Missouri’s decision to legalize ticket scalping — selling tickets at prices above face value — marks a significant shift in the secondary ticket market. This change has been met with mixed reactions, from enthusiastic support from some local businesses to concerns about consumer protection.
In this article, we’ll explore the history, economic implications, and potential future effects of legalized ticket scalping in Missouri.
A Long-Awaited Legal Change
The move to legalize ticket scalping in Missouri was welcomed by many businesses that had long awaited this change. Hal Wagner, owner of Ace Sports & Nationwide Tickets, expressed his approval: “We’ve been waiting for that ridiculous law to be repealed,” he said. His business, which buys and resells tickets at prices above face value, is now operating within the legal framework. This change allows Wagner and others to operate without fear of legal action, opening up opportunities for increased revenue.
With the new law in place, businesses like Ace Sports have expanded their operations. Wagner has already opened a new location at Independence Center, seizing the economic opportunities that come with the law’s repeal.
The Reality of Ticket Scalping at Popular Events
Before Missouri’s law changed, ticket scalping was still a common practice, albeit illegal. Events like the Missouri-Kansas football game at Arrowhead Stadium illustrated how prevalent ticket scalping was in practice, even when it was prohibited. As cars filed into the stadium, people were selling tickets on the spot at prices that far exceeded face value.
One ticket scalper, “Bill,” was seen selling tickets with a face value of $30 to $55 for as much as $600, fully capitalizing on the high demand for the game. His justification for these prices? “This is a day to make money.”
The high prices for these tickets demonstrate an important aspect of ticket pricing: they were set months in advance before anyone could have predicted that the Missouri Tigers and Kansas Jayhawks would be ranked 4th and 2nd respectively in the BCS standings. As a result, the face value of the tickets didn’t reflect the actual demand for this particular event.
The Economics Behind Legalized Ticket Scalping
Ticket scalping, in economic terms, is an example of market demand adjusting to supply. When a popular event is underpriced relative to its demand, scalpers step in, purchasing the tickets and reselling them to people who value the event more highly.
Legalizing ticket scalping has the potential to make the ticket market more efficient. Tickets can flow to the individuals who value them the most, rather than those who happen to be first in line. Moreover, secondary markets provide more information about the actual value of the tickets in real time, helping event organizers and venues make more informed decisions about pricing in the future.
However, the newfound legality of scalping does not eliminate all challenges. Missouri Attorney General Jay Nixon raised concerns about the negative impacts of scalping in conjunction with online ticket sales. Nixon has sued brokers who purchased large quantities of tickets for events like a Hannah Montana concert or the Missouri-Kansas game and resold them at much higher prices. His primary issue wasn’t with scalping itself but with the practice of “butting in” — when brokers purchase tickets en masse the moment they go on sale, leaving regular customers with fewer options.
Challenges in the Digital Era
Nixon’s concern highlights a larger issue at play in today’s scalping market: the role of technology. Automated software, commonly known as “bots,” allows ticket resellers to buy large volumes of tickets as soon as they go on sale. This leaves regular consumers with few or no tickets available at face value, forcing them to turn to the secondary market where prices are much higher.
While legalizing ticket scalping may provide more transparency and allow tickets to flow to those who value them most, it doesn’t address the root cause of this problem — the ability of some buyers to dominate the market at the expense of others. As Nixon pointed out, “The elimination of this consumer-protection tool has come at a time when the ability to take unfair advantage of consumers has grown significantly through the Internet.”
The core problem is not the act of scalping itself but the unfair advantage that technology can provide to a small group of resellers. Tackling this issue will require new regulations and innovations to ensure a fair playing field in the ticket marketplace.
The Ethics of Ticket Scalping
While the economic benefits of ticket scalping are clear, its ethical implications remain a topic of debate. Critics argue that scalping disproportionately affects lower-income fans who can’t afford the inflated prices, effectively pricing them out of major events.
Additionally, event organizers often underprice tickets deliberately to ensure a diverse audience. This approach, designed to allow people from different economic backgrounds to attend, is undermined when tickets are bought by scalpers and resold at a markup.
What’s Next for Missouri?
Over the last few years, Missouri’s legalization of ticket scalping has been a notable development in both the state’s and the broader U.S. ticket market. Here’s a breakdown of the key points and shifts:
1. Economic Opportunities for Businesses:
- Since the law was changed to allow the resale of tickets above face value, businesses specializing in ticket reselling, like Ace Sports, have taken advantage of this shift. These businesses can now legally resell event tickets, providing them with significant economic growth opportunities.
- The move has allowed secondary ticket markets to flourish, making ticket reselling a profitable venture and helping businesses expand their operations, such as opening new locations to tap into high-demand areas.
2. Increased Prices for Consumers:
- One of the main concerns following the legalization has been the impact on consumers. With ticket scalping now legal, ticket prices for popular events have increased, which can make attending these events less affordable for average fans.
- The challenge lies in the fact that while the secondary market allows people to buy tickets for sold-out events, they often have to pay significantly above the original face value, creating a barrier for many fans.
3. Advancements in Technology and Scalping:
- Technology has played a significant role in how ticket scalping operates. Bots and automated systems are now frequently used by resellers to purchase large volumes of tickets as soon as they go on sale. This practice leaves fewer tickets available at face value for regular consumers, driving them to the more expensive secondary market.
- This has sparked a broader national conversation on how to regulate or limit the use of bots in ticket purchasing, as this practice exacerbates the inflation of ticket prices.
4. Consumer Protection Concerns:
- Consumer advocates have raised issues regarding the potential exploitation of ticket buyers in this new market environment. The primary concern is that average fans are being priced out of major events because of inflated resale prices.
- Missouri’s government and regulatory bodies may face growing pressure to implement consumer protections, such as caps on resale prices or limits on the number of tickets resellers can purchase using automated methods.
5. National Implications:
- Missouri’s move to legalize ticket scalping is part of a larger, national trend toward accepting and regulating the secondary ticket market. States across the country are grappling with the balance between fostering economic growth through these markets and ensuring fair access to tickets for consumers.
- The evolution of this issue may lead to further changes in ticket sales regulations, such as increased transparency from resellers, stronger consumer protection laws, or regulations on the use of automated purchasing tools.
Missouri’s decision to legalize ticket scalping marks a significant shift in the sports and entertainment ticket market. By allowing tickets to be resold at prices above face value, the state is embracing market forces and letting demand dictate pricing. While this has clear economic benefits, particularly for businesses like Ace Sports, it also raises questions about consumer protection and the fairness of the market.
As technology continues to shape the ticket-buying landscape, Missouri will need to address the challenges posed by automated ticket purchasing and ensure that the market remains fair for all fans. Legalizing ticket scalping is just the beginning of this evolving conversation about the future of the ticket industry.
