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Applying Anti-Scalping Laws To Internet Ticket Providers
E-businesses, by forming networks of season ticket holders and contracting with entertainment venues, provide Internet customers with entry passes for concerts, sports and other spectator events. Generally, Internet ticket providers are in the business of buying and selling tickets to such events above face value. Some parties have equated such Internet ticket providers with ticket scalpers and claim they are acting unlawfully. In particular, some state anti-scalping laws have been applied to Internet ticketing transactions, resulting in both criminal and civil sanctions. However, the application of proper Internet notices and appropriate Web site access limitations may render such state anti-scalping laws moot.
Twenty-nine states have anti-scalping laws. (See the sidebar at the end of this article.) Anti-scalping statutes typically have restrictions on time, location, price and the types of events for which tickets may be sold. Under New York Arts and Cultural Affairs Law, for example, it is illegal to resell tickets “within one thousand five hundred feet of a place of entertainment having a permanent seating capacity in excess of five thousand persons.”
Traditional anti-scalping laws have been challenged, but courts have consistently recognized the nuisances associated with ticket scalping and have upheld anti-scalping legislation as being within the “police power” of the sovereign. However, because e-ticket sellers make their deals over the Internet, they don't pose the same types of nuisances associated with traditional ticket scalping. Thus the application of the existing anti-scalping precedent may not be applicable to Internet ticket providers, such as the New York statute noted above.
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