After being gouged, Utah lawmaker seeks to limit ticket scalping markups

Legislation would limit resellers to charging no more than 15% above ticket face value.<br>

(Leah Hogsten | Tribune file photo) A scalper sells tickets along State Street in Sandy before Real Salt Lake's first game at Rio Tinto Stadium in 2008.

State Rep. Lynn Hemingway was eager to see his actress daughter-in-law, Rose Hemingway, in the traveling Broadway production of “Kinky Boots” when it came this year to the new Eccles Theater in Salt Lake City.

But expected complimentary tickets to opening night fell through, so the Millcreek Democrat quickly looked online for tickets from resellers. “It cost me $400 for two tickets,” he complains. Top face value for a ticket from the box office was $85.

The price gouging — and similar abuses he’s heard reported by constituents — upset him enough that he’s resurrecting a bill he ran unsuccessfully seven years ago that would ban scalpers, operating online or in person, from charging more than 15 percent above the face value of tickets. He is also seeking other ways to limit these transactions.

“It occurred to me that the taxpayers of Utah put up a little money for that theater and other theaters [plus sports arenas] in Utah,” Hemingway said. ”It doesn’t seem fair to me that people are allowed to go buy up those tickets, and then sell them back at a huge [profit] margin and keep people from going to the theater.”

He and his family love the theater, and he says they want it to be affordable. His son, Geoffrey, met and married Rose when they both starred in the traveling Broadway production of “Mamma Mia.”

Al Hartmann | The Salt Lake Tribune Representative Lynn Hemingway, D-Millcreek.

Real problem?

Ticket resellers say Hemingway is trying to solve a problem that doesn’t really exist, unless someone who is buying scalped tickets is careless.

“I don’t think Mr. Hemingway looked over the market, because most people couldn’t give away a ‘Kinky Boots’ ticket,” said Bob Hunt, owner of Salt Lake City-based Premier Tickets, which resells tickets to events around the nation.

“Tickets very seldom sell for more than face value in Utah. Most shows rarely sell out here,” he said. “If he’s paying $400 for ‘Kinky Boots’ tickets, it’s time for a new legislator if that’s who we have writing our laws.”

Hunt says he often obtains his tickets by buying season tickets — which cost less than face value — or from people who cannot buy some they bought and will sell at a discount.

“Tickets very seldom sell for more than face value in Utah. Most shows rarely sell out here.”<br>— Bob Hunt, owner of Premier Tickets<br>

For example, he says he has 14 Utah Jazz season tickets that he bought last year for $165, but they had a face value of $240. Also, he said the Jazz use “variable pricing” to sell some individual tickets to prime games for up to $500 in those spots. He wonders how Hemingway’s bill might affect reselling his tickets for up to what the Jazz charge through its variable pricing.

Otherwise, he said Hemingway’s measure might actually help his local sales. “It would get rid of a lot of the out-of-state people” competing with him because of possible hassles and limits.

Congressional action

Hunt notes that Congress recently addressed what he believes was a bigger problem by outlawing bots, or computer programs that evade the security systems of ticket websites such as Ticketmaster to scoop up the best tickets and sell them at inflated prices.

The Better Online Ticket Sales Act last year made it illegal to circumvent the security measures of ticketing websites. It gave enforcement authority to the Federal Trade Commission, which may impose hefty fines.

Advocates such as Lin-Manuel Miranda, the creator of “Hamilton,” contended that bots fed a high-priced resale market that pushes tickets out of the reach of ordinary customers with no benefit to performers, particularly for hot events like “Hamilton.”

Ticketmaster has estimated that bots have been used to buy 60 percent of the most desirable tickets to many shows. The New York attorney general last year found abuses such as a single scalper buying more than 1,000 tickets in less than a minute for a U2 concert at Madison Square Garden.

Unintended consequences?

Gary Adler, executive director and general counsel of the National Association of Ticket Brokers, also has sharp criticism of Hemingway’s proposal. “It’s a terrible idea.”

Adler said he is not aware of any state that has enacted a price cap in the past 20 years, while several have gone the other direction and removed them.

“There’s a reason for that,” he said. When price caps are removed, “prices go down. It’s simple economics…. If you try to choke off through these measures the supply of tickets in the secondary market, all you’re doing is creating higher prices for the consumer.

“You will drive legitimate brokers and members of our association who provide great service out of the equation, and you bring in people who are not doing it in the light of day,” Adler said.

“You usually are only punishing local businesses,” he added, “because the idea that you’re going to regulate resale outside your limits is a very hard one to enforce.”

Exploring options

Hemingway acknowledges he isn’t sure about the best way to fight ticket gouging by scalpers. He says he opened a bill file on the topic in part to see what kind of ideas — and opposition — it may generate.

“I’m just trying to figure out if there is something we can do to allow people who can’t afford $400 for tickets to go to the theater,” he said.

Hemingway adds that he has not yet figured out solutions to problems that killed his earlier bill in 2010 — which he says he pushed at a time “when it was tough to get a Utah Jazz ticket” and “University of Utah football was just beginning to become big time” and scalpers were swooping up many available tickets.

“The reason it didn’t pass before is because we couldn’t figure out how to enforce it,” he said. ”We couldn’t figure out a penalty.”

Hemingway adds that he has legislative staff researching laws in other states “to see if we can come up with something that makes sense.”

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