Ticket scalping in Hong Kong is just business and should not be overly regulated

Albert Cheng says the resale of tickets for concerts and sporting events is a common business practice that should be allowed to thrive in a free-market economy. Recent calls for more regulation go too far

Hong Kong economy

Albert Cheng

Published: 5:03pm, 19 Apr 2018

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Tickets to stand-up comedian Dayo Wong Tze-wah’s show in July went on sale online last month. They were sold out almost immediately because touts snapped them up, forcing people to buy them at inflated prices. The surge of public anger has caught the government’s attention.

Wong himself has urged fans not to buy the resold tickets, and called for a crackdown on the scalpers. As always, Chief Executive Carrie Lam Cheng Yuet-ngor put on a face of heeding the public’s concerns, and pledged last week to look into making ticket scalping illegal at venues run by the government, as well as the feasibility of adopting a “real name registration” system to curb the practice.

The government is blowing the matter out of proportion. To begin with, stand-up comedy shows and concerts are not basic necessities and have nothing to do with people’s livelihood. The government has other more important and urgent matters of public interest to attend to.

Furthermore, ticket scalping has been a long-standing business activity worldwide and is considered fair and common in all free-market economies.

US$1,400 to see EXO in Hong Kong: ticket touts target K-pop shows

Members of the Korean boy band EXO perform during the closing ceremony of the Pyeongchang Olympic Games in South Korea, on February 25. Touts are charging up to HK$11,000 (US$1,400) for a ticket to the band’s upcoming Hong Kong concerts, when official ticket prices range from HK$480 to HK$1,680. Photo: EPA-EFE / Yonhap

In Hong Kong, any person found guilty of the unauthorised sale of tickets could be fined up to HK$2,000 (US$255), under the Places of Public Entertainment Ordinance. But public venues managed by the Leisure and Cultural Services Department or the Home Affairs Department are exempt.

No doubt, the ordinance should be updated. The government should also consider other changes, such as further limiting the number of tickets that could be reserved for “internal subscription” in government-managed venues. Some venues now allow as many as 80 per cent of tickets to be reserved, with only 20 per cent available for public sale.

However, if even these measures fail to deter ticket scalpers, the practice should be left alone and considered purely a business activity.

Frankly, scalpers have to invest time and manpower to secure the tickets, as well as bear some risk – just like any other business operator. Also, resales offer an alternative to consumers who do not want to spend hours lining up for the tickets. This is an entirely rational economic decision, and these business transactions should not be over-regulated by the government.

Surfeit of Sevens tickets on sale ‘no cause for concern’ at HKRU

Boys play rugby during the Hong Kong Sevens weekend at the Hong Kong Stadium, on April 8. With apparently less demand for tickets this year, the touts saw their profit margins cut even though they were still making money. Photo: Antony Dickson

Indeed, in many other places, ticket scalping is regarded as a regular business activity. In America, it had its origins in the Mafia’s control of entertainment performances. With time, ticket sales became a business operated by “bookies”, who outsourced the job to individual scalpers, with the aid of computer software. These bookies are now able to sell the tickets to legitimate ticket-selling companies.

It is now common for scalpers to buy up tickets of popular shows online. This benefits the organisers of concerts, operas and sports events, as the business risk is transferred to professional scalpers. As for consumers, they sometimes manage to buy cheaper tickets from the scalpers when there is a surplus of supply. The government should let the free market operate and keep its hands off.

Prices for tickets to composer Joe Hisaishi’s concerts in Hong Kong next month have risen to HK$27,000 each on the resale site Viagogo, while the original prices ranged between HK$480 and HK$1,080. Photo: Handout

Furthermore, all laws should be fair. If ticket scalping is illegal, then other forms of speculation – on property, stocks, smartphones and other hot products in the market – should also be regulated to the same standard. Otherwise, the government should not criminalise ticket scalping and impose the impractical “real name registration” system.

Warnings of hours-long lines at gigs if ticket buyers must give names

Among the proposed measures, the “real name registration” system is the most worrying. It is not practical, as people often give away tickets to their friends or family due to some last-minute engagement. Under a “real name registration” system, people will be required to reveal some personal data. Such large-scale public surveillance is not warranted in the name of cracking down on scalping.

It’s clear that ticket scalping is not a priority among the many long-standing social issues facing Hong Kong. Lam should not pander to populist demands. Doing so would only harm Hong Kong’s renowned free-market economy. Instead of stirring up more drama, the government should focus on patching up the deep-rooted divisions in society and resolving urgent livelihood problems.

Albert Cheng King-hon is a political commentator. [email protected]

This article appeared in the South China Morning Post print edition as: Ticket scalping should not be overly regulated

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