Ticket Industry Bracing for New York Law Expansion

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By Gerald B. Silverman

Ticketmaster, StubHub, and other online ticket sellers are again bracing for legislation in New York that could significantly impact the multi-billion-dollar ticket industry.

Four months after the state’s ticket bot law took effect, the legislature is considering a number of bills to extend and possibly expand a separate state law governing ticket sales. The law, which has been extended several times since 2010, expires June 30.

Any changes in the law would have a significant impact on the ticket industry since New York City is the home to Broadway and several professional sports teams. Ticket sales in New York totaled at least $3.8 billion in 2016, according to Attorney General Eric T. Schneiderman’s (D) office.

The ticket bot law, which took effect in February, criminalizes the use of computer software known as bots to buy up large amounts of tickets. A separate law, generally known as the ticket scalping law, governs ticket sales for entertainment and sports events.

Extend or Change?

One of the critical issues facing lawmakers is whether to simply extend the current law or enact changes that supporters say would make the ticket marketplace fairer for consumers.

Gov. Andrew M. Cuomo (D), in signing a one-year extension in 2016, said he wouldn’t sign another extension unless additional changes were made to the law. He appointed a working group to study the issue. Schneiderman is also pushing for a comprehensive bill, rather than an extension.

“Department of State officials have been meeting with industry stakeholders for months to gather information and help craft further reforms to strengthen consumer protections,” Rich Azzopardi, a spokesman for the governor, told Bloomberg BNA May 22. “Those discussions remain ongoing.”

Ticketmaster issued a statement saying it looks forward to “engaging with legislators in Albany on ways to continue giving artists, teams and venues in New York State more tools for selling their tickets and engaging with their fans.”

Laura Dooley, senior manager of state government relations for StubHub, told Bloomberg BNA in a May 23 email that the company “supports the extension of the New York state ticket statute, which benefits fans by ensuring consumers have choice and competition in the ticket market.”

The National Association of Ticket Brokers trade group declined a Bloomberg BNA request for comment.

Changes Urged

Schneiderman, whose January 2016 report on the ticket industry laid the groundwork for state action, is calling for three primary changes in the law. He wants a limit on ticket holds and pre-sales; a ban on the speculative sale of tickets—sales by ticket brokers before they have the tickets in hand; and a requirement that online ticket resale sites provide a space where ticket brokers can post their license information.

Ticket brokers are currently required to post their license information but are not able to do so on resale sites, according to a May 18 letter to legislative leaders from Brian K. Mahanna, Schneiderman’s chief of staff.

“This means that, with every transaction, brokers are violating the law and consumers are deprived of their right to know if they are purchasing from a professional seller,” Mahanna said in the letter.

“While last year’s bot legislation was important, it did not solve all of the problems that ail the state’s ticketing industry,” Mahanna said. “In short, the industry is not fixing itself and New Yorkers continue to suffer as a result.”

Three Bills

There are three ticket sales bills in the Legislature this year, including one ( A. 7701, S. 6004) that would extend the law for one year.

A second bill ( A. 7398/S. 5178) would require online ticket resellers to post the face value of tickets, the portion of the ticket price they collect, and the number of tickets available for sale. It would also require primary sellers to disclose when they are transferring consumers to a secondary seller and require all ticket sellers to disclose their service charges.

Sen. Daniel L. Squadron (D), chief sponsor of S. 5178, told Bloomberg BNA May 23 that New York has a “long way to go” toward a law that puts fans’ interests first. “We’ve made progress on beating back ‘bots,’ and it’s important this year delivers progress on transparency, fair access, and ending charity ticket profiteering—cornerstones of a law that works for everyday New Yorkers,” Squadron said.

The measure also would add a statutory definition for “online resale marketplace” and would ban reselling tickets within 48 hours of their primary sale to the public.

A third bill ( A. 2895) would: make ticket speculation a criminal offense; require ticket resellers to post a bond with the state; and require sellers and resellers to report sale information to the state for the study of purchasing trends.

“The public deserves the strongest protections possible, especially given the highly sophisticated nature of the ticket scalping industry,” Assemblyman Thomas J. Abinanti (D), sponsor of A. 2895, told Bloomberg BNA May 23.

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: Keith Perine at kperine@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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