legislation which permits regulation of events that are declared ’major events’ or similar by the
relevant Minister. In some cases, relevant laws will only cover traditional ticket scalping and not
modern ticket scalping, while others cover both. Further, some legislation only applies to sporting
events, not other forms of entertainment.
Victoria
In Victoria, the Sports Event Ticketing (Fair Access) Act 2002 was the first piece of legislation that
dealt specifically with ticket scalping by attempting to control scalping activity in the physical vicinity
of venues. The Act was later replaced with the Major Sporting Events Act 2009 (MSEA).
Under the MSEA, the Minister may make a sports ticketing event declaration in respect of a sports
event. Within 60 days of the declaration being made, the operator of the event must submit a ticket
scheme proposal to the Minister for approval which publically declares how tickets are to be
distributed and to whom and in what quantity.
Under the legislation, if the sports event has been declared and there is a condition in the proposal
that prohibits the sale or distribution of a ticket by a person who is not authorised to sell or distribute
tickets, then the person has contravened the Act.
To date, there have been seven successful prosecutions for ticket scalping in Victoria, with fines
ranging from $500 to $5,000 issued, as well as costs awarded to the Victorian Government. In
addition, Sport and Recreation Victoria was successful in securing an injunction against the operators
of the website Ticketfinders to prevent them illegally selling tickets to the 2011 AFL Grand Final.
Following a review of MSEA by the Department of Economic Development, Jobs, Transport and
Resources the Victorian Parliament passed laws on 15 May 2018, to rename MSEA as the Major
Events Act 2009. The new laws commenced on 1 June 2018.
The laws expand the ticket scalping provisions to apply to non-sporting major events (such as cultural
events, including theatre events, concerts, gallery exhibitions and festivals). Where an event is the
subject of a major event ticketing declaration, it will now be a criminal offence to advertise or resell a
ticket for more than 10% above the face value of the ticket. Fines can range from $790 up to
$475,000 depending on the nature of the offences. New authorised ticketing officers will be given
equivalent powers to that available to police officers under the ticket scalping provisions of the Act,
to support the Victorian Police in the enforcement of the Act.
Queensland
In Queensland, ticket reselling is regulated under the Major Sports Facilities Act 2001 (MSFA) and the
Major Events Act 2014 (MEA).
The MSFA applies only to events conducted at declared major sports facilities (typically major
stadiums) and the MEA applies to prescribed major events (which occur over larger areas during
temporary periods).
Under the MSFA it is an offence to resell a ticket to a major sports facility event for a price greater
than 10 per cent above the original face value of the ticket. It is also an offence under the MSFA to
purchase a ticket to a major sports facility event for more than 10 per cent of the original price.
Similarly, the MEA prohibits a person from selling tickets to a prescribed major event within a
controlled area or a major event area, or at a price greater than 10 per cent above the original sale
price of the ticket. Although, the prohibition does not apply where the person concerned has the
written approval of the major event organiser. Currently declared major sports facilities under the
MSFA include the Brisbane Cricket Ground, Brisbane Entertainment Centre, Suncorp Stadium,
Metricon Stadium and other venues. To date, the Townsville and Gold Coast V8 Supercars, the 2015
AFC Asian Football Cup and the Gold Coast 2018 Commonwealth Games (GC2018) have been
prescribed as major events under the MEA.
Enforcement activities under the MSFA are the responsibility of Queensland Police. Penalties for
contraventions range from $65 on-the-spot infringement notices (for contravening the MSFA by
purchasing a scalped ticket) to maximum fines of $2,611 for reselling a ticket in contravention of the
MSFA. However, it has become increasingly difficult for the Queensland Police to enforce ticket
scalping provisions, particularly due to the growing number of online companies used to resell
tickets. On the other hand, under the MEA, the major event organiser for an event is responsible for
taking action to prosecute ticket scalping offenders. During GC2018, the Gold Coast 2018
Commonwealth Games Corporation (GOLDOC) was responsible for monitoring and providing primary
oversight of websites in relation to ticket scalping activities. The MEA provision relating to ticket
scalping was available for GOLDOC to use in the lead up to and during GC2018. GOLDOC used this
provision in conjunction with the terms and conditions of its ticket sales. No formal prosecutions
were taken by GOLDOC under this provision during GC2018.
Australian Capital Territory
In the ACT, ticket reselling is regulated under the Major Events Act 2014. Similar to Victoria and
Queensland, the legislation only covers events that are declared events. Under the Act, notice must
be given for either a major event (through a Major Event Declaration) or an important sporting event
(through an Important Sporting Event Notice). There are also offences under the Act if a person sells
or trades a ticket to an event without written permission from the event organiser for greater than
the face value of the ticket. A separate offence exists under the legislation where a person uses a
ticket for the purpose of receiving a financial benefit without authorisation from the event organiser.
Since the Act was introduced, the One Day Cricket International (2014) was declared as an important
sporting event. The AFC Asian Cup (2015), the Cricket World Cup (2015) and the Rugby League World
Cup (2017) have been declared major events.
New South Wales
In NSW, recent amendments to the Fair Trading Act 1987 prohibit the resale of tickets to sporting or
entertainment events in NSW, for any amount above the original acquisition cost of the ticket. These
amendments commenced on 1 June 2018.
The original acquisition cost of the ticket is defined as the original supply cost (or face value) of the
ticket, plus the transaction costs not exceeding 10 per cent of the original supply cost. Transaction
costs include any commission, booking fees, payment surcharges and ticket delivery fees incurred by
the first purchaser of the ticket in connection with the purchase of the ticket.
Further, the new laws prohibit the advertising of the resale of a ticket for an amount that is more
than 110 per cent of the original supply cost of the ticket. Any advertisement must also disclose the
original supply cost of the tickets, as well as the details of the location from which the ticket holder is
authorised to view the event, such as the section, row and seat, as well as the admission type.
The NSW laws also aim to protect ‘legitimate’ resale by voiding any ticketing condition that
invalidates or cancels a resold ticket where the ticket was resold for no more than the original
acquisition cost. Further, the Minister is able to issue an order requiring the public disclosure of
ticketing information about certain events, provided certain procedural fairness steps for event
organisers have been met. When the order is made, the event organiser must give public notification
of the number of tickets available for general public sale by authorised sellers.
The Major Events Act 2009 also makes it an offence, without authorisation, to sell a ticket for
admission to a major event venue or facility, which has been declared as such by the responsible
Minister. The Crown Lands Act 1989 and the Local Government Act 1993 have prohibitions on
engaging in unauthorised commercial, trade or business activities on certain public lands or
community lands respectively, that would apply to the reselling of event tickets on those lands.
Additionally, the Sydney Cricket and Sports Ground Act 1978, the Sydney Olympic Park Authority Act
2001, and the Centennial Park and Moore Park Trust Act 1983 contain prohibitions against trading
that in effect prohibit ticket resale at the relevant venues. However, the prohibitions in these Acts
only apply if the sale or attempted sale takes place at the venue or lands in question (that is, they do
not apply to internet sales).
South Australia
In South Australia, ticket reselling for certain events is regulated under the Major Events Act 2013.
This legislation is similar to Victoria, Queensland and the ACT as the legislation only covers events
that have been declared as major events. Major events generally generate significant benefits for the
state and align with wider government and strategic priorities for tourism.
Under the Act, it is an offence to sell a ticket for a major declared event in the controlled area of the
event, or to resell a ticket anywhere, for a mark-up greater than 10 per cent.
The South Australian Government has introduced a Bill, currently before the South Australian
Parliament, containing similar provisions to those that commenced in New South Wales in June 2018.
This includes a prohibition on the resale of tickets for more than 10% above the original supply cost
of the ticket, a set of reseller disclosure requirements and a prohibition on ticket-buying bot activity.
Perspectives on Existing Law
The stakeholder consultation process found that some sellers in the secondary ticket market are of
the view that the current law is sufficient and the status quo should be maintained:
Existing Australian Consumer Law is adequate and effective in dealing with issues that
arise in the secondary market. It provides consumer protection, avenues to pursue
companies that may be using misleading and deceptive tactics, and provides consumers
with a clear guideline as to what is considered acceptable consumer standards.
Confidential Submission
People with tickets they cannot use should be able to sell them for what they are worth.
Fans keen to experience an event should be free to pay a market rate for those tickets,
above or below the face value. The free market is the best system for determining fair
value and filling stadiums.
eBay | StubHub | Gumtree Submission
Other stakeholders felt that the status quo was not acceptable and did not support it:
We do not support maintaining the status quo. The fact that ticket scalping remains a
significant issue faced by fans trying to access major events is an indication that the
current legislative framework is not offering sufficient protection to consumers.
Confidential Submission
Despite differing views about whether the status quo should be maintained, it was noted by most
ticket sellers in both the primary and secondary markets that the existence of different laws across
jurisdictions creates a large compliance burden for businesses and is confusing for consumers. There
was strong support for a single national law in relation to the secondary ticket market:
Currently, the patchwork of legislation across Australia does not serve the consumer
whether acting as a buyer or seller of tickets within or over state lines or national borders
participating in the secondary market. First, a consumer cannot be expected to
understand the implications of different state law. Equally, tourists will most likely want
to buy tickets to events when visiting Australia without understanding different state
law. Secondly, consumers won’t know which ticket resale website is compliant with
state legislation. This especially applies to tickets bought on online websites registered
and operated outside of Australia. Until each resale website selling tickets to consumers
in Australia is fully compliant with each piece of legislation in each state, the consumer
will be put at a disadvantage.
Confidential Submission
LPA recognises that there are benefits for a nationally consistent approach to ticket
scalping. Currently, there exist different ticket scalping legislation in several Australian
states. This inconsistency creates confusion as to what protections exist for consumers. It
also places greater administrative burden on ticketing companies and event organisers
to comply with different legislative requirements.
Live Performance Australia Submission
The Australian Competition and Consumer Commission (ACCC) has had some success using existing
laws to remedy problems in the ticket market, including the secondary ticket market. For example, in
2014, the ACCC worked with Ticketek and Ticketmaster to improve price transparency in relation to
fees and charges and in 2017 the ACCC instituted proceedings in the Federal Court against ticket
reseller Viagogo in relation to misleading consumers. These court proceedings are ongoing.
Despite a suite of national and State and Territory laws that can be used to address the problems
associated with ticket reselling, State and Territory regulators note difficulties in undertaking
enforcement action, particularly in relation to identifying individuals who may have engaged in
contraventions.
Industry Led Initiatives
Artists and performers, event promoters and primary ticket sellers are all taking significant
industry-led actions to reduce opportunities for ticket reselling and scalping. These include the use of
terms and conditions and codes of practice that limit resale, anti-ticket scalping technologies at the
point of sale within ticket selling systems, the use of electronic tickets, holding back ticket
distribution until a few days before events, using proof of purchase and proof of identity measures,
allowing refunds and establishing exchange mechanisms and implementing consumer awareness
programs about the secondary ticket market.
It is in the interests of artists, promoters and ticket sellers to limit ticket reselling and ticket scalping
opportunities for a number of reasons including ensuring fair access and the creation of trust within
their ticketing systems, maintaining the goodwill of consumers and preserving their industry
reputation.
These industry-led initiatives are going some way to combatting unauthorised ticket reselling and
ticket scalping.
Ticket Terms and Conditions and Codes of Practice
Tickets sold by ticket sellers in the primary ticket market are generally subject to multiple sets of
terms and conditions, sometimes coming from the artist, the promoter, the ticket seller and the
venue. These were outlined in Box 4.
Ticket terms and conditions are often influenced by LPA’s Ticketing Code of Practice (the Code). Both
Ticketmaster and Ticketek are members of LPA and compliance with the Code is a condition of LPA
membership. Whilst the Code does not currently require ticket sellers to include particular
anti-scalping clauses in their terms and conditions, this is currently under revision.
Some ticket sellers in the primary market have indicated that whilst some terms and conditions give
rise to a right to cancel resold tickets it is often difficult to identify tickets based on the information
provided on resale platforms.
Anti-Scalping Technologies
Tickets sellers in the primary ticket market have a number of anti-scalping technologies in place
within their ticketing systems. Some ticket sellers have indicated that they use technologies that can
detect when a purchaser is using ticket-buying bot technology, if a purchaser is using a fake or stolen
credit card, or if a purchaser is purchasing tickets from a previously offending IP address. However,
none of these methodologies are flawless.
Primary ticket sellers are also using technologies such as CAPTCHA and re-CAPTCHA systems which
verify if the purchaser is human. These systems can slow down the purchase of tickets by genuine
buyers. However, these systems are being adapted as quickly as possible to prevent new
ticket-buying bots, or software updates to existing ticket-buying bots from continuing to infiltrate
systems.
In addition, it is also possible for primary ticket sellers to implement regional buying restrictions tied
to credit card billing addresses (for example, tickets to a concert in Sydney only being able to be
purchased by people in Australia), and some ticket websites have done this in the past. This method
is useful, but can hinder genuine consumers from being able to purchase the tickets if they are not
residing in the location but plan to visit.
