Ticket Scalping

Abstract

The scalping of tickets for major sporting events is controlled throughout much of the United States. Recently, in response to perceived public backlash against the scalping of tickets for the AFL Grand Final, Victoria introduced its own legislation, the Sports Event Ticketing (Fair Access) Act 2002. This legislation seeks to control the secondary market in the selling of tickets as well as controlling this activity in the physical vicinity of venues. From a consumer perspective, the issue is fundamental: does the anti-scalping legislation allow consumers to pocket the economic surplus from the under pricing (deliberate or otherwise) of tickets and, through this, paternalistically protect the consumer from the alleged price-gouging that can occur in the secondary market; or does it operate to harm consumers by inefficiently allocating a scarce resource? This article explores the economic arguments for and against scalping, as well as identifying what the author submits are the relevant principles behind consumer protection in anti-scalping legislation. Practical solutions will also be offered as a way of reaching a compromise between the economics of allowing a scarce resource to be allocated to the person prepared to pay the most, as against the inherent backlash by the traditional fan towards perceived extortionate prices charged in the secondary market.