Ticket Scalping Soon to be Legal In Missouri

[gblowfish]

Apologies if previously posted:

Chiefs were, of course, the LAST to be on board. Story from St. Louis Post Dispatch:

No more $79 paper clips sold with tickets at 'face value'

By Matthew Franck and Kim Bell
ST. LOUIS POST-DISPATCH
09/02/2007

People trying to skirt Missouri's anti-scalping law have come up with some creative ways to make a profit on sports tickets.

Consider the St. Louis man who on Saturday sold two tickets to a Cards-Cubs game on eBay for a $79 profit.

To circumvent the law, he said that he was selling the tickets at face value but that any additional proceeds would pay for a "decorative paper clip" to fasten the tickets.

Meanwhile, fans who bought last-minute tickets on StubHub.com to this weekend's Cardinals games with the Reds had to drive to Fairview Heights to collect their tickets.

The broker avoids Missouri's anti-scalping law by conducting transactions outside the state. Missouri's scalping law made it a misdemeanor to resell a sports ticket for more than the printed price. Legislators say that enforcing it especially with the advent of the Internet, has been nearly impossible and pointless.

And so the Missouri Legislature voted last week to do away with the ban on scalping for sporting events. The measure saw virtually no debate.

The bill was sent to Gov. Matt Blunt's desk Thursday and will take effect 90 days after he signs it.

The measure places no conditions on ticket reselling. It also prohibits cities from imposing their own anti-scalping laws.

All of the major sports franchises in Missouri agreed on the legislation. The Kansas City Chiefs were the last to get on board.

"We convinced ourselves it (scalping) was something that's impossible to stop," said Bob Moore, head of public relations for the Chiefs. Now, the club is going to come up with its own website plan for ticket resale.

In essence, if you can't beat 'em, join 'em.

Or as Mike Naughton, vice president of finance and ticketing for the St. Louis Rams, puts it: "With the Internet, the resale business has gotten so large, and there's no way to police it, so we might as well open it up and get out there too."

FEWER RULES

The new legislation is less restrictive than a plan backed by legislators earlier this year. It was vetoed by the governor, who objected to unrelated elements.

The earlier bill would have allowed local governments to continue regulating ticket reselling. It also would have prohibited people from buying more than 20 tickets, in hopes of preventing anyone from cornering the market.

But even the author of that 20-ticket limit has since decided to support a completely open system.

"The more I looked into it, the more I supported letting the market work in its purest form," said Sen. John Loudon, R-Chesterfield.

Loudon said teams had policies in place to prevent the purchasing of hundreds of tickets for resale. Otherwise, he said, teams would face a public relations nightmare if greedy buyers gobbled up all the best seats.

Officials from nearly all the state's major teams — along with ticket reselling companies — testified in legislative hearings that legalized scalping would bring more resellers to the market, lowering prices in the process.

"When you flood the market, everyone is allowed to sell and no one is worried about the repercussions," said Sean Pate, a spokesman for StubHub, an Internet ticket-selling unit of eBay.

But some legislators say they're skeptical.

"I'm just concerned about tickets being priced out of regular people's ability to pay," said Sen. Joan Bray, D-University City.

Some economists and academics support Missouri's the repeal. Their research suggests that consumers are protected and prices fall when scalping is legalized.

Marianne Jennings, a professor of legal and ethical studies at Arizona State University, said reasons for that trend were simple. As penalties for scalping are removed, sellers come to the marketplace. And unlike the illicit market, the new marketplace provides consumers with a more legitimate transaction and the ability to compare prices and avoid being gouged.

Jennings said the rising costs that many feared were instead replaced by a "calming effect" that reduced prices.

TEAM ACTION

Years ago, sports franchises supported anti-scalping laws.

Now, with the advent of the Internet, teams want a piece of the action. Across the country, teams charge transaction fees to allow reselling on team websites. Other teams have signed exclusive agreements with Ticketmaster to become their official secondary provider.

Earlier this month, StubHub struck a five-year deal as the official online ticket reseller for Major League Baseball, with details pending.

The sports franchises say their resale services will be secure. Joe Strohm, vice president of ticket sales for the Cardinals, says that someone who buys from a street scalper cannot be sure of the ticket's validity.

But by using the team's website, a ticket buyer is guaranteed that it will be accepted at the gate, Strohm said. In this transaction, the old ticket's bar code is canceled, and the buyer can print his or her ticket at home.

Sports teams will clearly benefit under the new law, as sellers will be able to set their prices above face value, with teams capturing a percentage of higher prices.

Even though the new law legalizes scalping, teams are eager to keep scalpers off their property.

"If we have tickets to sell before a game, we don't want to be competing with someone right outside our window," said the Rams' Naughton.

Sen. Ryan McKenna, D-Crystal City, said in hearings last week that he was skeptical that consumers would benefit as much as the teams.

"When I see every major team coming up here (to the Capitol), that raises a red flag to me," he said.

BUCK THE SYSTEM

The booming business of ticket resale has been evident in the past few days on eBay, as sellers rush to cash in on coveted Cubs-Cards games.

Such transactions are technically still illegal if tickets are sold for more than face value. Even so, several tickets were selling above printed values, despite a warning that the auction would be terminated if prices rose above face value. Officials from eBay could not be reached for comment.

The company had testified in favor of repealing Missouri's law.

Saturday's eBay transaction with the "decorative paper clip" was for two tickets to a Cardinals-Cubs game. The tickets were valued at $110 each, including unlimited food and beer and access to an air-conditioned club box. The pair went for $299, with the paper clip ostensibly fetching $79.

Reached by telephone, the seller said it was ay of thumbing my nose at the whole setup."

Sen. John Griesheimer, R-Washington, who sponsored the legislation in the Senate to lift the scalping ban, said it was silly to enforce a law that could be skirted by simply selling a baseball along with a ticket.

"If you have a ticket to a playoff ticket and you want to sell it," he said, "you ought to be able to do that."

mfranck@post-dispatch.com | 573-635-6178