Electronic Ticket Delivery
Some ticket sellers in the primary market are putting in place electronic delivery mechanisms that
make it harder to forward on resold tickets. Electronic tickets are typically sent directly to the
purchaser’s phone or electronic wallet. However, a screenshot can often be taken of the ticket,
allowing it to be onsold. In addition, the ability of the purchaser to still opt for a paper ticket over
electronic delivery reduces the usefulness of electronic tickets being used as an anti-scalping
measure.
Hold Backs on Ticket Distribution
In an effort to shorten the available window of time in which ticket scalpers have to receive and
forward on resold tickets, ticket sellers in the primary market can make a choice to only provide
tickets in the days or weeks leading up to an event. This increases the risk to ticket resellers and
ticket scalpers that they will not be able to provide tickets in a timely fashion for an event and
therefore can reduce the attractiveness of the practice.
Proof of Purchase and Proof of Identity Measures
For some events, generally small events where fewer than 2,000 tickets are sold, ticket sellers in the
primary market and venues will require the ticket purchaser to provide proof of identity or proof of
purchase (such as presenting the credit card used to purchase the ticket) to verify that they are the
original ticket purchaser. This measure reduces the ability of the original purchaser to onsell the
ticket, as the identity and credit card information used to purchase the ticket cannot be changed.
Allowing Refunds and Providing Exchange Mechanisms
Providing refunds to ticket purchasers who may no longer be able to attend an event reduces the risk
that those tickets will be onsold. Refunds remove the need for authorised resale by returning tickets
to the primary ticket market when they cannot be used. The terms and conditions reviewed by
Treasury did not provide for refunds beyond those provided in the ACL. Official ticket sellers
sometimes provide mechanisms for exchange where their tickets can be officially resold at face value
to other fans.
During the stakeholder consultation process most primary ticket sellers stated that they are generally
doing everything in their power to combat unauthorised ticket reselling and ticket scalping, especially
deploying the mechanisms noted above.
Our technology and the strategies we deploy are focused directly on placing the primary
ticket allocation into the hands of fans.
Confidential Submission
Consumer Education
Live Performance Australia Guides
LPA has developed guides to better educate consumers about where to buy official tickets and the
risks of buying from the secondary ticket market.
The LPA Safe Tix Guide provides tips for buying tickets safely and securely. The Guide offers advice to
consumers at all stages of the ticket buying process. The Guide is geared towards ensuring that
consumers seek out information that will help them to make a more informed purchasing decision.
Before consumers buy tickets, they are advised to: do their research, sign up for alerts from their
favourite artists, be wary of internet search engine results, get organised and don’t panic. During the
purchasing process, consumers are advised to: check the ticket that they are buying, read the terms
and conditions of purchase and pay by credit card (so that charge back facilities can be used if
something goes wrong). The Guide also provides advice on what consumers should do if things go
wrong (Live Performance Australia, 2017b).
The LPA Consumer Guide to Buying and Selling Tickets in the Ticket Resale Market provides guidance
to consumers on buying and selling tickets in the secondary ticket market and aims to help
consumers understand the ticket resale marketplace. The Guide provides information on the primary
ticket market, how the refunds and exchanges process operates, outlines options for onselling
tickets, and explains the secondary ticket market. The Guide also contains a checklist for buying
tickets in the secondary ticket market (Live Performance Australia, 2017c).
Official Ticket Seller Advice
Some ticket sellers in the primary ticket market also provide advice to consumers on the risks of
purchasing tickets in the secondary ticket market.
Ticketek produces a fact sheet about ticket resale and ticket scalping. The fact sheet is distributed to
all major venues as part of Ticketek’s consumer education program. The fact sheet warns consumers
about ticket scalping and the risks associated with purchasing from the secondary ticket market. The
fact sheet outlines the benefits of purchasing tickets from an official ticket seller and also provides
information to consumers on how they can lodge a complaint in the event that they find themselves
the victim of ticket resale or fraud.
Consumer Affairs Australia and New Zealand (CAANZ) Education Campaign
On 31 August 2017, CAF Ministers directed CAANZ officials to develop a consumer education
campaign as an interim measure to improve consumer understanding and awareness of the
secondary ticket market. The campaign ran for 6 weeks from March to May 2018.
The stakeholder consultation process found that there was broad support from stakeholders,
especially primary ticket sellers, for continued consumer education.
Education can lead to better audience satisfaction which has a direct cost benefit to
promoters, venues and ticketing agencies, provided it is framed in the correct way.
Balanced and factual education initiatives will assist the government and industries in
managing consumers expectations, and ensuring that those who are legitimately
affected can seek out the appropriate recourse under the ACL.
Confidential Submission
LPA Members believe that consumer education is important and necessary. It will require
a large campaign to reach infrequent ticket buyers (who are at most risk of being misled
or ill-informed about the secondary ticket market).
Live Performance Australia Submission
CAANZ’s Education and Information Advisory Committee is currently evaluating the CAANZ education
campaign.
Impact Analysis
Benefits
If the status quo is maintained, consumers benefit from still being able to access tickets to events
through the secondary ticket market. Access to the secondary market provides consumers with a
wider range of purchase options. Further, consumers’ understanding and awareness of the risks
associated with purchasing tickets in the secondary ticket market is enhanced as a result of the
consumer education campaign, allowing them to make more informed purchasing decisions.
Under the status quo, the existence of the secondary market would continue to provide a benefit in
terms of improving allocative efficiency in the ticket selling market. This is because ticket resale can
help to ensure that tickets are distributed to those who value them the most, because they allow
potential buyers to indicate how much they want to go to an event, or their willingness to pay.
Consumers and secondary ticket sellers will not face any additional compliance costs as a result of
maintaining the status quo and industry will continue to take industry-led actions to combat ticket
reselling practices where necessary.
Costs
The costs associated with maintaining the status quo result from the identified policy objectives not
being met. Notwithstanding the improved awareness generated by an information campaign,
maintaining the status quo will result in many consumers remaining confused about the market for
tickets and continuing to be potentially exposed to detriment.
Consumers need and want to know whether they are buying from the primary or secondary ticket
market. Consumers often find it difficult to identify who the official ticket seller is for a particular
event, and may not know how to go about finding this out without the use of a search engine that
can provide misleading results.
This is mitigated by the fact that the major ticket resale sites operating in Australia have complied
with the policy Google introduced in February 2018. This policy obliges resale sites that buy Google
‘AdWords’ advertising space to disclose that they are resale sites and that prices may be above the
face value (see the discussion of Option 4 for more detail on this Google policy).
However, under the status quo, consumers will continue to lack all the information that they require
to make an informed purchasing decision. Ticket resale websites often lack important basic
information about the tickets offered for sale; in particular, critical information such as the face value
of the ticket and the fact the ticket is being resold. The voluntary action by Google does not presently
extend to displaying the face value, and importantly, there are risks associated with relying into the
future on platforms voluntarily disclosing the fact of being a resale site.
If the status quo is maintained, consumers will continue to experience detriment from their
participation in the secondary ticket market and their exposure to risk remaining. Consumers will
also continue to have their fair access to tickets undermined by the use of ticket-buying bots.
While this RIS identifies existing consumer laws capable of applying to some practices in the
secondary market for tickets, there are limitations on their potential effectiveness in this context.
The current law can address circumstances where consumers are given incorrect information, or
information is withheld from them to create a false impression. However, this does not fully address
the identified problems about consumers lacking full information to make informed purchasing
decisions on resale sites and ticket-buying bots undermining fair access. In particular, the current law
does not prohibit using a bot to buy multiple tickets with the intention of reselling them for a higher
price.
Further, if the status quo is maintained, there will continue to be inconsistencies in ticket reselling
legislation across jurisdictions. As noted, the existence of different laws across jurisdictions creates a
burden for businesses and is confusing for consumers. Businesses can incur costs from having to
establish and operate separate webpages and verification processes for different jurisdictions,
including in relation to staff training. Consumers can experience detriment when they buy a ticket for
an event in one jurisdiction based on their expectations from experience in another jurisdiction.
However, it is also the case that under the change options in this RIS, differing State and Territory
requirements could continue to overlay a baseline level of regulation applying across Australia.
Compliance Costs
Maintaining the status quo would represent no change to the current regulatory environment.
Therefore, there are no additional compliance costs associated with maintaining the status quo.
Net Impact
There is no net benefit resulting from maintaining the status quo.
Summary Table of Benefits and Costs
BENEFITS COSTS
Consumers are still able to purchase tickets on the
secondary market.
No additional compliance costs are incurred by
sellers in the primary and secondary ticket markets
as a result of increased regulation.
Consumers’ understanding and awareness of the
risks associated with purchasing tickets in the
secondary ticket market will be enhanced through
consumer education if they come into contact with
the education campaign.
Despite the education campaign, the majority of
consumers will continue to be confused about the
ticket market because of the limited reach of the
consumer education campaign.
Consumers continue to lack all the information that
they require to make an informed purchasing
decision.
Consumers continue to experience detriment from
their participation in the secondary ticket market and
their exposure to risk continuing.
Industry would continue to take industry-led actions Consumers continue to have their fair access to
to combat ticket reselling practices. tickets undermined by the use of ticket-buying bots.
OPTION 2: NATIONAL PROHIBITION ON TICKET RESELLING
The ticket reselling market can play an important role by enabling consumers to on sell tickets that
they no longer need and to connect consumers who have a ticket with another consumer who places
a greater value on the ticket.
In 2004, De Atley estimated that the secondary ticket market in the United States alone was worth
around $12 billion (De Atley, 2004). While it is expected that that market has grown significantly
since 2004, there is no readily available or reliable data on its current size or value. Nevertheless, this
figure does suggest that the secondary market is valuable, with gains to be made by ticket resellers
and ticket scalpers. The value of the secondary ticket market in Australia is unclear, as there is no
firm data available to confirm its size and value. However, at present it appears that the Australian
market is still small, with only a handful of resale services operating. This is expected to grow as the
market matures.
However, while the secondary market plays an important role, some ticket reselling practices can
cause a number of consumer harms including being misled or deceived about the tickets that they
are purchasing due to information asymmetries in the secondary market which prevent them from
making informed purchasing decisions; exposure to the risk of ticket cancellation because of
contraventions of ticket terms and conditions; and exposure to potential scams and frauds because
unofficial ticket resale websites provide a platform for deception.
These problems could be partially overcome by shutting down the secondary ticket market entirely.
Under this option, the practice of ticket reselling, even at face value, would be completely prohibited
or banned. This option would make the act of ticket reselling illegal and the resale of tickets under
any circumstances an offence, with penalties applying. This option would attempt to shut down the
entire secondary ticket market and remove the ability to resell, even at face value.
Ticket reselling (generally without the consent of the event organiser) is prohibited in some
international jurisdictions, notably Spain and France. As noted, ticket reselling and scalping is
generally not illegal in Australia. However, there are certain circumstances where ticket scalping
activity may be illegal under State or Territory legislation. For example, Victoria and New South
Wales both have laws that make it an offence to resell tickets to certain events. In the case of
Victoria, the Minister needs to deem the event a ‘major event’ before the resale action can be
considered an offence. In the case of New South Wales, unauthorised ticket sales at a major event
venue or facility are prohibited, however the Minister must declare what is a major event venue or
facility, and the prohibition does not apply to online based sales. If Commonwealth legislation were
to be introduced prohibiting ticket reselling, this legislation would likely override existing State and
Territory laws.
A prohibition or ban on ticket reselling would need to apply to both in-person and online sales for it
to be effective. Enforcement of in-person ticket reselling is likely to be a more straightforward task
than enforcement of online ticket reselling. As noted, the costs of establishing online ticket reselling
platforms is low and these websites can generally be established outside Australia, making
enforcement difficult. The United Kingdom’s Independent Review of Consumer Protection Measures
Concerning Online Secondary Ticketing Facilities (the Waterson Review) found that:
It is now relatively easy for a UK seller and a UK buyer to complete a ticket resale
transaction for a UK event over a ticketing platform owned by a multinational company
with no presence in the UK. As a result, some jurisdictions have been reviewing their
regulatory legislation on “touting” or “scalping” to reflect the borderless reality of the
internet. While in others, such as Germany, event organisers seek injunctions against
online exchanges for breaches of their own ticketing terms and conditions. It follows
from this that simply banning the operation of secondary sites in the UK would not solve
perceived problems with the secondary ticketing market; any more than the banning of
secondary ticketing sales in France means that such sales do not take place; they do
(Waterson, 2016, p. 119-120)’.
In addition, given that several sellers in the primary market have established their own resale
platforms, this implies that there is tacit approval of such activities to a certain degree.
The stakeholder consultation process found that there was very little support for a prohibition on
ticket reselling, with many acknowledging that a prohibition would punish consumers.
