Scalpers Bought Tickets With CAPTCHA-Busting Botnet

alphadogg writes "Three California men have pleaded guilty to charges they built a network of CAPTCHA-solving computers that flooded online ticket vendors and snatched up the very best seats for Bruce Springsteen concerts, Broadway productions and even TV tapings of Dancing with the Stars. The men ran a company called Wiseguy Tickets, and for years they had an inside track on some of the best seats in the house at many events. They scored about 1.5 million tickets after hiring Bulgarian programmers to build 'a nationwide network of computers that impersonated individual visitors' on websites such as Ticketmaster, MLB.com and LiveNation, the US Department of Justice (DoJ) said Thursday in a press release. The network would 'flood vendors computers at the exact moment that event tickets went on sale,' the DoJ said. They had to create shell corporations, register hundreds of fake Internet domains (one was stupidcellphone.com) and sign up for thousands of bogus e-mail addresses to make the scam work."

Comments

Capitalism at work

[Anonymous Coward]

What is so wrong?

Re:Capitalism at work

[jhigh]

Agreed. From where I sit, you have a group of guys that figured out a way to get the tickets first. It's not like they hacked anyone's servers and got tickets that they shouldn't have had access to. They bought them just like everyone else. How is this any different than getting all of your friends and family to hop on Ticketmaster the second tickets become available to increase your chances? Trust me, I know lots of people who do or have done this.

I just don't get what the big deal is here.

Re:Capitalism at work

[icebike]

Wait...

The events already had a monopoly on tickets.
The monopoly is a pre-existing fact, a built in shortage.

The BOUGHT the tickets, lots of them. Not ALL the tickets.

Just how do you equate this with a monopoly?

Re:Capitalism at work

[ovirto]

Your assumption is that if this is based on capitalism, there must be nothing wrong with it. I'm not exactly sure that's a good assumption. Take the recent credit derivatives debacle that threw our economy into a tailspin. Hey, Goldman Sachs and others created a product, people were willing to buy a product at a certain price. There's a risk element just like there is with any other security. That's capitalism, what's wrong with that? i think history demonstrates that, while based on capitalism, how unhealthy this activity was to our economy. As far as tickets go, let's say these tickets were priced at value that both the promoter and the artist agreed would be fair compensation. Their goal being to make some money for the work they produce while at the same time, setting the price in a range that allows a broad base of fans to enjoy. Scalpers come in, buy up the majority of the tickets and resell them at double the value. Sure, that's capitalism. But that act may have effectively shut out a large fan base that can't afford that new price. What's wrong with that? Well, from a market perspective, nothing (perhaps). It's supply and demand. But from a societal perspective, it starts to put a bigger wedge between the haves and have-nots. Entertainment/Sports/etc. becomes a industry that can be enjoyed only if you have a certain amount of wealth. In the long run, that may not be beneficial to that industry as the fan base drops. Keep in mind that the industry itself had set a price in order to maintain/increase fan base. It was the act of a third party that may have priced out a potential consumers.

Re:Capitalism at work

[Anonymous Coward]

Capitalism: The new religion of the 21st and 22nd century. Like all religions, dare ye not question it! For God is in the numbers. Everything has a price - everything must go! Sell your soul for a buck, you won't need where we're going. The only rule is that money rules all. Dig in, pig out, eat not your fill but everything you can take. Fuck your neighbours, what's yours is yours and what's theirs should be yours too! For the free market is divine and it commands that the only true virtue is greed. So pile on, like rats atop a sinking ship, for he who can reach the highest will eventually touch the sun, and be made supreme!
Welcome to paradise, don't mind the mess.

Someone stop the planet, I want off.

Re:Capitalism at work

[DarkOx]

Goldman Sachs and others created a product, people were willing to buy a product at a certain price. There's a risk element just like there is with any other security. That's capitalism, what's wrong with that?

