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Is There Any Way to Stop Scalpers From Selling $5,000 Concert Tickets?

Ontario government may have just made it easier for ticket scalpers to rip us off.

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By now, it's just about guaranteed that a blockbuster concert in a major market will sell out minutes after tickets go on sale, and that many of those tickets will be posted for resale with a monstrously jacked-up price almost right away. Count yourself lucky if you were able to snag a ticket in, say, Toronto—a city that frequently sees huge demand not only because of its size, but also because it's often one of, or the only, Canadian date on an artist's tour—at face value. These days, resale ticket prices for any of Adele's four Toronto dates in October which start around $250 and reach a mind-blowing $9,000 on StubHub, a huge leap considering their original cost is around $70. Tickets to any of Dave Chappelle's four shows in Toronto, which were initially sold for $90, were fetching prices between $300 and a cool $1,000. And for the most part, it's totally legal.

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In Ontario, that wasn't always the case. It was only this past July that the province amended its Ticket Speculation Act to allow reselling above face value for the first time since 1914. Before, it carried a fine of up to $5,000 for an individual or up to $50,000 for a business. Why? Because legislators in Ontario decided that existing laws against scalping were too ineffective—the province successfully prosecutes only about 25 cases per year—and that it’s more worthwhile to instead enact more enforceable laws that regulate reselling and keep buyers from getting scammed. “Because most sales and resales occur online, it is very difficult to track and prosecute the fraudulent seller,” Christine Burke, a spokesperson for the Attorney General of Ontario, said in an email. “For this reason, the regulation emphasizes the sale transaction, and tries to create an incentive for both buyers and sellers to use a safe, protected system.”

The new laws effectively legalized scalping under the condition that sellers prove the ticket's authenticity or offer a money-back guarantee. Based on the idea of "consumer protection," it accepts the principles that have helped make platforms like StubHub so lucrative. The retailer rakes in revenues of $725 million annually, making it the fastest-growing business that eBay owns. But critics argue that it does nothing to curb the price-gouging that goes on with major concerts, where in many cases the supply—that is, only X number of tickets available for only Y number of shows in only Z number of cities—can't possibly meet the demand for monster touring acts like Adele, or Beyoncé's upcoming Formation tour. Basically, the scalpers have won.

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With Ontario's policy change allowing for-profit re-sales for the first time since 1914, only two Canadian provinces maintain laws against it: Manitoba and Quebec. In the United States, there's widespread regulatory inconsistency. Some states, like Michigan, have an outright ban on sales above face value. Others require a license for re-sales, like in Massachusetts, or apply a hefty tax on the profits, like in Alabama. Others, like California, ban resales only on the event grounds, the old-fashioned way. New York and Massachusetts, meanwhile, put caps on resale prices. But that's all pretty moot anyway, when the huge majority of today's ticket sales are brokered online. "You can have somebody in one state sell a ticket to someone in another state for an event that takes place in a third state, using servers that exist in a fourth state," said Dean Budnick, co-author of Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped which examines the history and convoluted business of concert ticketing. "Who has the legal jurisdiction to handle this? That's a lot of the fuzziness that went into this legislation." Budnick doesn't defend the translucent and sometimes shady practices employed by the concert industry, but he's also not up in arms about scalping like you might expect. "Mostly everything else that one can purchase, one does have the right to resell," he said. "It's frustrating as hell… but, who does the state want to privilege, and why?"

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Once in a while, a politician does make a stink. The exorbitant secondary market prices for Bruce Springsteen's recent concert in Toronto prompted the mayor of nearby Sarnia to urge Ontario—in a dorky Bruce Springsteen inspired open letter you’d expect from a 60-year-old dorky dad nicknamed "Mayor Mike"—to prevent online resellers from driving up prices to popular concerts. "I'm On Fire' along with many others who have been "Blinded by the Light" of the greed by online ticket sellers stuck in the "Badlands" of broken dreams, heartbreak and despair. Bruce fans had "High Hopes" they would be "Dancing in the Dark" on the floor of the Air Canada Centre," he wrote to the government, referencing the $5,000 priced resale tickets and, in total, 16 of the Boss's songs. Spencer Chandra Herbert, a politician in British Columbia, took up the cause for several years, starting with a proposal he brought forward in 2009 to ban ticket scalping—but he got nowhere. "I introduced the legislation and had absolutely zero interest from the government side to do anything about it," he said. "What we need to see is consumers demanding change. Laws can be created, rules can be put in place. I don't think that's the difficult part. It's convincing governments that this is something we need to do."

On the other side, resale brokers say it's a legitimate business practice based on the principles of supply and demand. Platforms like StubHub trumpet the values of a free market. “It’s very hard to extrapolate that this is somehow an evil system,” said Tod Cohen, the company's head of general counsel. “It’s emotional. It makes sense. But the market works when it’s open.” Is it fair? Not according to New York's attorney general, who released a scathing report last month that tore the ticket re-sale business a new one. The report described a "fixed game" in which brokers use software bots to buy up thousands of tickets, then mark up prices up by about 49 per cent, on average, and up to 7,000 per cent in extreme cases. The artists, promoters and venues, meanwhile, hold just under half of show tickets for "industry insiders," according to investigators. And that's not including those damned service fees.

Budnick said he'd like to see more transparency regarding how much inventory is actually available, and where, and when. Some people have suggested that every resale ticket should also advertise the original price, so buyers know how much it's been marked up. "I think people should be able to know," said Budnick. "I also could imagine some ceilings—in the way that governments generally discourage price gouging—but beyond that … I don't think there's an easy answer." Adele, for her part, has taken the fight to scalpers. In an effort that was viewed as mostly ineffective but largely symbolic, her agents manually pored over the list of sales and refunded tickets to buyers who bought more than the limit, presumably for resale. Ticketmaster also made tickets to Dave Chappelle's shows non-transferable – but that clearly didn't stop people from reselling them.

Where there are rules, there are workarounds. Ontario's change in tune after more than 100 years of prohibition says quite a bit about price gouging in the concert industry. For as long as there have been tickets, there has been scalping – and that doesn't look likely to change.

Adam Feibel is still hurt about missing out on those Beyonce tickets. Follow him on Twitter.