[This] measure would likely have the perverse outcome of unfairly penalising genuine
consumers who may have a change of plans or circumstances that mean their tickets are
no longer usable and could legitimately be transferred to another party.
Live Music Office Submission
While some primary ticket sellers expressed provisional support for a prohibition, all acknowledged
that a prohibition is not a viable solution. Similarly, secondary ticket sellers did not support a
prohibition as it would put them out of business. Secondary ticket resellers also noted that a black
market would be created if a prohibition was introduced, or ticket resellers would move offshore and
out of the reach of regulators.
An outright prohibition on ticket resale will simply move the market underground, where
consumers will have significantly less protection in the event that something goes wrong.
Aside from an outright ban being the harshest and most unrealistic possible anti-resale
measure introduced in the world, it would be entirely unenforceable, given jurisdictional
issues associated with overseas resale platforms, and significant enforcement costs.
The TBA would point to the example of the London Olympic Games in 2012, wherein
major resale bans were legislated for by the British Government. The ultimate result was
a compliance cost of some £20 million, with no appreciable reduction in ticket resale.
Ticket Brokers Association of Australia Submission
Belgium implemented legislation in 2013 that strictly prohibited consumers from
reselling tickets at a higher price than the original sale price…Belgium has also seen a
huge increase in rogue websites purporting to sell tickets and the consequential instance
of fraud against the consumer. The legislation has placed the risk squarely at the feet of
the consumer to identify that resale is illegal and that they are purchasing from an
offshore website, which they either do not know or do not care about they just want
the ticket to see their favourite act.
Confidential Submission
Further, as noted previously, most consumer respondents noted how much they value the secondary
ticket market because they enjoy having options to resell their tickets when they can no longer
attend an event, and would not support a prohibition.
Impact Analysis
Benefits
The benefits associated with this option are that consumers will be less exposed to the risks involved
in purchasing tickets in the secondary ticket market that is, the risk that they are purchasing
fraudulent tickets and the risk that their ticket may be cancelled because of ticket reselling. In
essence, consumers would have more confidence that they are purchasing tickets from official ticket
sellers because these sellers will legally be the only sellers that can provide tickets to events.
Considering the impracticability of monetising the value of confidence and certainty in this context,
the benefits of this increased confidence and certainty are unquantifiable.
A prohibition on ticket reselling would also ensure that consumers are only paying face value for
their tickets. Evidence provided by industry suggests that the average uplift on resold tickets is
around $86.00. With a ticket resale market selling around 350,000 tickets per year, the savings to
consumers could be in the order of $30.1 million if a prohibition is introduced.
However, a prohibition on ticket selling will not completely remove the risks associated with ticket
resale, as it is likely that a ban would not shut down the secondary market entirely. Instead, the
activity is more likely to be forced into the black market or move offshore where consumers have no
protections at all.
In addition to reducing the risks associated with ticket reselling, a prohibition on ticket reselling
would result in a nationally consistent approach to ticket resale, providing consumers and ticket
sellers across Australia with greater clarity and certainty. States and Territories have different laws in
relation to ticket resale which can result in reselling behaviour simply being conducted across state
borders out of the reach of the authorities. Considering the impracticability of monetising the value
of clarity and certainty in this context, the benefits of a nationally consistent approach are
unquantifiable.
Costs
The costs associated with this option are that consumers would have less choice in relation to ticket
purchase. As noted, consumers value having access to a secondary ticket market for a number of
reasons including convenience, time saving and avoiding ‘the hysteria’ of the ticket sales process
(CHOICE, 2017, p. 10). In addition, the secondary market is also useful for ‘late movers’ who may
have reason to delay their purchasing decisions. More ticket resale options can increase market
efficiency because secondary markets create channels where tickets go to the consumers who value
them the most (Courty, 2003, p. 85). Further, the Waterson Review found that a large proportion of
tickets sold on secondary resale sites were actually priced below their face value, offering a useful
service to ticket sellers and consumers alike, and allowing more people to attend an event
(Waterson, 2016, p. 136). Considering the impracticability of monetising the value of consumer
choice in this context, the costs associated with consumers having less choice are unquantifiable.
A prohibition on ticket reselling would prevent consumers who genuinely need to onsell their tickets
(because they can no longer attend an event) being prohibited from doing so. This would result in
these consumers suffering losses that they cannot recoup or partially recoup. The operation of a
secondary ticket market allows these consumers to at least obtain some recompense and also allows
other consumers who may value the tickets to attend. Given the difficulty in identifying the volume
of ticket resales that occur because a person genuinely can no longer attend an event, as well as the
subjectivity of the benefit a consumer derives from being able to buy a resold ticket they could not
otherwise obtain, the costs associated with losses from being unable to resell tickets is
unquantifiable.
Further, a prohibition on ticket reselling may cause consumers to delay their ticket purchase until
closer to the day of the event, until they are certain that they can attend. A lack of early sales may
result in certain events being cancelled and this could affect the financial viability of the live event
industry. Similarly, it could have an impact on the cash flows of primary ticket sellers.
A prohibition of ticket reselling would also likely create a black market for tickets, and would see
ticket reselling and ticket scalping behaviour move into the black market or offshore where
consumers have no protections at all. An act is considered to be part of the black market economy if
it violates formal rules imposed by government. There are a range of problems associated with the
operation of black markets including underreported economic activity, lost tax revenues, welfare
loss, corruption in society and unfair competition.
The potential development of a black market reflects the importance of the secondary market to
consumers consumers genuinely value access to the secondary market.
The operation of a black market increases the risk of fraud to consumers. At present, consumers who
engage with sellers in the secondary ticket market are protected by the ACL (where the seller is ‘in
trade or commerce’) and have access to a range of remedies should they experience detriment as a
result of a breach of the law. If ticket reselling were to be prohibited and move into a black market,
consumers would be exposed to risks with no avenues for recourse and no access to justice. In
addition, consumers currently also have access to other remedies such as credit card chargebacks
that can be used in the event that a promoter or event ‘goes bust’. However, if ticket reselling was
prohibited, these avenues would no longer be available as a remedy.
A further source of costs associated with a prohibition on ticket reselling is the resources that would
be required to put in place a stronger enforcement regime. Regulators would need to dedicate
resources to efforts to prevent ticket resale activity resurfacing in the black market, and to detect it
and take action when it does.
Compliance Costs
A prohibition on ticket reselling would make the practice illegal, therefore the secondary market for
tickets is shut down and resale businesses can no longer operate. If resale businesses are not
permitted to operate, they will face no compliance costs.
Net Benefits
A prohibition on ticket reselling will partially address the identified problem. A prohibition will ensure
that consumers are provided with correct ticketing information in the short term because only
official ticket sellers will be permitted to operate. Consumers will also not experience reductions in
their welfare in the short term because they will not be paying an uplift above the face value. A
prohibition on ticket reselling will also reduce the risks that consumers face from potential fraud and
scams.
However, it is expected that the benefits associated with a prohibition of ticket reselling will
ultimately not significantly outweigh the costs of a prohibition. While consumers will experience
savings in the short term by not paying an uplift on the price of tickets, a prohibition will not stop
ticket reselling behaviour because ticket resellers will move their operations into black markets
where consumers would have no access to consumer protections. The costs of consumers not having
access to consumer protections are thought to be sizeable.
Summary Table of Benefits and Costs
BENEFITS COSTS
Consumers face less risk when buying tickets to
events because they can only legally purchase
them through the primary ticket market.
A nationally consistent approach to ticket resale is
adopted, providing consumers with greater clarity.
Consumers have less choice in who they purchase
their tickets from.
Consumers who genuinely need to onsell their
tickets cannot do so and therefore suffer losses.
Consumers may delay their purchase until closer to
the event until they are certain that they can attend.
A lack of early sales may result in certain events
being cancelled and the event industry suffering
losses.
A black market for tickets would likely be created.
Resources would be required to put in place a
stronger enforcement regime.
OPTION 3: RESTRICTED RESELLING
As discussed in Option 2, the ticket reselling market plays an important role that is valued by
consumers. However, certain practices in the market can result in consumer dissatisfaction. The
nature of ticket markets is that there is an inelastic or limited supply of tickets because of the
physical capacity of venues. When there is a limited supply, the willingness to pay of consumers
changes in line with their preferences to see an event. The stakeholder consultation process
confirmed that consumers are willing to pay more for tickets to events that they highly value. The
stakeholder consultation process confirmed that the primary cause of consumer dissatisfaction
typically arises not when the consumer completes the transaction because they have confirmed
their willingness to pay by completing the sale but when the consumer discovers that they have
paid more than the face value of the ticket, resulting in feelings of being “ripped off”. At the time of
purchase, the consumer is willing to pay the inflated ticket price as illustrated by their purchase
decision. Therefore, consumers’ own perceptions of their willingness to pay shift with the discovery
of this additional information.
A secondary cause of dissatisfaction amongst consumers is not being able to acquire the best tickets
at a price that matches their willingness to pay, despite other tickets still being available in the
primary market.
A recent survey of consumers conducted by CHOICE indicated that the vast majority of consumers
that were surveyed indicated they had paid more than the face value of the ticket, with only a small
amount of consumers indicating that they had paid less than the face value (CHOICE, 2017, p. 7 and
18). Some secondary ticket sellers noted that not all tickets sell above the face value on the
secondary market and those that do sell above the face value were not experiencing huge markups:
On StubHub.com approximately 50 per cent of all tickets are sold at or below face value.
eBay | StubHub | Gumtree Submission
The average uplift [on our platform] is around $86.00 above the face value.
Confidential Submission
Some parts of the entertainment industry have expressed concern about inflated and expensive
ticket prices and the impacts of this on consumers. In particular, some artists and event promoters
have noted that inflated ticket prices reduce fair access for genuine fans. This has led to some artists
supporting ticket reselling platforms that only resell tickets at the face value or at the face value plus
a small mark-up, such as Twickets. Further information on face value selling is in Box 5.
BOX 5: ‘TWICKETS’ AND THE FACE VALUE TICKET SELLING MODEL
Twickets is a fan-to-fan ticket trading platform that enables users to buy and sell spare tickets to
events at no more than face value. The site brands itself as a safe and secure place for fans to
exchange tickets. Twickets partners with some of the biggest names in music, who endorse the
company’s mission to combat hiked-up prices and unethical resellers.
ensure that it is not listed above the face value. The site also posts information such as the venue,
the section and the row of the seat associated with the ticket.
extensive database of events. The site allows the seller to add an additional fee of up to 15 per cent
to cover the original booking fee and transaction costs. The seller can then select the delivery option
that they would like to offer buyers, including post, drop and collect, meet up and download. The site
allows the seller to choose an option that will ensure that the buyer receives the ticket on time and
urges sellers to deliver tickets to buyers promptly.
Payment occurs through PayPal or a bank account transfer, depending on the event. The site
provides a guarantee around the transaction.
Twickets does not charge transactions fees to sellers of tickets, however booking fees are sometimes
applicable to the buyer.
Restricted reselling and price caps or ceilings are often presented as a solution ‘to avoid consumers
being exploited by those with no interest in music or the artist, other than making an excessive
profit(Waterson, 2016, p. 148). The purpose of a price ceiling is to protect consumers of a certain
good or service by establishing a set maximum price in a market. In the case of tickets, this set price
would be the face value of the ticket. As previously noted, the face value of a ticket does not reflect
the true value of the ticket, as event promoters and primary ticket sellers actively engage in the
practice of underpricing. The true value of the ticket therefore, lies in the price that someone is
willing to pay for it.
Advocates of restricted reselling have argued that ‘a cap would reduce the prevalence of touts,
brokers, professional sellers in the market and particularly the incentive to invest in ‘bot’ technology
to acquire the most lucrative seats at high demand events(Waterson, 2016, p. 148).
The stakeholder consultation process found strong consumer support for restricted reselling:
Personally I think that legislation should be put in place that limits the cost of the tickets
being resold to a maximum value of their original price. That is, no one should make a
profit on the resale of tickets. The resale of tickets should only be for people who for one
reason or another can no longer attend the event. The price should be no greater than
the cost originally paid.
Consumer Comment
My feeling is that all scalpers/reseller websites should be banned and that selling a ticket
unless through the original source at the original price should be made illegal and mean
that the ticket becomes void or worthless.
Consumer Comment
I completely agree with stopping the practice of onselling tickets at a profit. I support an
avenue where people who genuinely cannot attend an event can resell their tickets for
face value including booking fees, but not with any sort of mark-up.
Consumer Comment
Similarly, some primary ticket sellers, promoters and sport and entertainment industry
representatives were also in favour of restricted reselling:
The majority of members do not support the ability to profiteer from ticket resale. Some
members believe capping the resale price to the face value of the ticket will be simpler
and more transparent; allowing for some mark-up would cause confusion. Other
members are sympathetic to allowing the recovery of any associated costs.