There is nothing wrong with that but those MBS and other derivatives were marketed as being less risky than lots of those guys knew they in fact were. There is nothing wrong with derivatives, the problem had to do with FRAUD up and down the line. People applying for loans gave fraudulent information to brokers, brokers fraudulently modified the applications farther or simply passed on the documents as vetted without doing it. Banks wrote the loans and then sold them to other banks fraudulently claiming their application processes were secure when they were knowingly doing nothing to verify what brokers will telling them. Those other banks lumped those loans into baskets of vary quality claiming that it was diversification and reduced risk. The trouble was because of all the FRAUD up and down the line many many more of the loans in those baskets of high quality mortgages were actually low quality. Knowing this they marketed the securities any way FRAUDULENTLY insisting they were safe. Then people bought insure on the investment which by this point many of these investors might not have know there were problems but many still did know and in those cases the FRAUDULENTLY characterized the risk the the insurer who went with it because they wanted to have the business to show their investors. The insurers probably knew what was going on as well but because of all the other FRAUD they were able to claim most of their exposure was only to high quality assets and push up their stock prices that way. Then because people had the insurance which was to affordable they used more leverage than they otherwise would buy more of the same FRAUD laden crap and repeated the process until it was unsustainable.

So the problem was not capitalism, but FRAUD and sadly none of the solutions actually involved prosecuting anyone from FRAUD.

Re:Capitalism at work

[MaskedSlacker]

It's not like they hacked anyone's servers and got tickets that they shouldn't have had access to.

It sounds like that's exactly what they did in order to build a botnet to purchase the tickets for them.

Re:Capitalism at work

[ovirto]

I don't disagree with your points on fraud. The point is that people often mistaken or excuse fraud in the name of capitalism. That same fraudulent argument applies to ticket scalping as well. Ticketmaster (or whomever) set rules in place regarding the sale of tickets. These people FRAUDULENTLY misrepresented themselves by FRAUDULENTLY identifying themselves as individual purchasers. Then they resell these tickets at a FRAUDULENT value that is well and above the MSRP. Just because the market may bear that price doesn't make it legal or ethical. Hence the quote from the article "These defendants made money by combining age-old fraud with new-age computer hacking," the DoJ said in its press release.

Re:Capitalism at work

[Ihmhi]

How is this any different than getting all of your friends and family to hop on Ticketmaster the second tickets become available to increase your chances?

1) Your family isn't doing it for profit.

2) You're not reselling the tickets at a markup, which is illegal.

3) You and your family hasn't paid up with the right politicians to get favorable protectionist laws written up for them.

Re:Capitalism at work

[icebike]

That is merely a civil matter. Why are there criminal charges involved here? After all, they did not defraud ticketmaster, they PAID for the tickets.

Re:Capitalism at work

[ovirto]

You're the only one who used the words "rights". I never stated such at thing. The argument is not around entitlements, but your selective quoting missed that. Let me fill in the missing piece of the entire quote: "In the long run, that may not be beneficial to that industry as the fan base drops. Keep in mind that the industry itself had set a price in order to maintain/increase fan base." The artists/producers who are more knowledgeable about what price will sustain a certain consumer market set a price. Artificially increasing this price may be a detriment to that industry itself since it may drive consumer demand down for that product -- and I don't mean for just that single concert; that's a very short sighted perspective on business. This is about maintaining an equilibrium in the supply/demand of the industry, not inherent rights.

Re:Capitalism at work

[Man Eating Duck]

Going through all that effort is a pretty clear demonstration they wanted the ticket more than other people who were not as highly motivated.

You obviously don't give a fuck about music. If you did, you'd be pretty pissed off by people who deprived you of a chance to see your favorite band live in order to make a quick buck. There is a reason why even the big ticket vendors put barriers in place to prevent this sort of behaviour.

If your idea of a free market is "burn all the competition's first aid kits if there is a hurricane, and sell your own at a premium", this is pretty much it. If you're a scalper: FUCK YOU

Re:Capitalism at work

[Man Eating Duck]

as long as the opportunity for profit exists, then there will be capitalists ready to take advantage of it. It doesn't really matter how strongly you make your anti-capitalist arguments, the reality of this will still be there.

