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
face value of the ticket, this eventually rose to 20 per cent and later 45 per cent (Schneiderman,
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).
Despite the resale restrictions, the laws were largely ignored. Further, the New York Attorney
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In 2007, the State repealed its long standing reselling restrictions, citing a failure to prevent ticket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
that the repeal would also see increases in tax revenue, as a formal licencing system for
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).
In 2016, a report by the New York State Attorney General found that the repeal of the reselling
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.