Live Performance Australia Submission
We support this approach because whilst a national prohibition would be not only
unworkable and also have unintended consequences, having no limit on resale prices has
been found to have impacts not only on consumers but also on venues and artists. It is
our experience that as inflated tickets appear on the secondary market that this
interferes with the normal operation of venues, as subsequent customer complaints and
issues arise. Artists may be unfairly impacted by heavily inflated prices as they miss out
on legitimate income generated from their work.
Live Music Office Submission
Some ticket resellers have publicly stated their beliefs that price caps are not a solution and do not
work. In April 2017, StubHub, a ticket resale website owned by eBay, warned the Government of
Ireland that measures to limit ticket prices in the market would be easily avoidable. StubHub noted
that price caps do not work because ‘they drive resale onto the streets and other parts of the
internet where this is no consumer protection’ (Flynn, 2017). Similarly, ticket reseller Viagogo, in
testimony to a 2014 Senate Committee on Ticket Reselling, also noted that ‘the concept of imposing
price caps, while well intentioned, just results in sellers reverting to selling their tickets in places
where price caps cannot easily be enforced, and where the chances of consumers having a bad
experience are high (Senate Economics Committee, 2014, p. 31)’.
The stakeholder consultation process found that ticket brokers, corporate and hospitality services
and secondary ticket sellers do not support restricted reselling:
There will be a vastly reduced business case to staying in the secondary ticket market. A
cap on resale reduces the business case for legitimate marketplaces as sellers will sell
from offshore websites where there is no cap and the buyer will follow the ticket
inventory offshore.
Confidential Submission
While restricted reselling practices are not common, there is some evidence of their use in
international jurisdictions such as South Africa, New Zealand, Norway and parts of the United States.
New York State’s reselling restriction laws are some of the oldest in the world and are outlined in
detail in Box 6. The New York experience illustrates the failure of price caps to prevent ticket scalping
behaviours. Restricted reselling laws and price caps have been instituted in some
Australian jurisdictions Victoria, Queensland, South Australia, New South Wales and the
Australian Capital Territory however, these generally require a major event to first be declared
before the reselling restrictions apply.
BOX 6: RESTRICTED RESELLING LAWS IN NEW YORK STATE
From 1920 to 2007, the US state of New York had in place strong anti-scalping measures in the form
of restricted reselling laws. In the early years of the policy, reselling was capped at $US2.00 above the
2006, p. 7). In addition, the resale restriction was required to be printed legibly on each ticket:
If the venue to which this ticket grants admission seats 6000 or fewer persons, this ticket
may not be resold for more than 20% above the price printed on this ticket, whereas if the
venue to which this ticket grants admission seats more than 6000 persons, this ticket may
not be sold for more than 45% above the price printed on the face value of this ticket
(Schneiderman, 2006, p. 7).
General found that the laws were difficult to enforce and inconsistently enforced, with underground
ticket scalping flourishing (Schneiderman, 2006, p. 7).
In 2007, the State repealed its long standing reselling restrictions, citing a failure to prevent ticket
scalping behaviour, the practical inability of undertaking meaningful enforcement, and a recognition
that free market industry solutions could more effectively combat problems that arise from ticket
scalping. The repeal of the laws allowed ticket resellers and ticket scalpers to operate openly and sell
tickets at whatever prices consumers were willing to pay. The hope of the repeal was that allowing
greater competition in the resale market would see a decrease in secondary prices. In addition, it was
hoped
resellers was introduced. The licencing system required various disclosures of tickets sold, the
posting of a $25,000 bond to cover counterfeit tickets, and the payment of an annual
$5,000 registration fee (Schneiderman, 2006, p. 7-9).
restrictions had not worked. Instead, competition-driven savings intended to benefit fans had instead
been converted into profits by ticket scalpers. The report recommended reintroducing some form of
restricted reselling. However, the report notes the difficulties of enforcing restricted reselling laws.
In June 2018, new ticket resale laws were introduced in New York which impose requirements for
online resale marketplaces to disclose that the website is for the secondary resale of tickets and that
the price may exceed the established price. The new laws also provide that any ticket reseller who
knowingly uses bots or other ticket purchasing software may lose their license and be barred from
licensure as a ticket reseller for up to three years. This applies in addition to the existing prohibition
on the use of bots.
In the United Kingdom, the Waterson Review examined the issue of a cap on resale prices at a
particular level and concluded that there was no convincing evidence that a price cap is an
appropriate solution. The Review concluded that:
The history of price caps in other spheres is not a propitious one, particularly where the
set of sellers is not well defined; people find a way around them…there is an increased
likelihood of sellers moving abroad in order to circumvent the cap…it would be of limited
effect since there are rapidly changing routes to market, including social networking
sites, some of which are based in other jurisdictions, meaning any legislation would be
extremely difficult to police or future-proof (Waterson, 2016, p. 22-23).
Similarly, the Waterson Review also cautioned against the setting of price caps with an additional
premium, as it can legitimise and encourage the mark-up.
Finally, suppose a price limit were imposed at say 10% or 20% of the full face value ticket
cost including face value and fees. This is a substantial margin for any business, albeit
less than the mark-up on the current secondary ticketing sites. Imposing a mark-up limit
in the absence of primary ticketing market controls in effect legitimises through
legislation the operator who makes multiple purchases from the primary site in order to
themselves operate a secondary ticketing site charging the full mark-up, plus whatever
fees are allowed by the legislation. This would not alleviate the concerns of an event
organiser who opposes secondary ticketing sales on moral grounds. It would not have a
substantially different effect on the market from the case where a primary operator
chooses a particular secondary ticketing partner and imposes restrictions on it directly
(Waterson, 2016, p. 151).
Waterson also noted the difficulties that arise in enforcing price caps:
Most importantly, there is a question of who would enforce the cap and what resources
they would employ. Merely declaring there to be a cap is not sufficient. Price caps in
Britain are most often enforced by dedicated, substantially staffed regulators dealing
with a clear set of established companies subject to their regulation. My feeling is that
such a body would only be merited in circumstances where very substantial and
sustained evidence of (the potential for) market manipulation was present. It would also
exonerate the primary market from complicity in creating the circumstances behind a
substantial secondary ticketing market (Waterson, 2016, p. 22-23).
3(a) Face Value
Under this option, ticket reselling would be restricted to the selling of the ticket at the face value
only. The face value is the value printed or depicted on the ticket to indicate its official purchase
price. Under this option, there would be nothing preventing the sale of the ticket for less than the
face value. The Ticket Brokers Association noted that it is not always clear what the face value of the
ticket is, as not all types of tickets have the face value clearly printed on the ticket:
Adding to the confusion is the fact that members seasons tickets (e.g. ANZ Stadium, AFL
members tickets) often have $0 as the face value, despite members spending up to
several thousand dollars annually on a membership.
Ticket Brokers Association Submission
Restricting resale of the ticket to the face value would require individual sellers in the secondary
ticket market to ensure that their tickets are not advertised or sold for amounts above the face
value. In addition, businesses that facilitate the resale of tickets in the secondary market, such as
ticket reselling platforms, would also need to ensure that tickets are not advertised or sold on their
sites for amounts above the face value.
Ensuring that tickets are not sold for amounts above the face value of the ticket would require the
ticket reselling platform to be able to verify the face value of each individual ticket sold, since ticket
prices to a single event can vary based on seating arrangements. It is unclear what may be the best
mechanisms for verifying the face value of tickets, though there may be several methods of
verification including obtaining the information from the primary ticket seller or their website,
requiring the ticket seller to verify the face value of the ticket through some kind of authentication
measure (such as providing proof of purchase or a receipt), or simply relying on the seller to include
the correct face value when registering the ticket for sale. Verifying the face value of the ticket to
ensure that it is sold for no more than the face value will likely create compliance costs for ticket
reselling platforms.
The compliance cost estimates in this RIS assume verification would occur by the platform requiring
the individual reseller to input the face value and an individual employed by the platform operator
then checking this against publicly available information or photo evidence submitted by the user.
The stakeholder consultation process did not result in firm conclusions as to the question of
verification, with some stakeholders noting difficulties while other held a view that verification would
be an easy and straight forward process:
Given that the face value of an event ticket can change at any time (i.e. event organisers
retain the contractual right to ‘dynamically price’ or otherwise vary ticket prices and
ticket categories) it would be difficult for administrators of resale platforms to, firstly,
verify what is the actual face value of the ticket, and secondly, whether the face value
has been accurately represented by the seller.
Ticket Brokers Association Submission
[Stakeholder] recommends that the face value of the ticket should be verified by the
secondary platform. Price verification is not unduly onerous ticket prices are often well
advertised on the primary ticket (whether physical or digital) and on the authorised
promoter, ticket seller and artist websites. Verification could be achieved by reviewing
any of these sources.
Confidential Submission
3(b) Face Value Plus 10 Per Cent
Under this option, ticket reselling would be restricted to selling the ticket at the face value plus a
10 per cent premium. The addition of a 10 per cent premium is designed to cover the costs
associated with reselling the ticket, such as postage and handling. The 10 per cent premium would be
an absolute cap, so if postage and handling costs were greater than 10 per cent of the face value,
these would not be covered. During the stakeholder consultation process, some stakeholders noted
difficulties with a 10 per cent premium above the face value:
The sales commission alone charged by Viagogo, Ticketmaster Resale and StubHub is
close to 25 per cent of the sale value. This means that a consumer who can no longer
attend an event, and who lists their ticket for sale, will be unable to recoup their
investment even if they list their tickets at face value or at an arbitrary 10 per cent
premium.
Ticket Brokers Association Submission
A 10 per cent cap may not be sufficient to cover delivery of hard tickets, in some cases,
particularly low-value tickets. Signature on delivery is considered ideal to assist in
ensuring the buyer receives what they paid for, and to reduce instances of others
receiving tickets which they have not paid for. For example, a pre-paid Parcel Post
envelope with signature on delivery is $11.45, while express is $14.30. Given the above,
restricted reselling can lead to a higher amount of transactions happening in person. One
of the benefits of online resale transactions is that it reduced the need for people to meet
up to exchange tickets for money. In person transactions can lead to other types of
criminal behaviour such as theft and assault.
Confidential Submission
As with the option to limit the resale of tickets to the face value, this option would also require ticket
reselling platforms to ensure tickets are not advertised or sold for amounts above the face value plus
a 10 per cent premium. This option raises the same verification issues as with face value only selling.
There are several international jurisdictions that cap the resale value of the ticket to the face value
plus a premium including New Zealand and parts of the United States. The Canadian province of
Ontario has introduced a new Ticket Sales Act, which commenced on 1 July 2018, but has suspended
the portion of this law that would have imposed a price cap on resold tickets of 50 per cent above
face value.
In addition, New South Wales has recently legislated to restrict ticket reselling to the face value of
the ticket plus transaction costs up to a maximum of 10 per cent. Details of this new law are outlined
in Box 7.
BOX 7: NEW SOUTH WALES TICKET RESELLING LAWS
On 1 June 2018, new laws commenced in New South Wales restricting ticket reselling to NSW events.
The laws introduce price limits in the secondary ticket market and include a prohibition on the resale
of tickets above the original acquisition cost of the ticket (including any transaction costs not
exceeding 10 per cent). The law also includes a prohibition on the publication of an advertisement for
ticket resale above the original ticket sale price plus 10 per cent. In addition, the law also includes a
prohibition on event organisers cancelling tickets on the basis that they were resold if the tickets are
resold below the restricted price level.
The 10 per cent price restriction only applies to tickets for sporting or entertainment events in NSW
that are subject to terms and conditions that limit the circumstances in which a ticket may be resold
or that prohibit resale altogether. This aims to ensure that tickets to amateur and local event tickets
are not covered.
Under the law, artists, promoters, venues and ticketing agencies will be provided with the ability to
take court action against anyone who breaches the prohibition. In addition, New South Wales Fair
Trading will also be able to take enforcement action to investigate and address any alleged breaches.
Impact Analysis
Benefits
The benefits associated with restricted reselling options are that consumers wishing to buy tickets to
events are still provided with a range of options, including purchasing in the secondary market, and
those consumers who need to onsell their tickets for genuine reasons (such as no longer being able
to attend the event) are permitted to do so and still have avenues available to do so.
In the absence of reliable estimates of the costs to consumers of using alternative channels (i.e. the
black market that a resale ban would generate), and in light of the subjectivity of the benefit a
consumer derives from buying a ticket priced above face value, the benefits associated with
consumers having ongoing access to the secondary ticket market are unquantifiable.
Further, consumers may benefit from restricted reselling regulations in the short run because they
will be protected from being exposed to inflated or excessive ticket prices. However, importantly,
consumers will only be protected until such time as a black market for resold tickets is created. As
with a prohibition on ticket reselling, restricted reselling at face value could result in savings to
consumers in the order of $30.1 million.
