Ontario starts crackdown on ticket resale above face value

The Ontario authorities has begun cracking land on fine scalpers and resale websites to do trusted they're complying with new rules brought in last month that cap the resale price of tickets at face value, as some ticketing platforms still openly list tickets for well above their original price.

Those resellers include ticket brokers as well as big companies like StubHub and SeatGeek, according to the minister.

"Whether you're a small vendor or a large vendor, you're part of the secondary market, you are going to be receiving a letter and you are gonna be receiving an inspection," Crawford said.

The rule was passed as part of Ontario's provincial budget, and prevents people from selling or enabling the sale of tickets for more than they were originally bought for.

Minister says days of overpriced resale are over as enforcement begins

This week's enforcement blitz by inspectors might include phone calls with resellers about their business practices, asking for relevant records, site visits, and enforcement action including fines or charges, according to the ministers office. Customers can also report concerns about possible violations to Consumer Protection Ontario.

A spokesperson for the minister said fines for violations can range from $3,000 to $250,000.

The letter — dated April 30, about a week after the new rule went into effect — details the inspection process, and that enforcement action can be taken if they don't comply.

Despite the coming enforcement, some companies are still selling tickets for more than face value.

StubHub, for one, lists the face value of each ticket on its website. But a more detailed breakdown of the price for some tickets during checkout shows the price, before fees and taxes are added, at far more than face value.

On SeatGeek's site, no face value is given. But when compared to the face value listed on Ticketmaster's site for similar seats in the same section, SeatGeek lists tickets for far higher prices.

Vivid Seats and Gametime's sites tell a similar story — where comparable tickets are listed for far more than the face value in the same section on Ticketmaster, which has since rejigged its site to comply with the law.

Each of the companies said they were working with the government to follow the rules. SeatGeek said they were "working to comply," while Vivid Seats highlighted that big regulatory changes like this require guidance to be compliant.

Gametime's chief commercial officer Larry Martin said in an emailed statement that his company is "co-operating fully and remain[s] committed to resolving these matters appropriately."

However, he said StubHub is still trying to figure out from the government whether the price cap applies to listings that were posted before the new law went into effect, so some older tickets might still be above face value.

That leaves StubHub relying on the reseller to tell them what the face value is, plus their own "due diligence," according to Mulqueen.

While Mulqueen says StubHub will comply with the law, he wishes these compliance details could have been sorted out before the rule came into effect. 

"I think there's a lot of uncertainty amongst some of … the lawmakers, amongst some of the regulators and certainly amongst not just us, but across the industry," Mulqueen said.

StubHub parent company director says compliance is of the utmost importance

Minister Crawford says he knows companies need time to make technical changes to adapt their systems to be compliant with the law.

"We want to work hand-in-hand with these companies. We're not here to put the hammer down at this point," Crawford said.

But, "as time moves on and if we don't see any changes with certain companies, they will be talked to and fined."

When asked about companies like StubHub that still have tickets above face value for sale, Crawford said they should act quickly.

"If they are blatantly doing that at this point, I would encourage them to take those down very quickly."

Vass Bednar, managing director of non-partisan think-tank The Canadian SHIELD Institute, says some of these compliance details raised by StubHub are fair, and do take some time to work out.

"A public policy change unfortunately doesn't change reality overnight," Bednar said. "It just changed how the market is supposed to work."

But online tickets are a rare case where compliance is highly visible. Given Ontarians are taking notice of tickets being sold for more than face value, Bednar says it will be important for the government to start enforcing quickly.

Ticketmaster delists resale tickets in Ontario after bill passed

Still, some experts say enforcement of a cap isn't possible. Pascal Courty, an economics professor at the University of Victoria, says limiting the resale price will drive people off of verified resale platforms like StubHub and SeatGeek and toward unofficial channels, where scams are more likely.

"If a small broker wants to trade outside the main platform in the dark with someone who wants a ticket … as long as the owner of the ticket can convince the buyer that the ticket is real, both of them wanna do it, what can the government do to prevent [it]?" Courty said.

Bednar says the black market is a concern, but expects the government's new rule will limit a good deal of the "price gouging."

"People are going to find ways to resell their tickets above face value, but the new law should be making it harder … for that to occur, making it not the norm. And also changing our own expectations as consumers, as fans who want to support artists and sports teams."

Journalist

Writing by Abby Hughes. Reporting by Dave Seglins, Albert Leung and Abby Hughes

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