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Why federal law hasn’t stopped online ticket scalpers from cheating

In 2016, the federal government made it illegal for scalpers to use ticket bots. But not much has changed.

Sold out. Music fans trying to score tickets to concerts online are seeing those dreaded words more and more. But even worse is seeing those tickets marked up to three times the price on resale websites.

Frustrated fans can blame scalpers who use ticket bots - sophisticated computer programs that buy up hundreds of tickets seconds after they go on sale. And despite a new law that makes bots illegal, not much has changed.

Just last month, two music lovers hoped to get tickets to see their favorite bands.

Farrah Asgari-Majd got in line at 4:30 a.m. on a Saturday morning. Even though she was cold and soaked by rain, the thought of seeing one of her favorite bands, Nine Inch Nails, kept her smiling. After waiting for nearly six hours, she finally had tickets to great seats.

“I’ve got gold. Like literal gold,” she said.

A week earlier, another fan tried to get tickets to a different concert. Valerya Calleros Tagle jumped online minutes before 10 a.m. on a Friday. But by 10:01 a.m., all the tickets were gone.

Only one ended up with tickets, and bots are to blame.

It seems old school, but when fans stand in line, they only compete with other fans who show up. But online, it’s more complicated. Eager concert-goers not only have to beat other fans, but they also have to beat the bots.

Professional scalpers use bots to buy tons of tickets as soon as they go on sale. Many tickets then become available at marked-up prices on resale websites like StubHub. Fans either end up empty-handed or hand over more cash.

Using ticket bots is a lucrative business. One scalper purchased 30,000 tickets to Broadway hit “Hamilton” over 20 months in 2015 and 2016. The same scalping business bought 1,012 tickets to a U2 concert in New York City less than a minute after they went on sale in 2014. Those tickets were sold at markups averaging 49 percent. In another attack, one bot got 520 tickets within three minutes to an August 2013 Beyoncé concert.

Even worse? They’re not even legal. In December 2016, the federal government passed Better Online Ticket Sales Act, or the BOTS Act, which made it illegal for scalpers use computer software to purchase more tickets than allowed or bypass security measures.

But the Federal Trade Commission, the government agency tasked with enforcing the BOTS law, said it could not comment on whether any legal actions have been taken in the past year against scalpers using bots. “The FTC is taking the issue seriously,” it said in an emailed statement. “We are taking a hard look at the situation.”

So even with the new law, not much has changed. In 2017, Ticketmaster, the country’s largest ticketing company, blocked 5 billion bot attempts.

The government isn’t doing much. But some in the music industry are trying to stop bots.

Different players in the entertainment industry, from performers to ticketing websites, are taking matters into their own hands. They are developing new technologies to prevent bot use, filing lawsuits against scalpers, and even returning to the old-fashioned method of standing in line.

Nine Inch Nails is one of the bands skipping the online ticketing market all together. “The promise of a world made better by computers and online connectivity has failed us in many ways, particularly when it comes to ticketing,” said the band, led by Trent Reznor, on its website.

Because the tickets wouldn’t be for sale online, fans congregated at box offices around the country in May. After waiting for hours, like Asgari-Majd, they were able to purchase four tickets to the band’s 2018 tour. Some said they liked the idea of picking up tickets in person because it made things more difficult for scalpers and provided a chance to meet fellow fans.

But others weren’t so thrilled.

“We would rather buy them online,” said Megan Oliver. “We have better things to do, like sleeping, in the wee hours of the morning.”

Most tickets, however, are sold online. Ticketmaster reported that 93 percent of its tickets were sold online in 2017.

Ticketmaster and other primary sellers develop new technologies every year (they’re even experimenting with facial recognition), but scalpers always seem to find ways around. Scalpers use multiple names, addresses, credit cards and IP addresses to get tickets, according to the FTC.

Some ticket sellers and artists insist on using non-transferrable tickets in which the name on the ticket has to match the ID presented at the venue. Others advocated for price caps on resold tickets. But neither have been widely implemented.

Ticketmaster sued Prestige Entertainment after determining the scalping company made 313,528 ticket orders using bots between January 2015 and September 2016. In May, a district court denied Prestige’s motion to dismiss the case, saying that the company violated several laws.

In a statement, Ticketmaster said that the case demonstrates why more needs to be done to hold scalpers accountable. “This case is an example of why stronger laws banning the use of BOTS and greater enforcement of existing laws, like the Federal BOTS Act, are needed,” the statement said.

Reselling sites provide a marketplace for law-breaking scalpers to make money.

Resellers play a big role in the bots problem; without a space for reselling to occur, scalpers would have no place to sell their tickets. The BOTS Act acknowledges some responsibility falls on resellers – it says they can’t knowingly sell tickets purchased using bots.

But the BOTS Act simply isn’t being enforced. Ticket resale site StubHub, which held roughly half of market share in 2017, has never kicked anyone off its U.S. site for using bots. Aimee Campbell, StubHub’s global head of public affairs, said the problem comes down to reporting. The primary ticket sellers, like Ticketmaster, have to alert law enforcement when there has been a bot attack, she said.

“Unfortunately if we don’t have concrete proof or evidence from a relevant law enforcement authority, our hands are a little bit tied because we aren’t going to kick somebody off without proof of something that they’ve done,” said Campbell in an interview.

But to fans, it seems pretty clear that tickets scalped using bots are being resold on StubHub.

“When I saw that [the tickets] were on resale sites five seconds after they went and they were already three times the price, I thought it was because of the ticket bots,” said Calleros Tagle.

StubHub said there is currently no way for customers to report a bot attack to them. The FTC encourages fans to file a complaint at ftc.gov/complaint or call 1-877-FTC-HELP.

There are many problems with the ticketing industry, and bots are just one of the big ones. Much of it happens outside of your control, but other than submitting a FTC complaint, here are a few things you can try to improve your chances of scoring a ticket:

  • Artists will often put tickets on sale before the general sale if you use a special code. Check for these presale promotions offered to fan clubs, loyalty program members or through your credit card company.
  • Sign up for newsletters and alerts from ticket sellers, artists or venues.
  • Follow artists and venues on social media so you know when tickets become available.
  • Set up an online account with the ticket seller ahead of time. Get familiar with navigating their website.
  • Call your lawmaker to express the importance of enforcing the BOTS Act.