Costs
Restricted reselling practices also reduce market efficiency. Ticket reselling practices can improve
allocative efficiency in the ticket selling market ticket resellers can help to ensure that tickets are
distributed to those who value them the most, because they allow potential buyers to indicate their
willingness to pay. A cost associated with restricted reselling options is that restricted reselling will
likely result in market inefficiencies, with tickets not necessarily being allocated to those consumers
who value them the most (those consumers who have the greatest willingness to pay). Rather,
tickets will likely go to those consumers who move to purchase tickets early during the sales period.
Late movers may miss out on tickets, even when they may value those tickets more highly than first
movers. Again, this reduction in market inefficiency will only persist until the creation of a black
market.
Restricted reselling practices may also reduce competition in the secondary ticket market. If
potential profits are reduced by the introduction of a price cap, the incentive to enter the ticket
resale market will be reduced. Competition in the secondary ticket market gives consumers options
in relation to the purchase of tickets and creates more dynamic markets where resellers can compete
on price. In their submission to the consultation process, StubHub noted that:
Reputable resellers provide an element of competition in the marketplace and are
fulfilling consumer demand…a competitive secondary market provides additional access
points for fans to attend live events.
eBay | StubHub | Gumtree Submission
Where restricted reselling is put in place, ticket reselling platforms are in the best position to ensure
that their sellers follow the law. They can make changes to their ticket selling platforms to ensure
that tickets are not sold above the terms of the restricted resale. As a result of this, ticket selling
platforms in the secondary market would face increased compliance costs.
As with a prohibition on ticket reselling, restricted reselling options will not stop the practice of ticket
scalping. If a price cap were applied to the secondary ticket market, it will result in the creation of a
black market due to the existence of excess and unfulfilled demand for particular classes of tickets. If
this were to occur, consumers would lose access to the consumer guarantees in the ACL.
If a consumer makes an informed decision to purchase a ticket that is above face-value
there is no public policy reason as to why they should not be able to do that. Whether
they choose to pay that price will depend on whether they want to go to the event. If the
secondary ticket-market is in effect banned or unduly restricted, this will force sales
‘underground’ in which case consumers will not have any protections that are currently
available to them.
eBay | StubHub | Gumtree Submission
Further, this option would likely not prevent ticket reselling platforms from including additional fees
and charges associated with the ticket sale, such as booking fees, and existing booking charges may
be increased as ticket resellers move to protect their profits.
Compliance Costs
Restricted reselling is estimated to generate a total compliance cost of $20.2 million over 10 years.
This consists of a one-off system and platform redesign costs of $99,000 and ongoing ticket
information verification costs of $20,064,000 over a 10 year period.
Under this option, ticket resale websites will need to redesign their sites to allow users to input the
face value of the ticket into a web form and to allow the ticket system to include a 10 per cent mark
up on that face value to cover postage and handling costs. It is also assumed that in order to ensure
that they are compliant with the law to only resell tickets at face value (plus 10 per cent), these sites
would need to verify the face value that individual ticket resellers have inputted into the ticket
reselling system. This would require a person employed by the ticket reselling platform to verify the
face value of the ticket (on the primary ticket seller website or viewing photo evidence submitted by
the user).
Net Benefits
Restricted reselling laws will partially address the identified problem. Restricted reselling laws are
unlikely to contribute to more informed consumers, however they will go some way to ensuring that
consumers experience smaller reductions in their welfare in the short term because they will not be
paying an uplift above the face value. Restricted reselling laws are unlikely to reduce the risks that
consumers face from potential fraud and scams.
It is expected that the benefits associated with restricted reselling will ultimately not significantly
outweigh the costs associated with such a restriction. While consumers will experience savings in the
short term by not paying an uplift on the price of tickets, the effectiveness of restricted reselling laws
are questionable and can be easily avoided by ticket resellers moving their operations into black
markets or offshore where consumers would have no access to consumer protections. The costs of
consumers not having access to consumer protections are thought to be sizeable.
Summary Table of Benefits and Costs
BENEFITS COSTS
Consumers are still able to purchase tickets on the
secondary market.
Consumers who genuinely need to onsell their
tickets can still do so.
Consumers may be able to increase their level of
consumption of events over time.
Consumers are somewhat protected from paying
‘inflated’ or ‘excessive’ ticket prices until such time
as a black market is created.
Restricted reselling may result in market
inefficiencies, with tickets not necessarily being
allocated to those consumers who value them the
most.
Restricted reselling where a mark-up or premium is
used can legitimise and encourage charging up to
the full mark-up level.
A black market for tickets would be created.
Secondary ticket reselling platforms face
compliance costs associated with updating their
websites to put in place mechanisms that prevent
sale at prices above the face value or face value
plus 10 per cent.
Secondary ticket resellers face compliance costs
associated with verifying face values.
Resources would be required to put in place a
stronger enforcement regime.
OPTION 4: IMPROVED DISCLOSURE ARRANGEMENTS FOR
TICKET RESELLERS (PREFERRED OPTION)
The purchasing of tickets to live performances and sporting events in Australia can be a difficult and
confusing process for some consumers. There can often be a lack of clarity around how and from
whom consumers should purchase their tickets, how many tickets are available to a certain event
and at what price those tickets are available for purchase. The secondary ticket market creates
opportunities for consumers to be exploited when they do not have enough information to make
informed purchasing decisions.
In order to make more informed purchasing decisions, consumers would benefit from the disclosure
of certain types of information. Under this option, ticket reselling platforms would be required to
disclose the fact of being a resale site (rather than the official or original seller) and the face value of
tickets being resold. Additionally, information about seat location and any restrictions on a ticket
could also be mandated, depending on the final design of the proposed policy.
Firstly, a disclosure by the ticket reseller that they are indeed a reseller is a useful piece of
information for consumers to know. As noted, anecdotal evidence suggests that most consumers
who purchased tickets through ticket resale websites before early 2018 were not aware that they are
buying those tickets from unauthorised sellers for prices generally above the original face value of
the ticket. Ticket resale websites can look and feel like official ticket seller websites, misleading
consumers into thinking that they are buying their tickets through official channels. Therefore, it may
be useful to require ticket resellers to prominently disclose that they are not an official ticket seller
before they enter into transactions with consumers. Examples of potential reselling site disclosures
are outlined in Box 8.
BOX 8: EXAMPLES OF POTENTIAL DISCLOSURES
Below are examples of potential disclosures for ticket reselling platforms:
WARNING: THIS SITE IS NOT AN OFFICIAL TICKET SELLER.
THIS SITE IS A TICKET RESALE SITE.
*
THIS SITE IS A SECONDARY TICKET RESELLER.
*
THIS SITE IS NOT AN OFFICIAL TICKET SELLER. THIS SITE IS A
TICKET RESALE SITE.
Secondly, a disclosure about the characteristics of the ticket is also useful information for consumers
to know, such as the face value of the ticket.
Google updated its advertising policies as they apply to secondary ticket sellers in February 2018. In
its submission to the stakeholder consultation process Google noted:
In November 2017, Google announced a global policy change that will help protect
buyers of event tickets from unclear information or unexpected fees and negative
experiences, and, ultimately, benefit legitimate resellers of event tickets. The change,
which will take effect from early February 2018, requires event ticket resellers to be
certified by Google before they can place ads on Google platforms.
Google Submission
The changes made by Google primarily focus on requirements for information disclosure. Google has
also publicly indicated its intention to make a second set of changes, which would require resellers to
display the face value of tickets alongside the resellers price so that purchasers can make an
informed decision. Importantly, the changes outlined by Google only apply to ticket resellers when
they use Google’s paid advertising services like AdWords. Further information on Google’s new
requirements for secondary ticket sellers is outlined in Box 9.
BOX 9: GOOGLE’S NEW APPROACH TO ADVERTISING OF EVENT TICKETS ON GOOGLE
PLATFORMS
To be certified, resellers must demonstrate they meet the following requirements:
must disclose to customers that they are a reseller.
Disclosures are required to be prominently viable and clearly explained in the top 20 per cent of
the resellers website, including the home page and any ad landing pages. The provisions also
apply to mobile applications.
An effect of this change is that resellers cannot use the word ‘official’ in ads placed on Google
platforms, or include the artist or venue name in the Uniform Resource Locator (URL) of a website
linked to an advertisement.
Resellers must tell customers that prices may be higher than the face value of tickets (the price
offered by the primary provider)
and taxes included in the price during checkout and before the customer provides payment
information.
The major ticket resale sites operating in Australia have complied with the February 2018 Google
policy change. Box 10 illustrates how secondary ticket sellers have met the disclosure requirements
in the Australian marketplace.
BOX 10: EXAMPLES OF STATEMENTS USED BY RESELLING PLATFORMS TO COMPLY WITH
GOOGLE’S RESALE POLICY
Below are some examples of the statements being used by major secondary ticket sellers in the
Australian market following the change to Google’s ad policies. All statements are displayed at the
top of website landing pages.
Viagogo
“We’re the world’s largest secondary marketplace for tickets to live events. All tickets are fully
protected by our guarantee. Prices are set by sellers and may be below or above the face value”.
Ticketmaster Resale
Our marketplace includes resale tickets. Prices are set by the ticket seller, and may be above or
below face value”.
StubHub
“StubHub is the world’s top destination for ticket buyers and resellers. Prices may be higher or lower
than face value.”
Ticket Blaster
“Secondary Ticket Marketplace | Prices may be above or below face value”.
Queen of Tickets
“Queen of Tickets is an Australian based company engaged in the secondary resale of tickets to
concerts and sporting events. Ticket prices may be higher or lower than the original purchase price.”
Note that Ticketmaster Resale only displays this statement when the user accesses the site via an
AdWords advertisement (on other sites e.g. Viagogo the statement appears regardless of how the
user accessed the site).
Requiring the disclosure of certain information is aimed at reducing information asymmetries in the
secondary ticket market and providing consumers with the information that they require to make an
informed purchasing decision. For example, if a consumer is advised of the original face value of the
ticket alongside the price that the ticket reseller is selling the ticket for, then they can make a more
informed judgement about the inherent value of the ticket and also their own willingness to pay.
The stakeholder consultation process found that there is strong support for improved information
disclosure:
For consumers to make an informed decision about their purchase, these websites
should clearly indicate to a consumer that they are a ticket resale website…disclosure
arrangements should be applied to a wide range of platforms, such as advertising, social
media, search engines and to claims on resale websites.
CHOICE Submission
Information pertaining to the non-official status of a ticket reseller should be easily
visible and clearly explained in the top 20 per cent of the reseller’s website including the
home and landing page…additional disclosure should also be made such as section, row
(or range of rows) but not seat number, as they can be readily identified by event
organisers and may be cancelled. Disclosure of any restrictions should also be
mandatory.
Ticket Brokers Association Submission
We strongly support improved information disclosure arrangements for ticket resellers.
The use of specious websites and opaque marketing techniques that present to
consumers as primary ticketing agencies are recognised as having the effect of either
advertently or inadvertently misleading and deceiving consumers.
Live Music Office Submission
As with restricted reselling practices, government mandated information disclosure requirements in
the secondary ticket market are not common. The United Kingdom provides the best example of how
information disclosure can be used to reduce information asymmetries in the secondary ticket
market, and equip consumers with the information that they need to make more informed
purchasing decisions. Further information on the UK’s duty to provide information is outlined in
Box 11.
BOX 11: DUTY TO PROVIDE INFORMATION IN THE UNITED KINGDOM
The United Kingdom’s Consumer Rights Act 2015 (CRA) contains provisions that deal with the issue of
secondary ticket reselling.
Section 90 of the Act imposes obligations on ticket resellers to provide certain information about
tickets. The provisions apply where a person resells a ticket for a recreational, sporting or cultural
facility must ensure that the person who buys the ticket is given specific types of information. The
specified information that is required includes the seat or standing area in the venue where the
event will be held, information about any restrictions which limit the use of the ticket to certain
persons and the face value of the ticket. This information must be provided in a clear and
comprehensible manner.
cancelled by the event organiser if they have purchased those tickets through a secondary resale
mechanism. Under the law, the event organiser cannot cancel the ticket merely because the ticket
has been resold unless there are terms in the original contract for the sale of the ticket providing for
cancellation in circumstances where the ticket has been resold.
In May 2016, the UK’s laws relating to secondary ticket resale were independently reviewed by
Professor Michael Waterson. The Waterson Review concluded that the information provisions are
not as effective as they could be:
Evidence of complaints of missing information suggests that the CRA secondary ticketing
provisions are not being well observed by the secondary ticketing facilities and the
design of the online facilities. The rules seem not to be sufficiently well or broadly
understood by stakeholders in the market, or where they are understood by secondary
sites, are only patchily applied. The consumer survey confirms that, as yet, the provisions
appear to have only limited impact upon problems being experienced (Waterson, 2016,
p. 57).
Ordinary consumer sellers are wary of providing the full details of the tickets because
they fear having the tickets cancelled (Waterson, 2016, p. 58).
