In recent years, the Internet has offered people a global market in which they may conduct business. Many consumers use the Internet to buy and sell tickets for movies, sporting events, and concerts. However, the fact that tickets are sold online rather than on the street just outside of the event, does not mean that buyers and sellers can bypass state scalping laws.
Also, there are federal laws which apply to online ticket sales as well. The reality is that online ticket sales are still subject to some of the same laws as tickets sold on the street and to other laws designed specifically for online sales as well.
Can I Buy Tickets Online Legally?
A person can buy event tickets online as long as they comply with state and federal law. It is important to keep in mind that if a person buys tickets from a person or entity in another state, or if the location of the event is in a different state, the buyer may also be subject to the laws and penalties of that state.
So, a person should not assume that buying tickets from an online auction site is legal in every case. Some online auction sites try to prevent illegal ticket scalping by removing offers that violate state scalping laws, or by reporting illegal transactions to the proper authorities.
The federal Better Online Ticket Sales Act of 2016, commonly known as the “BOTS Act”, was adopted as the law in the U.S. to prevent attempts to automate the process of purchasing tickets en masse using ticket bots. In other words, it is designed to prevent online ticket scalping. This happens when, after buying large numbers of tickets, the buyer later resells these tickets on third-party websites at a higher price than what they paid in order to make a profit. The BOTS Act makes the resale of tickets purchased using bot technology illegal and sets a fine of $16,000 for violations of the act, which is enforced by the U.S. Federal Trade Commission (FTC).
A ticket bot is a software program that automates the process of searching for and buying tickets to events on an online ticket vendor platform, such as Ticketmaster. By using a ticket bot, a ticket broker automates the process of searching for and buying tickets so that it happens in a matter of seconds.
The ticket bot can conduct hundreds or even thousands of transactions at the same time. Ticket bots can do this because they enable buyers to buy tickets in bulk by completing online forms automatically so it is done faster than a human can do it with their keyboards. The ticket bot submits multiple purchase requests at a very high speed. Moreover, it gets around authentication codes on websites that are designed to block the use of ticket bot software.
The result is that most consumers are not able to purchase tickets when they are sold originally and are left with buying tickets on the resale market at a substantial markup. The BOTS Act is designed to make this practice illegal.
Can I Sell Tickets Online Legally?
A person can sell event tickets online as long as they comply with applicable state laws. Similar to a prospective buyer, a ticket seller should be aware that you may be subject to the laws of the state in which purchasers and events are located. Those laws may be different from the law in the state in which the seller resides. So resellers of tickets should be informed about state laws regarding their practice.
States have laws that vary widely from no law at all to laws that prohibit restrictions on reselling tickets. One of the issues involved in ticket resales is whether a reseller needs to collect sales tax on their sales.
Some examples are as follows:
- Alabama: If a person wants to sell tickets at a price greater than the “original” price, they must pay a license tax of $100;
- Alaska: Alaska has no law regarding the sale or resale of tickets;
- Arizona: The reselling of tickets is legal except for resales at prices above the face value of the ticket within 200 feet of the venue or the venue’s contiguous parking lots. So online reselling should not be a problem;
- Arkansas: Statutes in Arkansas prohibit the resale of tickets to college and high school sports events and charitable events at a price that is more than the face value of the tickets. The resale of tickets to non-athletic events over the internet is prohibited until the tickets have first been offered for sale to the public. Arkansas law also prohibits scalping tickets to musical events. But it does allow resellers to add to the price a reasonable charge for “handling” or credit card use;
- California: The reselling of tickets is legal except at the site of the event, i.e., its venue. All ticket sellers and resellers must have a permanent business address from which all tickets must be sold. The address must be shown on all advertisements and solicitations;
- Colorado: Colorado law prohibits interference with the reselling of tickets. So it prohibits an original seller from doing any of the following:
- Limiting the terms or conditions of the resale of its tickets;
- Restricting resale in a subscription or season ticket package agreement as a condition of purchasing tickets;
- Taking away any season tickets or subscriptions if the tickets are resold;
- Imposing any penalty on a ticket buyer if they sell the ticket through a reseller not approved by the operator such as Ticketmaster;
- Denying admission to any ticket holder, because their ticket was resold. The use of online programs to avoid ticket queues or to buy tickets over an authorized limit is prohibited.
- Connecticut: Any person selling a ticket must disclose any service charge that makes up part of the purchase price. Resellers must provide refunds in the event of cancellation, non-receipt of the tickets, or failure to conform to advertising. Also, a reseller must provide customers with their contact information to allow them the opportunity to obtain a refund;
- Delaware: Only the reselling of tickets to games at the Bob Carpenter Sports/Convocation Center at the University of Delaware or at Dover Downs NASCAR races is prohibited;
- District of Columbia: Washington, D.C. has no law regarding the selling and reselling of tickets;
- Florida: In Florida, a ticket reseller must be licensed if it sells a ticket for a price that is greater than the ticket’s face value by more than $1. Any internet website may resell if it complies with statutory requirements such as it must guarantee a full refund of the amount paid for the ticket including any additional fees if: the event is canceled, the ticket holder is denied entrance for reasons other than their noncompliance with regulations, the ticket is not delivered as agreed, and if the website does not disclose that they are not the original seller and do not control original ticket pricing.
- Anyone who knowingly purchases more tickets than the specified limit from the original ticket seller in order to resell them violates the Florida statute. Any person who counterfeits, forges, alters or possesses any fake tickets for admission to a public event violates the statute. Tickets issued by a charity may not be resold for more than $1 above their face value. Finally, the statute prohibits the sale or use of software to get around ticket sale security.
Of the remaining states, most do not have any law. These states are as follows:
- Idaho;
- Iowa;
- Kansas;
- Maine;
- Minnesota;
- Mississippi;
- Montana;
- Nebraska;
- Nevada;
- New Hampshire:
- North Dakota;
- South Dakota;
- Oklahoma;
- Texas;
- Utah;
- Vermont;
- Washington;
- West Virginia;
- Wyoming.
How Can I Protect Myself from State Scalping Laws?
Before buying or selling tickets on the internet, you should get familiar with the applicable state laws. To do this, you may want to speak with an experienced criminal defense attorney who can tell you what the law requires and how you may buy, sell and resell tickets legally online.
If you have already been charged with ticket scalping, an experienced criminal defense attorney can advise you of your legal rights and available defenses and represent you fully in court.
