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NSW Government Introduces New Anti-Scalping Laws

Written by Greg Moskovitch on October 3, 2013

The announcement of new “anti-scalping” legislation by NSW Fair Trading Minister Anthony Roberts has been met with criticism by ticketing giant Ticketmaster, who say the new laws will do little to curb the problem of ticket scalping in Australia.

In a statement released yesterday, Christoph Homann, Managing Director of Resale for Ticketmaster Int’l, said “The NSW government’s proposed secondary ticket legislation will neither protect fans nor stop scamming.” He warned of the new laws forcing consumers into “back alleys.”

“Restrictions rarely stop consumer interest rather; it pushes them into back alleys or in the case of ticket resale to the online equivalent to offshore, unregulated websites and into the clutches of fraudsters,” said Homann, echoing a statement released by Ticketmaster last month.

The new laws mean sellers will now have to show photographic proof of the ticket’s existence, with the resale price not exceeding 10% over the original. Websites will be forced to remove sellers found in breach of these conditions, or face fines of up to $5,500.

In a media release yesterday the government confirmed that they have been consulting “major sporting codes, event organisers, ticketing companies and reselling facilitators to develop a fairer system”.

“These new laws,” said Mr. Roberts “will improve transparency in the marketplace, protect consumers and allow the event organiser to enforce their terms and conditions to protect genuine fans from ticket scalping and fraud.”

The laws acknowledge that fans have legitimate reasons to resell tickets and wish to facilitate a safer market for genuine fans, while cracking down on fraudsters and scalpers “Often the perpetrator simply disappears leaving the consumer out of pocket,” said Mr. Roberts.

Mr. Roberts also commented on previous, market-led efforts, saying “Organisers have tried to address ticket scalping with varying success by allocating tickets to sporting clubs, limiting the number of tickets that can be bought by any one person and staging the release of tickets.”

The government are insisting that the laws are intended to protect consumers, with measures such as requiring resellers to detail terms and conditions of ticket sale and to provide warning if the ticket bears conditions which could see it cancelled if resold in breach of its own terms and conditions.

The new legislation will not apply to tickets sold through resale systems publicly authorised by the event owners.

But Christoph Homann favours a more laissez-faire approach, saying “The best way to protect fans, stop scalpers and curb the growth of unscrupulous resale websites is for the industry to take the lead.”

Homann continued, “The ticket resale platform that we announced last month will create a resale marketplace that will provide clear transaction terms, a money back guarantee and industry leading anti-scalping and anti-fraud measures.”

Last month, Ticketmaster announced the launch of their own ticket resale market in Australia, looking to mirror the US success of their TM+ initiative. Set to launch in 2014, the system will allow fans to browse tickets “straight from artists, teams, and venues” on the Ticketmaster website.

Meanwhile, events promoter Live Nation have invested $100 million in updating Ticketmaster’s purchasing platform, to combat high-tech scalpers who use specialised software “bots” to purchase tickets in bulk. The bots are reportedly responsible for snagging up to 60% of concert tickets.

Ticketmaster remain incredulous towards government-led efforts to stop the scalpers, saying “The proposed legislation will do little to combat sophisticated fraudsters who operate outside state borders where even the keenest NSW Department of Fair Trading officer cannot reach.”

Swiss ticketing company viagogo agrees with Ticketmaster’s position, stating “The ticketing legislation Minister Roberts has proposed won’t work and will simply increase fraud by pushing people back to the black market.”

“We know from our experiences around the world that legislation, while well intentioned, is not the answer,” they continued. viagogo reiterated Ticketmaster’s claim that legislation will drive consumers further into unregulated foreign markets with unscrupulous sellers.

“Terms and conditions protect the promoter and primary ticket seller” said viagogo “For example, the terms and conditions outline that it’s the primary seller’s right to substitute or cancel artists if they choose, and their right to withhold a refund or exchange.”

“You might buy tickets for a Bruce Springsteen concert, you could end up watching The Muppets, or nothing at all,” they said. viagogo expressed surprise at NSW’ proposals, having recently launched in Australia, with their service receiving “a commendation from Minister Roberts himself.”

Though not everyone agrees with the narrative espoused by Ticketmaster and viagogo. “For too long scalpers have been able to hide behind anonymity online,” said Michael Gudinski, managing director of the Frontier Touring Company, who lauded the new legislation.

Likewise Ticketek Australia managing director, Cameron Hoy, said that “Ticketek welcomes the NSW Government reforms in this area and supports measures such as these to clamp down on this unsound practice,” addressing the detrimental effects of scalping on consumer confidence.

Alex Levenson, Head of viagogo Asia Pacific, summed up the situation thus: “The facts are ticket resale was legal yesterday, is legal today and we are confident that it will still be legal tomorrow, and we will continue to offer fans a service that provides safe, secure and guaranteed access to tickets.”

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