Scalping in Oregon: State Law Gives Event Scalpers a Pass… For Now

The ticket resale market is a perfect little microcosm of our economy. There are dangers and unintended consequences to every decision. And we’re left choosing between a free market bonanza and an overregulated corporate handout.

scalpersI, for one, am glad we live in the wild west: Oregon has no laws against ticket resale.

The tough thing about ticket scalping is that it’s a natural expression of the marketplace.  We can complain all we want about scalping, but it’s the first thing we do ourselves when given the opportunity.

From an emotional standpoint we make arbitrary decisions on what tickets to a show, or game, or event is “worth.”  And principally nobody believes only the rich should be able to attend live events. But unlike movies, or anything you buy in a store these days, live events have a hard limit on the supply, and this hard limit means that people willing and able to pay more will prevail. Whatever someone is willing to pay is what tickets are “worth.”

The strange truth of it, which can also probably be said of many aspects of the economy in general, is that scalping is as natural as adultery.  And like adultery it should be discouraged, shamed, drummed out of polite conversation, but not criminalized. When we make laws banning natural economic reactions, like reselling for a profit, we create perverse incentives and criminalize regular citizens.

Scalping is unfair only in the sense that it exposes the ticket sales to the free market like everything else.

There are things thwarting that free market though, the biggest being the computer bots used by scalpers to buy up tickets en masse. The bots are programs trained on the ticket booth that go into action automatically when the tickets go on sale, circumventing buying limits and real people, perverting the buying where at least everyone with enough money has a fair shot.  According to one study actually commissioned by Ticketmaster, the nations largest “authorized reseller”, as much as 60% of tickets for some shows go to scalperbots .

In Oregon, we actually did go after the scalperbots. The only law we have on the books regarding ticket resale is a 2009 house bill which doesn’t prohibit the act of reselling tickets at all, but it “prohibits person from intentionally selling or using software to circumvent, thwart, interfere with or evade any control or measure that ensures equitable distribution, sale or resale of admission tickets for entertainment event.” In short, it makes using bots to evade ticket buying limits illegal. The bill, HB 2673, which was sponsored by Corvallis’ own representative Sarah Gelser (D), actually required venues to disclose a great deal of information about the numbers of available tickets as well, but that was before it was amended.

That additional language in the bill would have had a debatable impact on actual ticket scalping, but it was campaigned against by eBay and predictably got excised from the final legislation.

You see eBay owns StubHub, an “authorized reseller” similar to Ticketmaster (I only put the term “authorized reseller” in quotes because it is shorthand for “legalized scalping conglomerate”). And these “authorized resellers” have a monopoly, or near monopoly, on the scalping game.  Ticketmaster buys up tickets, marks them up and resells them. That’s literally the exact same thing the scalper outside the stadium does.

Large scalping companies don’t want scalping to be illegal, per se, they just want it illegal enough that they’re the only ones who can get away with it.

Unfortunately there are unintended consequences to scalping and the laws setup to stop it. A good example of both in action is the Penny Arcade Expo in Seattle. Known as PAX, the gaming expo hosts over 90,000 gaming enthusiasts for a 4 day extravaganza of video, board and role playing games.

With tickets selling out faster every year, organizers didn’t want the event to fall prey to the price inflation of scalping, so they tried increasingly draconian control measures on the ticket buying: limiting the number of weekend passes available, limiting the number of single day passes one person could buy, not sending out the actual entry badges until a week before the event.

None of these measures really work.

Currently, on eBay, a full set of passes for this year’s PAX go for around $300, a 250% profit on the face value. But a lot of the tickets on eBay are from genuine buyers, not scalpers.  Because of how fast the event sells out, and how much the tickets go for, people can’t rely on buying just for themselves and hope their friends get a set too.  Everyone has to overestimate the number of tickets they’ll need and then sell off the extras.  Who can blame them if they sell them for as much as they can? Who can blame the scalpers either, really?

There is currently a bill in front of our legislature that will end Oregon’s lasses faire attitude toward scalping. HB3510 was still being debated when the state legislature adjourned for the year on July 9, and will be picked up again this coming February. It explicitly makes it illegal to resell tickets before they’ve been released for sale by an authorized reseller.

If that sounds like a bad market manipulation for the sake of corporate interests that could, through its murky wording, make criminals of thousands of law abiding citizens, that’s because it is.

Of course there are going to be horror stories, like the guys who scalped tickets to see the Dalai Lama speak this past May at University of Oregon, for over 10 times their face value. But that is not a compelling reason to pass the bill, which was sponsored by a representative whose staff member had a relative who paid more than face value for a ticket. Talk about your compelling reasons.

For now, at least, out here we can still make the decision for ourselves, and the reselling of a ticket is still a dirty but legal business between two consenting adults.

By Ygal Kaufman