Ticket Scalping Crackdown in Boston
The Boston Globe has been running a series of stories about renewed interest in enforcing the Massachusett’s anti-scalping laws. One story reported that 6 people were arrested outside Fenway on opening day, and ticket scalpers themselves were apparently scarce because they knew that the police would be looking for them.
This story has gotten me thinking about the real effect of ticket scalping laws. A judge in one of the scalping cases wrote, “Our Legislature has recognized the disenfranchisement of the public from attendance at public events as a result of inflated ticket prices since 1924.” Presumably, the enforcement of ticket scalping laws keeps the price of tickets down, thereby enabling the general public (as opposed to a wealthier subset) to buy tickets.
I keep thinking that this isn’t going to work quite as advertised. If ticket prices for sold-out games get capped at face value, in theory ticket scalpers won’t operate because they can’t earn a profit on tickets they manage to get. However, there are problems. First, ticket scalping laws aren’t enforced very well. Second, and the thing I’m quite curious about thinking through, it seems to me that prohibiting the monetary resale of tickets encourages their effective scalping by a form of barter that still favors the wealthy.
If tickets are scarce (the only situation in which scalping is interesting), the rational promoter of an event will raise ticket prices fairly high. That alone begins to price “ordinary” people out of the event. If tickets remain scarce in the face of high prices (certainly the case with respect to Red Sox tickets – the highest in the country), those with the financial or other means to acquire tickets gain assets that are effectively traded for something other than direct cash payment. For example, law firms buy tickets and take their best clients to the games. There’s nothing wrong with this, of course. I’m simply observing that the tickets get allocated on the basis of bringing business to the law firm. If the law firm had sold its tickets for cash, that would be illegal. But giving the tickets to a good client is as good as selling them because it inclines the recipient of the largesse to continue bringing very profitable business to the firm. Indeed, the firm has good reason to use its wealth and connections to get lots of good seats because the scarcity of tickets makes giving them to clients particularly valuable. They are, in effect, “scalping” the tickets by giving them as gifts to their best clients, who pay by bringing business to the firm.
With all this in mind, I’m curious whether anti-scalping laws actually wind up restricting tickets to a smaller segment of the population than would get them in the absence of those laws. If there were an open market for ticket resale, the price of secondary market tickets would be high. However, they’d go to anyone who had the money to pay the price. By contrast, if anti-scalping laws exist, tickets still go for a high price (namely doing good business with ticket holders), but they go only to those with social or business relations with ticket holders.
There are, of course, effective ways to make sure tickets don’t get resold. The Red Sox have opened up a section of the park to same day sales in which the purchaser of the ticket must enter the park immediately after purchase. But it may be that truly effective methods of stopping resale aren’t worth the fuss or commercially not viable.
Anyway….just a few random thoughts on a Thursday afternoon.