What's happening here is something like this: You bring along enormous tankers, and you empty all the ground tanks in every gas station. Then you sell gas from your tankers at a premium right outside the gas station. You've provided nothing of value, but you create an artificial scarcity in order to skim money off of other's work. Additionally you deprive people of the possibility to see a band live at the price which the band and venue agreed would be reasonable. This is very much a scam, in fact it is illegal where I live (fortunately I don't live in the land of the free and the brave). Also, to all scalpers, let me give you a heartfelt FUCK YOU.

Re:Capitalism at work

[magarity]

Exactly. Going through all that effort is a pretty clear demonstration they wanted the ticket more than other people who were not as highly motivated.

If the true market value is higher than the face value, then I think the right of first sale should apply. I should be able to buy something for $X, and sell it for $2X if the market will support it.

They weren't interested in paying more than other players, they were interested in hijacking access.. The free market model of capitalism requires all players to have equal information and access. In the real world this rarely happens because a few players will have some small to medium advantage over another player but that's just because information and access can't be perfectly distributed at the same time to all players. These guys registering thousands of placeholder domains and shell companies were artificially creating an INSANELY HUGE advantage for themselves and did not even vaguely represent a free market capitalism operation.

Re:Capitalism at work

[Man Eating Duck]

Why? Why is what the market will support the moral arbiter?

Setting that aside, there's a reason tickets like those are priced lower than what the venue could get for them. It's to create shortage.

You're wrong. The band and venue wants primarily as much people they can get attending, secondarily as much money as they can get (I work closely with people in the business). The scum from the article is skimming off the good work of the artist and the fans, this is in fact illegal where I live. Their goal is to create an artificial scarcity of tickets and sell theirs at a premium, thus fucking over the fans of the band. It has nothing to do with a free market. If you're a ticket scalper: FUCK YOU!

Re:Capitalism at work

[Firehed]

And yet people still pay the higher price. Scalping nets out to be third-party market optimization, even if the whole process is illegal or at best unethical.

Fair? Of course not. But nobody forced you to open your wallet either - seeing a concert or a game isn't a life or death situation. If this happened with something life-sustaining, then real problems arise.

Why is this a "scam"?

[Anonymous Coward]

It's no different than what guys like George Soros do...

Re:Why is this a "scam"?

[rs1n]

It's no different than what guys like George Soros do...

How is this any different than Ticketmaster scooping up all the good seats and auctioning them off on their own?

The difference would be that these guys are using a botnet and cause what is in essence a denial of service attack. Ticketmaster, on the other hand, probably has a deal with the vendors; these guys do not.

Hrm

[Alarindris]

I'll never understand why "scalping" is illegal in the first place.

Nothing they did seems unethical or immoral to me.

If people are willing to pay more for a ticket, good for them.

Re:Hrm

[rotide]

The problem is, what stops you, as a scalper, from buying out every ticket you possibly can through whatever means necessary, and then jack the prices up? I have no problem with a guy buying 2 tickets and selling them if he can't go. The problem comes up when someone buys them all merely to resell them at a profit. It's the same idea behind the limits on purchases of heavily discounted items like TV's, etc. You can't just go in and buy them all just to turn around and sell them at a profit. With limited quantities (tickets, discounted items, etc) you have to put limits/rules in place or the only people buying them are those that want to profit off it.

Re:Hrm

[Alarindris]

The problem is, what stops you, as a scalper, from buying out every ticket you possibly can through whatever means necessary, and then jack the prices up?

A. Less people buy the tickets and you make less money.
B. Far less people buy the tickets and you lose money.

Re:Hrm

[DarkOx]

With limited quantities (tickets, discounted items, etc) you have to put limits/rules in place or the only people buying them are those that want to profit off it.