Professor Waterson noted that the ineffectiveness of the provisions was related to a lack of
compliance and enforcement action:
Ticketing resale platforms are seemingly not insisting on compliance with the CRA
information requests by those posting tickets for sale. This can be seen from a routine
check of the sites, but also from evidence submitted by stakeholders (Waterson, 2016,
p. 58).
There is therefore scope for greater enforcement of the legislation facilitated by greater
central coordination and funding for dedicated enforcement action (Waterson, 2016,
p. 58).
As with restricted reselling, the information that is required to be disclosed needs to be able to be
verified, and similarly it is unclear what may be the best mechanisms for verifying the disclosed
information. As with restricted reselling, there may be several methods of verification including
obtaining the information from the primary ticket seller or their website, requiring the ticket seller to
verify the disclosure information through some kind of authentication measure (such as providing
proof of purchase or a receipt), proof of the ticket, or simply relying on the seller to include the
correct information when registering the ticket for sale. Verifying the disclosed information will likely
create compliance costs for ticket reselling platforms.
The stakeholder consultation process canvassed views on the issue of verification. There were
differing views on which party should have the responsibility for verifying ticket information.
Reliance should be on the seller, not the marketplace, to disclose ticket information. This
is because they are best placed to advise of its specifics, given they selected the ticket for
purchase in the first instance and there are so many variables that could impact the
ability of a marketplace to accurately monitor. Reliance on the platform to monitor could
perhaps increase costs for the business, which will likely have to be passed onto the
seller.
Confidential Submission
The obligation should be placed on both [the ticket seller and the ticket selling platform],
but the ticketing platform should have sufficient excusatory justification if they have
taken reasonable steps to verify the information as correct.
Ticket Brokers Association Submission
Impact Analysis
Benefits
The benefits associated with improved information disclosure requirements are that consumers
wishing to buy tickets to events are still provided with a range of options including purchasing in the
secondary market and those consumers who need to onsell their tickets for genuine reasons, such as
no longer being able to attend the event, are permitted to do so and still have avenues available to
do so.
In the absence of reliable estimates of the costs to consumers of using alternative channels (i.e. the
black market that a resale ban or price cap would generate), and in light of the subjectivity of the
benefit a consumer derives from buying a ticket priced above face value, the benefits associated with
consumers having ongoing access to the secondary ticket market are unquantifiable.
Importantly, improved information disclosure requirements reduce information asymmetries in the
secondary ticket market and ensure that consumers are provided with the information that they
require to make more informed purchasing decisions. When consumers are more informed, they can
participate more confidently in the secondary ticket market. The disclosure of information on
secondary ticket resale sites could potentially reduce the amount of time consumers need to spend
transacting in the ticket market overall, because they will immediately know that they are on a
secondary ticket resale site and what the difference from face value is, and can make a decision
about whether they are comfortable purchasing from the seller for that price.
It should be noted that Google’s policy change in February 2018, and major ticket resale sites’
subsequent compliance with this policy change, means that legislating a requirement to disclose that
the site is a resale site would reduce the size of the potential benefit of Option 4. However, Option 4
would ensure consumers see this warning regardless of whether they accessed a site via a Google
AdWords advertisement.
In the absence of reliable estimates of the average amount of time a consumer would save from
being able to make an informed decision early (without having to research and compare other sites),
and in light of the subjectivity of the benefit a consumer derives from buying a ticket priced above
face value, the benefits associated with this saved time are unquantifiable.
Costs
Individual secondary ticket sellers face costs associated with inputting the required information. This
could be realised in the form of the additional time that it takes an individual ticket reseller to
register their ticket on a ticket reselling platform.
Importantly, secondary ticket reselling platforms will face compliance costs associated with updating
their websites to put in place mechanisms that allow the individual secondary ticket sellers to input
the required information. This will likely require website redesign and updating, or changes to other
back-end systems. Further, secondary ticket reselling platforms face compliance costs associated
with verification of the information that is required to be disclosed. These costs are discussed further
below.
The stakeholder consultation process canvassed views on the compliance costs associated with
information disclosure.
We do not view compliance with the information disclosure requirements as burdensome
and would simply require some minor implementation to be made to a relevant seller
website. We view any compliance costs are negligible and would be absorbed as
operational costs, with no requirement to be passed onto consumers.
Ticket Brokers Association Submission
Compliance costs would be significant as significant technology solutions would be
required…there is potential that there will be an additional cost to the consumer. There
could conceivably be additional fees needed to cover various disclosure levels within the
resale process.
Confidential Submission
When Google announced changes to its advertising policies as they apply to secondary ticket sellers
and associated disclosure requirements, secondary ticket sellers were given four months to comply.
Compliance Costs
Information disclosure is estimated to generate a total compliance cost of $20.2 million over 10
years. This consists of a one-off system and platform redesign costs of $99,000 and ongoing ticket
information verification costs of $20,064,000 over a 10 year period.
Under this option, ticket resale websites will need to redesign their sites to include disclosure
statements and to allow the face value of the ticket (and potentially other information about the
ticket, such as the section and row) to be inputted into the ticket selling system. It is also assumed
that in order to be compliant, the ticket resale site would need to verify the details that individual
ticket resellers have inputted into the system.
As explained above, under Option 4 resale websites would be required to disclose the fact of being a
resale site and the face value of tickets being resold. Information about seat location and any
restrictions on a ticket could also be mandated, depending on the final design of the proposed policy.
However, the compliance cost estimates are not sensitive to whether these additional disclosures are
mandated, given that resale sites would be verifying each individual ticket in any case.
Net Benefit
Improved information disclosure laws will partially address the identified problem. Improved
information disclosure will contribute to consumers making more informed and better purchasing
decisions for themselves and their own needs. In addition, improved information disclosure is likely
to reduce the risks that consumers face from potential fraud and scams because consumers will be
more informed about who they are buying from, and can make judgements about how willing they
are to buy tickets from non-official sellers. However, improved information disclosure may not
significantly reduce total consumer expenditure on tickets as there will still be consumers willing to
purchase resold tickets in the secondary market at a premium.
It is expected that the benefits associated with improved information disclosure will outweigh the
costs associated with improved information disclosure. Improved information disclosure will allow
consumers to still experience the benefits of the secondary market in a more informed way and does
not result in the creation of a black market for tickets. This means that consumers will still have
access to consumer protections when things go wrong in transactions with sellers.
Summary Table of Benefits and Costs
BENEFITS COSTS
Consumers are still able to purchase tickets on the Secondary ticket sellers face costs associated with
secondary market. inputting the required information.
Consumers who genuinely need to onsell their
tickets can still do so.
Information asymmetries in the secondary ticket
market are reduced and consumers are provided
with the information that they need to make a more
informed purchasing decision.
Secondary ticket reselling platforms face
compliance costs associated with updating their
websites to put in place mechanisms that allow
secondary ticket sellers to input the required
information.
Secondary ticket reselling platforms face
compliance costs associated with verification of the
information that is required to be disclosed.
Resources would be required to put in place a
stronger enforcement regime.
OPTION 5: NATIONAL BAN ON USE OF TICKET-BUYING BOTS
Ticket-buying bots cause consumer detriment because they impact consumers fair access to the
primary ticket market. This bot activity means there are fewer tickets available to consumers at the
original price.
As described in the problem section of this RIS, while consultation indicated bot activity typically
targets the most desirable events and seats rather than necessarily pervading the wider market for
tickets, consumers do experience detriment from fewer of these more sought-after tickets being
available at the original price. Consumers expect, and are entitled to expect, fair access regardless of
the relative desirability of particular event tickets.
Research from overseas jurisdictions such as the United States of America, United Kingdom and
Canada indicates that overseas ticket resellers or scalpers use ticket-buying bots as part of an overall
strategy to gain access to tickets in volume (Koebler, 2017). While precise figures are impossible to
obtain, it is believed that ticket-buying bots can account for as much as 30 per cent of the traffic to
primary ticketing sites in the moments after a major event goes on sale (Rolfe, 2017).
Under this option, the use of ticket-buying bots to purchase tickets from the primary market would
be banned.
The stakeholder consultation process found that there is strong support for a ban on the use of
ticket-buying bots.
Many LPA Members support a ban on the use of ticket-buying bot software because the
only purpose of this technology is to beat consumers out of fair access to tickets and to
profiteer from any tickets acquired using bot technology.
Live Performance Australia Submission
eBay, StubHub and Gumtree strongly support the paper’s recommendation to outlaw the
use of automated ticket buying bots. The use of bots provides an unfair advantage in
securing tickets over the average fan and drives demand for the purpose of tickets from
scalpers.
eBay | StubHub | Gumtree Submission
By introducing a national ban on ticket-buying bots, our view is that a considerable
amount of consumer frustration stemming from the inability to acquire tickets from
certain events would be avoided…TEG is supportive of banning ticket bots as we do not
believe there is a legitimate use for the technology.
TEG Submission
The New South Wales ban makes it an offence for persons to engage in any prohibited conduct in
relation to the use of a ticketing website. A person engages in prohibited conduct if they use
software that enables them to circumvent the security measures on a ticketing website. Further
information on the New South Wales ban on ticket-buying bots is outlined in Box 12.
BOX 12: NEW SOUTH WALES BAN ON TICKET-BUYING BOTS
On 1 June 2018, new laws commenced in New South Wales banning the use of
ticket-buying bots in the State as part of a legislative package to address ticket scalping.
The legislation provides that a person engages in prohibited conduct in relation to the use of a
ticketing website if the person uses any software to enable or assist the person to circumvent the
security measures of the website and to purchase tickets in contravention of the terms of use that
are published on the website (Fair Trading Act 1987 (NSW) s 58K).
There are two enforcement options available under the new prohibition. Under Part 5-2 of the
Australian Consumer Law operating in NSW, NSW Fair Trading or any person can apply to a court to
grant an injunction preventing a person contravening the new ticket scalping provisions or requiring
them to refund money. A person who has suffered loss or damage because of a breach of the new
provisions will also be able to recover damages or compensation, and a court will be able to make a
range of other orders such as requiring community service or publishing certain information.
NSW Fair Trading is able to act directly under the Fair Trading Act 1987 (NSW) to enforce the
requirements and seek penalties of up to $22,000 for an individual or $110,000 for a corporation.
Some stakeholders felt that, given the sophisticated nature of ticket-buying bots, enforcement by
organisations with specialist skills may be more appropriate than consumer law regulators:
[Stakeholder] submits that, given the evolving technology involved in ticket buying bots
and associated practices, a dedicated body familiar with cyber-crime would be best
placed to implement and enforce the proposed regulations.
Confidential Submission
The consultation process indicated stakeholders recognise the need for strong enforcement of a ban
on ticket-buying bots:
Scalpers using bot software can be located anywhere in the world, and it is likely they
will be adept at masking their online identity. Software development is also likely to be
faster and smarter than any preventative measures that can be developed.
CHOICE Submission
While we acknowledge that enforcement may be difficult due to the nefarious nature of
bot activity (including where bots are hosted offshore and access ticketing systems
through a multitude of IP addresses), legislative reform to ban their use is welcomed.
TEG Submission
In 2016, the United States of America legislated to ban the use of ticket-buying bots:
BOX 13: US BETTER ONLINE TICKET SALES ACT 2016
The Better Online Ticket Sales Act was enacted on 14 December 2016.
The Act prohibits the circumvention of security measures, access control measures or any
technological measures on an internet website or online service of a ticket issuer that is used to
purchasing order rules for a public event with an attendance capacity exceeding 200 persons.
The Act also prohibits the sale of or offers to sell an event ticket in interstate commerce obtained
through such a circumvention violation if the seller participated in, had the ability to control, or
should have known about the violation. Violations of the Act are treated as unfair or deceptive acts
or practices under the Federal Trade Commission Act.
Although it is early days, anecdotal evidence suggests that the ban has had only a minor deterrent
effect and enforcement of the ban remains a challenge.
A ban on ticket-buying bot activity commenced in the United Kingdom in July 2018. Made under
section 106 of the Digital Economy Act 2017 (UK), The Breaching of Limits on Ticket Sales Regulations
2018 (UK) makes it an offence for a person to use software that is designed to enable or facilitate
completion of any part of an online purchasing process with intent to obtain tickets in excess of a
sales limit, with a view to any person obtaining financial gain. A person guilty of this offence is liable
to an unlimited fine in England and Wales, and to a fine of up to £50,000 in Scotland.
Impact Analysis
Benefits
A national ban on the use of ticket-buying bots would create a disincentive effect for ticket scalpers
to use the technology because they risk being caught and prosecuted (or having civil action taken
against them).
A national ban on the use of ticket-buying bots would aim to provide consumers with fairer access to
tickets in the primary market by reducing the number of tickets purchased by ticket-buying bots. The
benefits associated with fairer access to tickets are unable to be quantified. While consultation
revealed bot activity occurs widely in the case of premium or high-profile events, it is not possible to
reliably estimate the prevalence of bot activity or how effective a ban would be. The Implementation
section at the end of this RIS discusses how enforceability will be addressed.
