If you're new here, you may want to subscribe to receive updates by email or get my RSS feed. Thanks for visiting!

This is a very common question.  Buyers and Sellers want to know if it is illegal to sell tickets over face value.

This simple question is really 3 questions:

1.  Is it illegal to sell tickets over face value?

2.  Is it illegal to buy tickets over face value?

3.   What is the likelihood I will be prosecuted?

Answers:  Maybe, Maybe, and Maybe.

The laws on buying and selling tickets vary by state, but most states allow sellers to set their own pricing, and buyers to decide how much they want the tickets.

In fact, several states including Florida, New York, and Connecticut have recently repealed their laws against “scalping.”  Some repealed the laws because it is hypocritical to say citizens can buy a house, car, baseball card, artwork or a mutual fund and sell it for a profit - but tickets cannot be sold for a profit.

Other states repealed the laws because they were ineffective against sales made over state lines.  Even when states laws do apply, it is very expensive and time consuming to try and investigate an Internet sale of tickets over face value.  It’s much more cost effective to arrest a dozen or so sellers at a game than it would be to locate a dozen sellers online.

But the single biggest reason states are making “scalping” legal is that it actually lowers the average cost of the tickets on the secondary market.

What?

I know - this is counter-intuitive, but consider the following:

1.  When it is illegal, only a few individuals will risk buying the tickets for the purpose of resale.  Because only a few have tickets for sale, and plenty of people still want them, prices go soaring.  (Small supply, large demand.)  Think of illegal drugs.  They would be much cheaper if legalized.  Or alcohol.  During prohibition in the United States, when alcohol was illegal, prices soared making criminals very wealthy.

2.  Making it legal means more people will buy tickets for the purpose of resale.  More tickets in the hands of resellers means higher supply and greater competition.  Increased competition always leads to lower prices because no one wants to have tickets left after the show starts.

3.  More sellers in the market inevitably means mistakes will be made.  New sellers might actually buy too many tickets for an event.  As the event nears, they are forced to lower their price below face value.  In this scenario, the fans pays less than if they bought it direct.  A great example is the NFL.  At least 30% of the games each season can be bought at face value or lower. 

Because I am not an attorney, I cannot give you legal advice.  I can direct you to a great link that will tell you the laws as they relate to you as a Buyer or Seller.

eBay is the largest marketplace for reselling tickets, and therefore has a great tool to help Buyers and Sellers (and eBay) stay legal.

You just need to answer if you are the buyer or seller, where the event is located, and if you reside in the same state as the event.  Click a button and you know your legal fate!

Check it out here:  http://pages.ebay.com/buyselltickets/rules.html

This entry was posted on Monday, November 19th, 2007 at 8:07 pm and is filed under Become a Ticket Broker, Tickets on eBay, Selling Strategy, Buying Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.