A note on history: Making a profit from ticket markup

A brief history of ticket scalping

By Caroline Ho, Arts Editor

Ticket scalping has plagued consumers for well over a hundred years, and we continue to scratch our heads at the government’s inefficiency at dealing with the problem.

Ticket scalping is the practice of buying tickets to later resell them at a higher price. The origins of the term supposedly come from the practice of literally removing the scalps of enemies to collect and sell—obviously a very painful process for the victim, comparable to the unpleasantness of having to buy tickets at a marked-up price.

In North America, the problem has been around since the 19th century, when speculators would buy up a lot of tickets for theatre productions, operas, and other entertainment shows only to resell them on the black market, to the dismay of would-be attendees. Even in the late 1800s, many people were suspicious of the idea that theatre managers were colluding with speculators to withhold tickets so they could be resold at inflated prices. Some individual states in the US started passing anti-scalping legislation in the late 1800s and early 1900s—but the US also imposed federal regulations banning these state laws on the grounds that they unconstitutionally interfered with private industry.

Ticket scalping continued to be a growing source of controversy throughout the 20th century. In court cases, newspaper editorials, and in front of all kinds of entertainment venues, people debated the legitimacy of the practice. Some argued that governments should not have the power to regulate free markets by banning scalping, and pointed out that it was often more convenient for consumers to buy from scalpers at slightly higher prices than to line up for hours to buy a ticket themselves; many others protested the unfairness of third party brokers making such a huge profit. The issue only grew alongside the proliferating industries of music, theatre, professional sports, and more.

Then the popularization of the internet introduced a huge host of new problems to ticket scalping. As soon as consumers could purchase tickets online without having to physically wait in line, buying became a lot more accessible and convenient—and so did resale. Soon enough scalpers were using bots that automatically bought tickets in bulk as soon as they were released for online sale.

The ticket resale site StubHub was founded in 2000, and within a few years the company was making millions of dollars, and becoming embroiled in several legal battles with professional sports teams. Another major online reseller, TicketsNow, was established in 1999. StubHub was sold to eBay for $310 million in 2007, and TicketsNow was bought by Ticketmaster shortly after. Ticketmaster had already been a major headache for consumers because of its “convenience fees” charged on top of ticket prices, but its direct involvement in the resale market fuelled the controversy and accusations of monopolization even further. The company has faced threats of legal action in Canada and the US over the practice of automatically redirecting buyers from Ticketmaster to the marked-up prices on TicketsNow.

This isn’t to say that online reselling is always bad, because a lot of the time you can find tickets for similar or even cheaper prices than primary vendors. Reselling becomes a problem when bots buy up all the tickets the very minute they’re released, leaving none for fans. Another issue is when artists themselves withhold significant portions of their tickets to sell to fans who pay for early access or to secondary vendors directly, which is done by a lot of artists including Celine Dion, Coldplay, Kanye West, and countless others.

With the problem so prevalent, one might expect governments to take more action to curb the practice, rather than the pitiful efforts that have taken place in Canada, where resale is regulated at the provincial level. Although Quebec has laws making ticket resale illegal and Saskatchewan bans it under some circumstances, most other provinces—including BC—have no laws against the practice. It used to be illegal in Ontario, but in 2015 the provincial government tweaked its laws to allow resale under certain conditions. Recently, discussion of the practice of scalping flared back into the headlines with the Tragically Hip’s Man Machine Poem tour last year, when tickets across Canada were sold out almost immediately, all thanks to scalpers. Despite the outrage from consumers and the many people in all affected industries, the issue remains unresolved.