New York Cracking Down on Online Ticket Brokers

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April 28 — New York Attorney General Eric T. Schneiderman (D) is cracking down on ticket brokers, using his enforcement powers and proposing legislation to strengthen the state's existing ban on the use of so-called bots.

Six unlicensed ticket brokers will pay $2.7 million in fines and take other steps to protect consumers under agreements announced by Schneiderman April 27. One day later, the attorney general said he will propose legislation this year to increase penalties for violation of ticket laws and make the use of ticket bots a criminal offense.

The legislation would go beyond the current requirements in the state Arts and Cultural Affairs Law to expand the types of ticket bots that are prohibited and ban resellers from selling or offering to sell tickets that they know have been illegally acquired using ticket bots.

The crackdown is the next step in an ongoing Schneiderman investigation into the marketplace for tickets to sporting events and concerts by third-party brokers. A Schneiderman report in January found that brokers were violating the law by using bots to snatch up large amounts of tickets and then reselling them at exorbitant prices (21 ECLR 137, 2/3/16).

“The attorney general offers up fresh evidence that the ticket-scalping market is rigged, the opposite of an open transparent marketplace,” Russ Haven, legislative counsel for the New York Public Interest Research Group, said in a statement.

“The Legislature has created a wild west environment for ticket sales,” he said. “The attorney general is proposing to close a loophole in the state ban on the use of ticket-buying software and, most importantly, calling for it to be illegal for so-called ticket brokers to fence tickets illegally obtained using computer programs to unsuspecting New York fans.”

Fines

Under the agreements, Flying Falco Entertainment will pay a $1.1 million fine, while TicketToad will pay $650,000, All Events Utah will pay $325,000, Just In Time will pay $300,000, A2Z Tix will pay $260,000 and Charm City will pay $100,000.

Each company sold tickets to events in New York without being licensed by the state, Schneiderman said. TicketToad, A2Z, Just In Time, Flying Falco Entertainment and All Events Utah also violated state law by using ticket bots to purchase large numbers of tickets on websites such as Ticketmaster.com before the tickets could be obtained by consumers, according to Schneiderman.

The settlement agreements require the companies to obtain ticket reseller licenses and to refrain from using bots.

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y., at gsilverman@bna.com

To contact the editor responsible for this story: Joseph Wright at jwright@bna.com