No you don't need to put limits. Ticket scalping happens because the market is demonstrating that tickets are under priced. If someone buys all the tickets up as you say and than tries to sell them there is a maximum price at which he can expect to move the units. This is the price people are willing to pay to see the show. Lets say I purchase all the $15 dollar tickets to see my favorite band. They are not harmed, they sold their entire inventory of tickets at a price they were willing to offer the service of performing for; I might be able to sell those tickets at $20 each and make a tidy profit. If I try and sell them a $80 each most of them probably won't sell and I will lose my shirt because the self life of the inventory is right up until the show starts and after that its all worthless.

Now if they want to stop ticket scalping the band should simply charge more. If they raise the price to the maximum they can expect to move all the inventory at lets say its $20, than I while I can still buy them all I wont because I can't even resell them all for $21.

Really hot shows just need to up their prices. The performers would make more money and the ticket vendor sites would not get DDOSed, with 1000s of requests in the first moments of sale.

Re:Hrm

[pjt33]

They are not harmed, they sold their entire inventory of tickets at a price they were willing to offer the service of performing for

The second part of this sentence doesn't imply the first. To throw out a hypothesis, it might be that the tickets were deliberately priced below what the market would bear because the aim was not solely to turn a profit on the concert but also to attract lots of impressionable teenagers who might then become life-long fans and spend more on the band over their lifetime than the yuppie who is prepared to pay more for the ticket.

(Actually the biggest example which comes to mind of deliberate underpricing is the BBC Promenade series, and in particular the Last Night. If there were an open market in Last Night of the Proms tickets they'd probably sell for 100 GBP or more, but by making some tickets available to people who queue in person on the day they are able to achieve the aim of making it an event which pretty much anyone near enough London can attend).

Re:Hrm

[Phroggy]

Ticket scalping happens because the market is demonstrating that tickets are under priced. If someone buys all the tickets up as you say and than tries to sell them there is a maximum price at which he can expect to move the units. This is the price people are willing to pay to see the show. Lets say I purchase all the $15 dollar tickets to see my favorite band. They are not harmed, they sold their entire inventory of tickets at a price they were willing to offer the service of performing for;

Unless, of course, there is an intangible benefit to the band of having people in the audience that cannot afford to pay more than $15 per ticket, but can afford to spend the time it takes to purchase them the moment they go on sale (after closely following the band's announcements to find out exactly when that will be).

Re:Hrm

[moz25]

Whoa, that's brilliant! How about you call up the record industry executives to suggest they do just this! Obviously, none of them has ever thought "DUH, how about if WE jack up the prices?!?!?".

Or it might just be that you're not looking at the whole picture and the only value of your analysis is that it demonstrates how a generally valid theory leads to woefully wrong conclusions if boundary conditions aren't taken into account.

Re:Hrm

[sjames]

The bands realize that if they price concerts out of the reach of all but a small percentage of their fans, they may eventually have no fans.

In addition, a band gets a lot of cred when the concert is sold out. It feeds the hype machine. If the tickets are instead priced at the optimal economic point, the concert will not sell out. The word on the street is then that the band over-estimated itself, especially if they do more than one night and both nights fail to sell out.

Some concerts are sold at lower prices out of a sense of gratitude to the fanbase. It's really ugly when a greedy bastard then snaps them all up and sells them for a huge markup.

Re:Hrm

[meta-monkey]

Exactly. Not only that, but unless the show sells out anyway, even at the inflated scalper prices, the band and the venue miss out on merchandising and refreshment sales.

Finally, there's just the matter of not wanting to deal with profiteering jerks. My neighborhood held a community garage sale this morning. I hadn't done any spring cleaning in like 5 years so I had a ton of stuff to put out, bright and early when the event started at 8AM. At 7AM I've got ebay treasure hunters driving by screaming at me "got laptops?!? got jewelry!?!" People who just scout garage sales looking for underpriced stuff they can ebay. I didn't want to sell anything to those assholes. If I had something cheap, I wanted it to go to the poor as crap people who wandered in at 10am because they actually needed hand-me-down clothes and toys for their kids.