Consultation indicated that amateur or casual users of bot technology are thought to be responsible
for a significant proportion of bot attacks (although not the majority). Ready-made ticket-buying bots
and instructions on how to create them are openly available online, making it easy and relatively
inexpensive for these casual users to access the technology. A ban could deter this activity and make
it harder to access the necessary tools. This indicates a ban could make a significant and immediate
impact on bot activity, even though enforcement against professional or organised operators could
take longer to produce results.
Although some of the benefits associated with eliminating the amateur segment of ticket bot users
could be undermined if more sophisticated bot users take over that segment of the market,
consultation indicated that amateur bot users are disruptive to primary ticket sellers and eliminating
this portion of the market would assist primary ticket sellers in their efforts to prevent bot activity.
Consultation indicated that primary ticket sellers spend millions of dollars every year on combatting
ticket-buying bot activity. Any reduction in the incidence of bot attacks holds the prospect of reduced
costs for primary ticket sellers.
A further benefit of a ban is that it would allow ticket sellers in the primary market to report ticket-
buying bot users to a law enforcement agency, which would build on existing efforts by primary
sellers to deflect bot activity. There may also be circumstances where a primary seller could take
action under the new law against bot activity it identifies.
Costs
The costs associated with a national ban on the use of ticket-buying bots relate to enforcement. It is
likely that significant additional enforcement resources would be required to ensure compliance with
the ban, especially given that many bot users would be operating outside Australia. On a theoretical
level, the use of ticket-buying bots can be viewed as improving efficiency in the market for tickets, in
the sense that tickets will be sold to those with the highest willingness to pay for them. However,
there is an important distinction with the similar observation made in relation to Option 3
Restricted Reselling.
The impact assessment of Option 3 described how tickets might not necessarily go to those
consumers with the greatest willingness to pay (instead likely going to those consumers who move to
purchase tickets early during the sales period); but this issue does not arise under Option 5. Where
the secondary market for tickets operates without bot activity, tickets can be sold to those with the
highest willingness to pay, without an unfair and unnecessary transfer from the consumer to the bot
user.
Compliance Costs
A ban on the use of ticket-buying bots would make the practice illegal; therefore ticket-buying bot
users would no longer be permitted to operate. If ticket-buying bot users are not permitted to
operate, they will face no compliance costs.
Net Benefit
A ban on the use of ticket-buying bots directly targets the identified problem posed by this activity. A
ban on ticket-buying bots would likely reduce the prevalence of the activity and result in fairer access
to tickets at their original price on official ticket selling platforms.
This option, implemented together with Option 4 Improved Information Disclosure, would
generate benefits for consumers in terms of informed decision-making and fairer access to tickets. It
is acknowledged that the costs relating to enforcement resources and the degree of enforceability of
a ban, the latter of which can also be characterised as the probability of realising the anticipated
benefits, are uncertain.
Further work will be required to determine the design of an enforcement and penalty regime. It will
be important to design this in a manner that maximises enforceability, while supporting this with an
appropriate level of enforcement resources, in order to ensure the identified qualitative benefits of a
ban are fully realised. By managing these enforcement challenges in the implementation of a ban,
the qualitative benefits of promoting fair access to tickets are likely to outweigh these costs.
Summary Table of Benefits and Costs
BENEFITS COSTS
Making ticket-buying bot activity unlawful would Identifying ticket-buying bot users is a difficult and
create a deterrent effect to using the technology. expensive process requiring additional enforcement
resources.
Likely to reduce the use of ticket-buying bots and
give consumers fairer access to tickets because
they no longer have to compete with ticket-buying
bot technology.
Allows ticket sellers in the primary market to report
ticket-buying bot users to a regulator.
Possible reduction in the costs that primary ticket
sellers incur combatting bot attacks.
4. CONSULTATION
SUMMARY
submissions were received from 16 organisations. Consumers also put forward their views on the
preferred options.
Consultation Process
Treasury, on behalf of Consumer Affairs Australia and New Zealand, undertook an extensive public
consultation process. The objective of the consultation was to gather additional evidence and data
on the extent of the problem, and to seek views on the benefits and costs of the five proposed policy
options.
The consultation process commenced on 17 November and concluded on 15 December. It consisted
of targeted face-to-face meetings with key stakeholders (including primary ticket sellers, secondary
ticket sellers, promoters and touring companies, industry associations and consumer advocates), a
formal written submission process and a comment facility for consumers to share their experiences
with ticket resale.
While there was a high level of consumer engagement as indicated by the volume of consumer
comments received and interest from event organisers and primary ticket sellers, there was a
lower than expected level of engagement from stakeholders operating in the secondary ticket
market.
The consultation process received:
16 formal submission from event organisers, promoters and touring companies, primary ticket
sellers, secondary ticket sellers, industry associations and consumer advocates; and
377 consumer comments via www.treasury.gov.au/consultation
Treasury conducted 10 face-to-face meetings with key stakeholders in Melbourne, Sydney and
Canberra and 5 teleconferences with key stakeholders.
A list of non-confidential submissions is at Appendix A.
Key Findings
The consultation process has resulted in the following key findings:
Strong support for the
continued existence of the
secondary market.
Strong support for stronger
enforcement of the ACL.
Strong support for a
national approach to
ticket reselling.
Detailed Findings
There is strong support for the continued existence of the secondary ticket market.
There was very little support from consumers for Option 2 Prohibition on Ticket Reselling. Most
consumer respondents indicated that they value the secondary ticket reselling market. They
believe that ticket resellers provide a vital service because they feel that it is important that
consumers have options to resell their tickets when they are no longer able to attend an event
due to things like illness or work commitments. Similarly, many consumers indicated they value
the secondary market because they are able to obtain tickets to events that are sold out that they
really want to go to.
Some promoters and touring companies supported Option 2 Prohibition on Ticket Reselling.
There was a strong view that ticket scalpers and resellers should not make money off the back of
the labour of the artist or sportspersons. However, those in support of a ban acknowledged the
difficulties associated with this option and that it would be unrealistic to expect a ban in the
absence of introducing a refund policy. Most acknowledged that refund policies are not viable in
the entertainment and sporting industries because of the narrow margins and large overheads
associated with these events.
All primary ticket sellers noted that the ticket resale market has been growing and ticket reselling
has become more widespread over the last five years. However, the views of primary ticket sellers
were divergent on what should be done to address the issues associated with ticket reselling and
consumer detriment. Some primary ticket sellers supported Option 2 Prohibition on Ticket
Reselling, noting moral and ethical objections similar to promoters and touring companies.
However, like promoters and touring companies, those in support of a ban acknowledged the
difficulties associated with this option and that it would be unrealistic to expect a ban in the
absence of introducing a refund policy. Other primary ticket sellers acknowledged that the
secondary market is here to stay and that in the absence of a legitimate and regulated secondary
market, a black market would be created because consumers will always have a need for ticket
resale services.
All secondary ticket sellers strongly supported the continued existence of the secondary ticket
market. Secondary ticket sellers emphasised the importance of the secondary market to
Strong support for a
consumer education
campaign.
Some support for a cap on
the price of resold tickets
and strong support for
information disclosure.
Strong support for a ban
on ticket-buying bots.
consumers. However, the views of secondary ticket sellers were divergent on the appropriate
policy responses to improve outcomes for consumers.
Some secondary ticket sellers outright rejected any moves to impose further regulation on the
secondary ticket market, arguing that the ticket market should be a free and open market, guided
by supply, demand and the willingness of consumers to pay. Many secondary ticket sellers
acknowledged that further regulation or government intervention in this market may see them
move their operations offshore, out of reach of the scope of any legislation and enforcement
action. These secondary ticket sellers noted that a move offshore would be bad for Australian
consumers making it more difficult for them to buy and sell tickets on the secondary market.
Strong support for stronger enforcement of the Australian Consumer Law.
Consumer advocates generally expressed a view for better enforcement of existing laws under
the Australian Consumer Law, especially in relation to the misleading and deceptive conduct of
some sellers in the secondary market and in relation to fees and drip pricing. There was a view
that if these existing laws were being enforced, many of the issues consumers face in the
secondary market would go away.
Promoters and touring companies supported better and stronger enforcement of the existing
Australian Consumer Law.
Strong support for a national approach to ticket reselling.
All stakeholders expressed a preference for a nationally consistent approach to ticket reselling,
noting that Australian consumers transact across borders and travel across borders to attend
shows.
Strong support for a consumer education campaign.
All stakeholders expressed support for a consumer education campaign, noting the challenges of
any campaign being able to reach all consumers. Primary ticket sellers noted that they are
undertaking their own consumer education exercises.
Some support for a cap on the price of resold tickets and strong support for
information disclosure.
While there was strong support for the continued existence of the secondary market, the vast
majority of consumers were of the view that the sale price should be capped to the face value of
the ticket or the face value plus a small mark-up to cover costs (Option 3 Restricted Reselling).
Many consumers shared their stories of being faced with exorbitant prices and felt that scalping
behaviour is unfair and causes detriment to true fans and enthusiasts. Further, the majority of
consumers who shared their experiences with ticket resale complained about the additional fees.
They felt that these fees were too high and result in them not being able to fully recover the cost
of the ticket.
Consumer advocates were generally in favour of light touch regulation, with a preference for
Option 4 Improved Information Disclosure. Consumer advocates noted the importance of
protecting consumers from having tickets cancelled by the primary ticket seller if the ticket is
resold. In addition, consumer advocates noted that any new laws should apply to all reselling
platforms including social media websites.
Some promoters and touring companies also supported Option 4 Improved Information
Disclosure to improve consumer awareness and decision making. Many promoters and
companies believe that ticket reselling sites are misleading and deceptive and would benefit from
greater transparency.
Primary ticket sellers who do not have ticket resale platforms and who expressed concern that a
ban on ticket resale is unrealistic generally offered their support for a combination of Option 3
Restricted Reselling and Option 4 Improved Information Disclosure. Primary ticket sellers
acknowledged that many consumers who purchase tickets on resale platforms are unaware that
they are not purchasing from the official ticket seller. In light of this, it was acknowledged that
Option 4 Improved Information Disclosure would go some way to improving consumer
awareness and decision making.
Some secondary ticket sellers noted that they are already complying with some of the proposed
policy options. One secondary ticket seller noted that it already practices Option 3 Restricted
Reselling, and does not allow tickets to be sold on its site for more than the face value plus 10 per
cent. The ticket seller noted that this was primarily an ethical and moral decision. Another
secondary ticket seller noted that it also practices Option 3 Restricted Reselling but with a 20
per cent mark-up allowed. This seller noted that a mark-up below 20 per cent would see it unable
to recover its operating costs. Another secondary ticket seller also noted that a mark-up of 10 per
cent would be too low to cover its operating expenses.
Some secondary ticket sellers noted that they already comply to a degree with Option 4
Improved Information Disclosure. These secondary ticket sellers were of a view that the
disclosure of information assists consumers to make informed decisions. There was also a view
that providing this information improves the reputation and trustworthiness of the secondary
ticket seller.
A variety of other industry associations, including those representing artists and venues, also
expressed support for government intervention in the secondary market. There was a mix of
support for Option 3 Restricted Reselling and Option 4 Improved Information Disclosure.
Strong support for a ban on the use of ticket-buying bots.
Consumers and consumer advocates strongly supported Option 5 Ban on Ticket Buying Bots.
Promoters and touring companies strongly supported Option 5 Ban on Ticket Buying Bots.
All primary ticket sellers strongly supported Option 5 Ban on Ticket Buying Bots. Primary ticket
sellers shared information on the measures that they use to prevent ticket-buying bots infiltrating
their systems some sellers are more successful than others. All primary ticket sellers
acknowledged that battling ticket-buying bots is not a fight that they can win alone and that laws,
similar to those that have been introduced in the United States and United Kingdom, would be
welcomed in Australia.
All secondary ticket resellers that participated in the consultation process strongly supported
Option 5 Ban on Ticket Buying Bots.
5. CONCLUSION
The market for tickets to live performance and sporting events in Australia is large. The market for
tickets consists of a primary ticket market where tickets are first sold and purchased, and a
secondary ticket market where tickets are onsold or scalped.
Ticket reselling practices can cause a number of consumer harms including consumers being misled
about the tickets they are purchasing due to information asymmetries in the secondary market
which prevent them from making informed purchasing decisions; exposure to the risk of ticket
cancellation because of contraventions of ticket terms and conditions; and exposure to potential
scams and frauds because unofficial ticket resale websites provide a platform for deception. In
addition, consumers’ fair access to tickets can also be undermined by the use of ticket-buying bots.
The secondary market exists for legitimate reasons. The problem is not the existence of the
secondary market, but rather the consumer harm that arises from how the market operates.
