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Will Government action against ticket bots work?

The Government has ticket-scalping in its crosshairs, but law reform mightn't work in practice. Thomas Coughlan reports

Ticket-scalping website Viagogo has drawn criticism both in New Zealand and internationally for its business model which has seen many ticket buyers overcharged, or duped altogether. 

The Government has responded with plans to reform laws around how tickets are sold on the secondary market. “Simply put, consumers aren’t getting a fair deal,” Prime Minister Jacinda Ardern said. 

Work done by Government officials calculated the average ticket resale profit for a recent concert to be $195. Consumer NZ research showed 54 percent of people who responded to a survey had paid more than face value for tickets, 38 percent were charged hidden fees and 40 percent bought tickets from a website they believed to be an official seller. 

The question though, is whether law reform will work in practice. 

Some of the measures suggested by the Government seem relatively easy to enforce, such as price caps on resale tickets or enforcing rules around information that must be disclosed by sellers. The Government has already spoken to TradeMe about how that website could enforce new rules. 

However other rules could be more difficult. 

One of the main concerns is that the websites have allowed online bots to buy up large numbers of tickets, squeezing out legitimate purchasers who are then forced to repurchase the tickets at vastly inflated prices on sites like Viagogo if they want to go to the event. 

In the United States, one broker using bots purchased over 30,000 tickets to the Broadway musical Hamilton, sometimes purchasing as many as 40 percent of the tickets to a single show. 

The plans announced by the Government today included a proposal to ban the use of such bots, but such bans have proved more difficult in practice than in theory. Bans are in place in Australia, the UK, and the US, but enforcing them is difficult.

The ban on bots will likely be a regulatory measure. But launching prosecutions has been difficult overseas.  

A report from The Huffington Post published in February 2018 found the US Federal Trade Commission, which is one of the authorities assigned to enforce federal laws, had not brought any actions against bots despite federal legislation being in place since December 2016. At the state level, New York was the only state of the 13 that has banned bots to have reached a settlement with ticket resellers that use them.

Efforts to prosecute are often hampered by the fact that bots are based in overseas jurisdictions, usually tax havens. 

Representatives from the New Zealand office of ticket selling website TicketMaster did not respond to Newsroom’s requests for comment. But a representative of the company’s US branch told The Huffington Post that bot developers tended to innovate to avoid prosecution.

“The problem is we innovate, they innovate,” they said. 

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