Re:Hrm

[Anonymous Coward]

> At 7AM I've got ebay treasure hunters driving by screaming at me "got laptops?!? got jewelry!?!"
> I wanted it to go to the poor as crap people who wandered in at 10am because they actually needed hand-me-down clothes and toys for their kids.

wandering in late might help explain why they are poor.

Re:Hrm

[Joce640k]

You mean (eg.) by actually being fans, knowing the music and cheering when you play the opening chord?

Scalping take the tickets out of their hands and puts them in the hands of the idle rich who only go because they've got nothing better to do or are trying to impress somebody else who doesn't really want to be there either.

The band should be the setting setting the prices and getting the profits, not some scumbags. They're the ones doing the work...

very best seats for Bruce Springsteen concerts

[countertrolling]

That would be at my local bar listening to.. uh I dunno.. Dire Straits on the jukebox..

Wow, there's a big difference there...

[damn_registrars]

Bush administration: Defends corporate interests and their "right" to lock down on a market for maximum profit at the expense of the consumer.

Obama administration: Defends corporate interests and their "right" to lock down on a market for maximum profit at the expense of the consumer.

Holy shit, that is a profound change. I understand know why the people on the extreme right are up in arms over all this socialism.

Re:Wow, there's a big difference there...

[Anonymous Coward]

Clearly you do not understand sarcasm. How pathetic of you.

Re:So?

[MrQuacker]

It doesnt matter *how* they do it, the end result is the same. The artist wants $10/seat, but a fan ends up paying $50/seat because they have to go through a third party. Ticketmaster is just as bad as any scalper. This time they just got pissed because someone else beat them to it.

Re:Its not rocket science people..

[xboxilve]

So if you sign up for gmail and say that you are from Beverly Hills 90210 and your name is Darth Vader then you should be convicted and go to jail for committing fraud against Google because you are using an assumed name?

"In order to access certain Services, you may be required to provide information about yourself (such as identification or contact details) as part of the registration process for the Service, or as part of your continued use of the Services. You agree that any registration information you give to Google will always be accurate, correct and up to date."

The concert experience has pretty much been ruined

[mrsnak]

...by all the "legal" scalpers that control the market, Ticketmaster, Live Nation, etc. Great acts in small clubs where you can pay directly are where it's at.

Re:High Frequency Trading

[Anonymous Coward]

High frequency trading just fixes the inefficiencies that used to take days to equilibriate.

...and panics, etc., that used to take a few days to manifest themselves fully can now do so in a matter of minutes, or perhaps even just seconds -- well ahead of any possible intervention by human regulators.

I can't help but think of a car analogy: If everyone's driving at 600 MPH instead of 60, you have 1/10 as much time to react to that drunk driver who just popped up over the top of the next rise, going the wrong way on a one-way road, and who is now rushing to meet you head-on.

Oh yeah... that's more efficient, all right.

Re:Buzzwords cloud the issue

[Solandri]

The people who bought the tickets represented a fictitious identity while entering into a contract. This is a crime of fraud

What I don't understand is that the ticket vendors seem to be so concerned that the ticket purchaser is a real person who won't resell the ticket. But that's a problem that has already been solved by the airline industry. Security requirements dictate that airline tickets be non-transferrable - they're assigned to a specific individual at the time of purchase. You buy your airline tickets, and when you get to the airport you have to prove you're the person whose name is on the ticket. A driver's license or passport is the most common ID, but you can use the credit card used to buy the ticket as well.

If the ticket vendors really want to stop scalping, why don't they just attach a name to it at the time of sale? Then when a ticket holder tries to enter the venue, they can just cross-check the name associated with the ticket in the database with the ID proffered by the ticket holder. If you wish to buy a ticket as a gift, just make sure you use the recipient's name on the ticket. For people who suddenly can't attend the event, they can implement a buy-back system which credits the original purchaser with (say) 50% the ticket price. They can then sell that ticket to people waiting in a "standby" line the day of the event.