Broadly, ticket reselling and ticket scalping is not illegal in Australia. However, the ACL, together with
existing State and Territory laws, provide a level of coverage to address issues associated with ticket
reselling and ticket scalping in the secondary market. While these existing laws provide a level of
coverage to address issues associated with ticket reselling, their effectiveness depends on consumers
understanding their rights under the ACL (and other legislation) and being able to take action when
they believe those rights have been breached to find a remedy.
The policy objective is to reduce consumer detriment in the secondary ticket market that arises from
consumers not being provided the information that they require to make an informed purchasing
decision that would benefit them. The policy objective is also to reduce the risk that consumers are
both advertently or inadvertently misled or deceived when they purchase tickets to events in the
secondary ticket market. Reducing consumer detriment and reducing opportunities for consumers to
be misled or deceived will enhance the welfare of Australians by giving them greater confidence and
certainty when they choose to participate in the secondary ticket market.
This paper has outlined a number of options that could be pursued to achieve the policy objective.
The options to address the identified problems seek to improve outcomes for consumers who
participate in the secondary ticket market. The options reduce the level of risk in the market, ensure
that consumers are provided with the information that they require to make more informed
purchasing decisions and seek to ensure that consumers have fairer access to tickets.
Option 1 maintains the status quo and outlines no new government action. Under this
option, existing laws would continue to operate, with government having conducted an
education campaign in March May 2018 to warn consumers of the risks of participating in
the secondary ticket market.
Option 2 would make the act of ticket reselling unlawful, with penalties applying. This
option would effectively shut down the entire secondary ticket market and remove the
ability to resell, even at face value.
Option 3 outlines options for restricted reselling. Under option 3(a) ticket reselling would
be restricted to the selling of the ticket at the face value only. Under option 3(b) ticket
reselling would be restricted to selling the ticket at the face value plus a 10 per cent
premium.
Option 4 would require ticket reselling platforms to disclose information including that they
are a resale site, and information about the ticket itself, such as the face value.
Option 5 would introduce a national ban the use of ticket-buying bots.
The preferred policy option is Option 4 Improved Information Disclosure.
This option provides the greatest net benefits to consumers, based on a qualitative assessment of
the costs and benefits. It also represents an acceptable level of compliance cost to business when
evaluated alongside this qualitative net benefit.
Option 4 is expected to be the most effective option to meet the policy objective of reducing
consumer detriment in the secondary ticket market that arises from consumers not being provided
the information that they require to make an informed purchasing decision that would benefit them.
The benefits associated with improved information disclosure will outweigh the costs. Improved
information disclosure will allow consumers to still experience the benefits of the secondary market
in a more informed way and does not result in the creation of a black market for tickets. This means
that consumers will still have access to consumer protections when things go wrong in transactions
with sellers.
6. IMPLEMENTATION
Legislative and Governance Forum on Consumer Affairs
The Legislative and Governance Forum on Consumer Affairs (CAF) will meet in August 2018 to discuss
an appropriate policy response to the issues raised in this Regulation Impact Statement, and vote on
a preferred option.
Transitional Periods
Following the passage of legislation, a transitional period of three months would be an appropriate
transitional period for improved information disclosure arrangements. When Google announced its
changes to its advertising policies to require resale sites to disclose the fact of being a reseller, the
sites were given four months to comply. The major sites operating in Australia are now compliant
with this aspect. While this Google policy only applies when the consumer accesses the site via a
Google AdWords advertisement, most (but not all) of the sites currently display the statement
regardless of how the consumer accesses the site.
Following the passage of legislation, it would be appropriate for a ban on the use of ticket-buying
bots to come into effect immediately.
Compliance and Enforcement
If obligations are made under the ACL to improve information disclosure, existing regulators would
be responsible for any compliance and enforcement activity. The Australian Consumer Law is
administered and enforced jointly by the ACCC and the State and Territory consumer protection
agencies, with the involvement of the Australian Securities and Investments Commission on relevant
matters. Regulators would be responsible for providing guidance to affected businesses and
consumers.
Where State and Territory legislation provides for additional obligations beyond what is proposed
here, those additional obligations could continue to operate concurrently with the new national
baseline level of disclosure.
A national ban on the use of ticket-buying bots would need to be accompanied by a strong
enforcement capability. It is acknowledged that there are enforcement challenges associated with a
ban, as it can be difficult to identify the user of a ticket-buying bot. If a ban is instituted, ticket sellers
in the primary market should be able to report ticket-buying bot activity to the regulator and share
any information about the identity of the ticket-buying bot user with the regulator.
There are several options for implementing a national ban in Australia. Recognising that bot attacks
typically originate overseas, there is scope for criminal offences to allow for extradition and mutual
assistance where the offence is of a particular severity.
For instance, an offence of using a ticket-buying bot, if backed by a maximum penalty of
imprisonment for a period exceeding 12 months or a fine exceeding 300 penalty units, could support
a formal request for assistance by overseas authorities.
There may also be scope for private actions where parties could seek an injunction against, or
compensation from, an operator of ticket buying-bots, as the New South Wales arrangements now
provide.
Depending on how a ban on ticket-buying bots is legislated, an appropriate regulator would need to
be identified and would be responsible for compliance and enforcement activity. The precise form
and location of a legislated ban will be determined at the law design stage of the policy’s
implementation.
Monitoring
Should CAF agree to Option 4, CAANZ will monitor the implementation of the policy and its
effectiveness once operational.
Similarly, should Option 5 proceed, the Treasury will monitor the implementation and effectiveness
of the policy.
7. BIBLIOGRAPHY
CHOICE (2017). “Sold Out: Consumers and the Ticket Resale Industry”. August 2017. Available at:
campaigns.choice.com.au/choice-ticketing/.
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Issue 2, pp. 83-97.
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the Ticket You Want.” CBCNews. Available at: www.cbc.ca/news/business/ticket-industry-bots-
resellers-1.3811994
Commonwealth of Australia (2014) “Ticket Scalping in Australia”. Senate Standing Committee on
Economics. Available at: www.aph.gov.au/Parliamentary_Business/Committees/Senate/Econo
mics/Ticket_scalping_2013/Report/index
De Atley, R. (2004). “Trends/Beating The Scalpers: Online Firms Provide Safe Place for Ticket Sellers,
Buyers to Meet”. The Press Enterprise. 3 July 2004.
Flynn, V. (2017). “StubHub: Ticket Price Caps Won’t Work”. The Sunday Times. 2 April 2017.
Griggs, L. (2006). Ticket Scalping. Griffith Law Review. Vol. 15, Issue 2, pp. 287-305
Koebler, J. (2017). “The Man Who Broke Ticketmaster”. Vice. Available at: motherboard.vice.com/
en_us/article/mgxqb8/the-man-who-broke-ticketmaster
Leslie, P. and Sorensen, A. “The Welfare Effects of Ticket Resale”. National Bureau of Economic
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Live Performance Australia (2017a). “LPA Ticket Attendance and Revenue Survey 2016”. Available at
http://reports.liveperformance.com.au/ticket-survey-2016.
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Securely”. Available at: liveperformance.com.au/sites/liveperformance.com.au/files/resources
/lpa_-_safe_tix_guide_online.pdf.
Live Performance Australia (2017c). “LPA Consumer Guide: Buying and Selling Tickets in the Ticket
Resale Market”. Available at: liveperformance.com.au/sites/liveperformance.com.au/files/resour
ces/lpa_guide_to_buying_and_selling_tickets_in_the_ticket_resale_market_-_updated_20170814.
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Secondary Ticketing Facilities. May 2016.
APPENDIX A LIST OF NON-CONFIDENTIAL
SUBMISSIONS
Australasian Performing Right Association Limited | Australasian Mechanical Copyright Owners
Society Limited
CHOICE
David Kellam
Google Australia
Live Music Office
Live Performance Australia
eBay | StubHub | Gumtree
TEG Pty Limited
Ticket Brokers Association
APPENDIX B — SAMPLE INTERNET SEARCH RESULTS
Artist Main Official Ticket Sellers Search Result 1 Search Result 2 Search Result 3 Search Result 4 Search Result 5
Pricilla Presley Ticketmaster, Ticketek Viagogo Ticketek Ticketmaster Ticketmaster Ticketmaster
The Script Ticketek and MoshTix Viagogo StubHub Frontier Touring Ticketek Ticketmaster
The Killers Ticketmaster, Ticketek Viagogo StubHub Ticketek Frontier Touring Ticketmaster
Foo Fighters Ticketmaster, Ticketek Viagogo TicketmasterResale StubHub Ticketmaster Frontier Touring
Drake Ticketmaster, Ticketek TicketmasterResale AMEX Viagogo StubHub Ticketek
Dan Sultan Ticketmaster, Ticketek, MoshTix, OzTix, Viagogo Frontier Touring Dan Sultan Dan Sultan Moshtix
NTix
Mac Miller Ticketek Viagogo Frontier Touring Ticketek Music Feeds Ticketmaster
The Vamps Ticketmaster, Ticketek Viagogo TicketmasterResale Frontier Touring Ticketek Ticketmaster
Midnight Oil Ticketmaster, Ticketek, Ntix, TicketLink Viagogo Frontier Touring Ticketek Ticketmaster TicketmasterResale
Migos Ticketmaster, Ticketek, OzTix, MegaTix Frontier Touring Ticketek Viagogo Ticketmaster Ticketmaster
6lack Ticketek, Ticketmaster MoshTix Viagogo Frontier Touring Twitter Ticketmaster Ticketek
Andy Grammer Ticketmaster, OzTix, Ticketek Viagogo Frontier Touring Ticketmaster Andy Grammer Songkick
Ne-Yo MoshTix Frontier Touring Ticketmaster MoshTix Viagogo Songkick
Anna Netrebko and Ticketmaster, Ticketek Frontier Touring Ticketek Ticketmaster Ticketmaster Ticketmaster
Yusif Eyvazov
Melvins OzTix, Ticketek Viagogo Frontier Touring Oztix Songkick Ticketmaster
Tex Perkins Ticketek Frontier Touring Ticketmaster Ticketek Songkick Tex Perkins
Lorde Ticketmaster, MoshTix Viagogo Frontier Touring Ticketmaster Ticketmaster Ticketmaster
Paul Kelly Ticketmaster, Ticketek, OzTix Frontier Touring Ticketmaster Paul Kelly
Ticketek Songkick
Vance Joy Ticketmaster, Ticketek TicketmasterResale Frontier Touring Ticketek Ticketmaster TicketmasterResale
Shawn Mendes Ticketek Viagogo Ticketek Frontier Touring Viagogo Ticketmaster
The Temper Trap Ticketek, OzTix Frontier Touring Ticketmaster Temper Trap Temper Trap Ticketek
Harry Styles 2017 Ticketek, Ticketmaster Stubhub Frontier Touring Frontier Touring Ticketek Ticketek
John Farnham Ticketmaster Ticketmaster Ticketmaster John Farnham John Farnham Music Feeds
Artist Main Official Ticket Sellers Search Result 1 Search Result 2 Search Result 3 Search Result 4 Search Result 5
alt-J Ticketek, Ticketmaster Ticketmaster Frontier Touring Ticketek Viagogo alt-J
Paul McCartney Ticketek, Ticketmaster Stubhub TicketmasterResale Ticketek Frontier Touring Viagogo
KC and The Sunshine Ticketek Frontier Touring Ticketmaster Ticketek Music Feeds Songkick
Band
Muse Ticketek Viagogo Ticketek Ticketek Frontier Touring Viagogo
The xx Ticketmaster, MoshTix Stubhub Frontier Touring MoshTix Ticketmaster The xx
Armand Van Helden / Ticketmaster Ticketmaster Ticketmaster The Music Skiddle Ticketmaster
Symphonica
Walker Stalker Con MoshTix Frontier Touring MoshTix Walker Stalker Con Walker Stalker Con Walker Stalker Con
Rise Against Ticketek, Ticketmaster Frontier Touring Ticketek Ticketmaster Music Feeds Rise Against
Veruca Salt Ticketek, MoshTix Frontier Touring Ticketek Ticketmaster Ticketmaster Moshtix
Ed Sheeran Ticketek, Ticketmaster Viagogo Ticketek Ticketek Frontier Touring Viagogo
James Blunt Ticketek, Ticketmaster Viagogo Frontier Touring Ticketmaster TheMusic Ticketek
Harry Styles 2018 Ticketek TicketmasterResale Frontier Touring Ticketek Ticketek Viagogo
Alanis Morisette Ticketek, Ticketmaster Stubhub TicketmasterResale Viagogo Ticketek Ticketmaster
All We are OzTix SongKick All We Are OzTix Stereo Board Facebook
Ben Folds Ticketmaster Ben Folds Sydney Opera House Chugg Entertainment Ticketmaster Canberra Theatre
Don Broco Destroy All Lines (OzTix) Ticketmaster MoshTix Oztix Songkick Don Broco
Elton John Ticketmaster, MoshTix Viagogo Ticketmaster Viagogo Chugg Entertainment Moshtix
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