Measure Would Bring Fairness and Transparency to Event Ticket Sales
TRENTON – A bill sponsored by Senator Raymond J. Lesniak that would bring consumer protections and transparency to ticket sales for events such as concerts, games, shows and exhibits and encourage a more open market in New Jersey’s ticket-selling industry was approved today by the Senate Commerce Committee.
“Fans and spectators from around New Jersey look to ticket retailers to provide them with entrance to their favorite concerts, comedy shows or sporting events. Unfortunately ticket retailers have adopted practices that close the market – making their companies virtual monopolies – and that deceptively lure consumers into thinking they have a fair shot at buying tickets at face value,” said Senator Lesniak, D-Union. “And as the secondary ticket market has grown to an estimated $3 billion a year industry, many within the ticket industry see the ticket resale business as an opportunity for huge revenue gains. It is important that we ensure that the market remains open, transparent and competitive for all interested parties from the corporate giants of the event ticketing industry to the individual with a single ticket to sell.”
The bill, S-875, revises the law concerning event ticket sales and resales by protecting consumers’ right to resell their tickets, establishing consumer protections for secondary ticket sales, and creating clear transparency regulations on the ticket-selling market.
The bill would end the practice of restrictive paperless ticketing where ticket sellers require the purchaser to present the credit card used in purchasing the ticket and an ID for entrance into the event. According to Senator Lesniak, these tickets are restrictive in the sense that they are either nontransferable or can only be resold using the original seller’s approved secondary exchange service – for example Ticketmaster-owned TicketsNow or TicketExchange.
“When a consumer purchases a ticket to a concert or sporting event, that ticket should become their own personal property and they should be able to give away, donate or sell that ticket as they please,” said Senator Lesniak. “Restrictive paperless ticketing is a way for ticket issuers to control the secondary ticketing market and to stifle competition from independent resellers and resale marketplaces. By ending this practice in New Jersey, we can ensure that consumers have the right to do with their purchased item – the ticket – as they wish.”
Senator Lesniak noted that while restrictive paperless ticketing currently only constitutes about one percent of event tickets sold, this practice could become much more popular, particularly since it can be such a cash cow for ticket issuers. Not only can ticket issuers collect convenience fees for the initial sell of the tickets, but they can collect additional fees from both the initial purchaser and the secondary purchaser for the transfer of the tickets. Ticket issuers can set price restrictions on the secondary market by prohibiting the sale of tickets below face value and setting maximum sale prices, which suppresses the free market of event ticket sales.
“If consumers are willing to pay over face value to see their favorite bands perform or are willing to sell a ticket for less than they purchased it for because they can no longer attend the event, as the owner of that ticket, they should be able to do so,” added Senator Lesniak.
The bill would also outlaw in New Jersey the use of ticket bots – computer software and technology that can quickly purchase online tickets in excess of the amount authorized by the ticket issuer. Earlier this year, Bruce Springsteen fans fell victim to ticket bots when the Ticketmaster site received two and half times the typical volume for a major sale, freezing their system for nearly two hours as these computer programs sold out the New Jersey dates of Springsteen’s Wrecking Ball Tour. Minutes after the sale began, tickets began popping up on secondary sales sites for nearly $7,000 a piece.
“While regular New Jerseyans are hitting refresh on their browsers trying to score hot-item tickets, unscrupulous brokers are using computer software and technology to jump to the head of the line and get around set purchasing limits. By outlawing these practices, we can level the playing field for all consumers to purchase tickets,” said Senator Lesniak.
The bill would provide transparency for consumers on the cost and availability of event tickets. The bill would require owners and operators of a venue or event to publically disclose in advertising and on the tickets the price of the ticket, taxes, surcharges and fees in connection with the initial sale. They would also be required to include in advertising the number and price of tickets that will be initially offered to the public in every class, tier or level and the number of additional tickets that may become available to the public at a later date. The owners and operators of a venue or event must make this information available at the locations where tickets will be sold and online at least three days and no more than 15 days prior to the initial sale of tickets.
The bill would prohibit the practice of owners and operators of venues or events bypassing the initial sale of tickets and putting them directly on the secondary market at a price higher than the face value.
“The ticket sale industry often conducts their operations under a veil of secrecy with the number of tickets put on sale to the general public well below the number of seats and tickets available for the event,” said Senator Lesniak. “With this legislation, ticket retailers would disclose the number of tickets made available to the public and at what cost, tempering consumers’ expectations on their chances of obtaining tickets and providing them with enough information to make the best purchasing decisions for themselves.”
The bill would also protect consumers by requiring that ticket issuers, resellers and online marketplaces guarantee a full refund to the consumer if the event is cancelled, the ticket does not grant entry to the event or the ticket does not match its advertised description.
A violation of the bill’s provisions would constitute a violation of the state’s Consumer Fraud Act, which is a crime of the fourth degree, punishable by a fine of up to $10,000 for the first offense and up to $20,000 for each subsequent offense.
Bergen and Union Counties’ Boards of Chosen Freeholders as well as the Borough of East Rutherford have passed resolutions condemning the use of restrictive paperless ticketing and have encouraged the Legislature to take action to protect consumers from unscrupulous ticketing practices. Monmouth County Consumer Affairs has also condemned these practices.
The bill was approved with a vote of 5-1. It now heads to the Senate Budget and Appropriations Committee for further review.