Scalping already prohibited by law, but that provision should be abolished

PUBLISHED : Friday, 16 March, 2012, 12:00am
UPDATED : Friday, 16 March, 2012, 12:00am


Your correspondent J. Ferencova calls for the outlawing of ticket resales at a profit ('It is time to outlaw ticket scalpers', March 8). Section 6 of the Places of Public Entertainment Ordinance already does so. It says: 'No person shall sell ... any ticket or voucher authorising ... admission to any place of public entertainment ... at a price exceeding the amount fixed by such proprietor, manager or organiser.'

This of course outlaws the existence of ticket agencies or exchanges, or even selling at a premium on auction sites such as eBay. Section 6 runs against the principles of a free market and should be abolished. If event organisers wish, as a matter of contract, to make tickets personalised and non-transferable (as airlines do), then they are free to do so. That of course would reduce a ticket's value, because it restricts the freedom of the holder to sell it or pass it to a friend if he or she is eventually unable to attend the event (or take the flight).

There is nothing wrong with reselling something you own if it is freely transferable. Otherwise we would outlaw the resale on the stock market of shares purchased in initial public offerings. Those who buy event tickets for the purpose of resale, who have become known by the derogatory term of 'scalpers', are putting their capital at risk, including the risk of substantial increase in supply by the launching of additional concerts. They perceive that the organiser has underpriced the supply relative to demand, and they should be entitled to take that view.

A way to remove that imbalance would be for the organiser to sell all the tickets by tender and discover how much the public is really willing to pay. In stock markets, we call this 'book building'. Anyone could submit a bid, and the tender would clear at the price of the lowest successful bid for each type of seat on each date. Alternatively, if the organiser wishes to keep the underpricing but eliminate the secondary market, then it could make the tickets non-transferable and subject to identity checks at the door. If the organiser wishes to remove the problem of queues and overloaded websites, then a ballot could be held.

These options apply just as much to concerts as sporting events.

Meanwhile, the government should repeal Section 6 and foster the entertainment industry by allowing ticket agencies and exchanges. This would create legal employment and revenue from profits tax, rather than keeping them underground.

David M. Webb, Mid-Levels