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

[Anonymous Coward]

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.

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

[countertrolling]

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

You're stepping on Ticketmaster's turf...

Re:Capitalism at work

[fishbowl]

It's like they broke into the lab where the secret recipes for ice cream flavors are kept, and they stole Vanilla.

Re:Capitalism at work

[gilbert644]

If it's illegal to DoS attack web resources why shouldn't it be illegal to DoS attack tickets? Just because the attackers resell the resource they hogged at expectorate prices its suddenly OK?

Re:Capitalism at work

[icebike]

They didn't even get them first.

They just got a lot of them early in the period of public availability.

Captcha solving is not against the law.

Their problem was the other stunts they pulled. But it wouldn't be much of a slash dot story if we couldn't tie in some technical method.

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

[MaskedSlacker]

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. Raising the prices would eliminate the shortage, sure. That's not what the venue, or the bands, want though. They want people fighting to get their hands on the ticket. By pricing the tickets lower they increase the number who will want to go to that show--and if they can't, then the next one (or the next one). Pricing tickets as high as the market will support is NOT always the best strategy, regardless of your dogma.

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

[Actually, I do RTFA]

Clearly, since the tickets weren't being auctioned off, the primary seller is attempting to remove market pressures. If someone wants to give something away (such as selling tickets below market value), their ability to limit their gifts to one/person is paramount to that transaction being able to take place. Since the permissibility of scalping causes desired transactions not to be able to performed, we have to choose which type of transaction is allowed.

Re:Capitalism at work

[OrangeTide]

the price of tickets is below the demand driven price. this is why scalping exists. make it illegal and you create black market capitalism. 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.

Re:Capitalism at work

[__aatirs3925]

I thought online scalping was legal because I often see concert tickets on ebay. So I'm very confused.

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

[DarkOx]

I agree, if TM they falsified there identities with TM than they broke the rules.

Re:Capitalism at work

[Proudrooster]

I think because they did the hacking using a Bot-Net instead of computers under their own control.

Re:Capitalism at work

[ovirto]

Rules exist even within capitalism. This is a case of fraud, not capitalism. Capitalism is just the veil that they choose to hide under. It doesn't matter how strongly you assert your pro-criminal arguments, the reality of this will still be there.

Re:Capitalism at work

[Pinky's Brain]

The ticket is sold with an EULA ... breaking a contract for monetary gain is no more "black market capitalism" than robbing a convenience store.

The price of not getting shot is also below the demand driven price.

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

[ZipK]

Using automated means to retrieve CAPTCHAs is in violation of the terms of service to which you agree when you use these ticket sellers' websites. For example, Ticketmaster's terms prohibit the use of automatic processes to retrieve CAPTCHAs.

Re:Capitalism at work

[shentino]

They're probably going to be nailed for hacking as a part of building their botnet in the first place.

Scalping might not be illegal, but electronic trespass sure is.

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

[xboxilve]

This is wrong, I have not found any evidence that they hacked computers or used browser exploits to infect PCs or anything of that nature. Everything I have found says that they used computer servers rented at datacenters and then networked them together sort of like any other internet business does. When a media story talks about someone "hacking" a bank the slashdot crowd gets upset because the media is portraying a term that to them is supposed to mean clever programming tricks, linux, tinkering, etc. When its the other way around and the media is describing a datacenter as a botnet, which is technically true, the crowd goes with it and assumes that something evil is going on.

Re:Capitalism at work

[superdave80]

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.

Now ENTERTAINMENT is some sort of inherent right? Dang, the entitlement mentality in this country knows no bounds.

It was the act of a third party that may have priced out a potential consumers.

Um, it they are selling them for 2X the price, then people are still showing up for the concerts. If the scalper price is too high, they will go out of business.

Re:Capitalism at work

[jhigh]

My point exactly. Scalping is illegal, but there is no mention of a scalping charge (or whatever the legal terminology is) in the article. Rather, they are being charged with "hacking" and "wire fraud charges."

Automating the purchase of tickets so that you're able to purchase them faster than other people is now illegal hacking and will get one charged with wire fraud? Ludicrous...

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

[ovirto]

"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?" But that's not what they did. If you want to take technology out of it, here's a more accurate example of what they did. Let's say a person stood at the front of the line and through a combination of phony IDs, cleverly disguising his voice, and Mission Impossible-like face masks, he fooled the ticket clerk into believing that he was actually several hundred/thousand different people in order to circumvent the policy of maximum tickets per individual. How do you see the big deal?

Re:Capitalism at work

[girlintraining]

Because those families lack the sophistication and resources to leverage several thousand servers across 6 continents to buy not a couple, but many thousands, of tickets, and then resell them at significantly higher rates. Your family is not responsible for causing an artists attempt to make his/her concert accessible to people who could not afford to attend at market rates fail miserably. All those friends and family, in short, were not so greedy they caused a substantial shift in cost and availability in a large market that affected tens of thousands.

These guys, however, were.

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

[Improv]

Answer is simple: Capitalism at work is so wrong.

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]

+1 insightful if I were not just out of mod points. Brilliant!

Re:Capitalism at work

[cheekyjohnson]

Oh, and artificial scarcity is good because it provides "incentive," and the fact that artificial scarcity needs to be promoted for certain goods which would otherwise be in an unlimited quantity in order to sustain our capitalistic ways is not at all a flaw in capitalism!

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

[Man Eating Duck]

Perhaps another method would be to contact and reserve the tickets w/o paying, but required to be there in person or at least present a valid ID at the event to pick-up or simply gain entrance to the events.

I would like tickets to be personal, like they are on airlines. That would eliminate the scalpers. It would also eliminate the possibility for a group to sell surplus tickets at the entrance, but that's a small price to pay. At the latest concert I went to I got a ticket slightly cheaper than value from a guy outside, because a friend of his couldn't make it. I'd gladly relinquish that if it meant that the scalpers would be eliminated. To scalpers: FUCK YOU!

Re:Capitalism at work

[pspahn]

The price is based on fraudulent pretenses. If a show is sold out because of scalpers fraudulently acquiring tickets, the only realistic option a fan has to see the show is to pay a price that has been inflated because of that fraudulent activity.

This isn't simply a matter of price speculation, it's market manipulation done in bad faith.

Re:Capitalism at work

[pspahn]

While I mostly agree, scalpers do in fact at least provide a service to the fans. There are times when a fan wants to go to a show bad enough that they will pay a hefty price. If the show is sold out, the fan's only option is to go scalpers. It's not like they can go to the venue or band themselves and say they are willing to pay 4x the cost for a ticket when no tickets remain.

I'm not saying scalpers aren't generally malevolent to others, because they are, but there are times when they come in handy.

Re:Capitalism at work

[Firehed]

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.

Is that necessarily a bad thing? Entertainment is a privilege, not a right. And while scalping may change the demographic of the event, it's unlikely to hugely affect the size of the fanbase (if anything, I think it would increase, as sold-events could cause a "I'm really missing out, I really have to find a way to afford the next game" reaction driving more, not less, devotion). Scalpers will adapt their pricing to what the market will bear, since any unsold tickets are an active loss to them - unlike for the original seller where it's more along the lines of opportunity cost.

Being cautiously optimistic, I see more expensive entertainment as a possible source of motivation for people to get better jobs and work harder so that they can afford to participate. Is that the reality of the situation? Probably not - I expect that it would just generate more "damned rich people" attitude, seeing that a large number of people with crappy, low-paying careers tend not to be the sharpest tools in the shed. And if I take that more pessimistic (and accurate) attitude, well, I wouldn't consider it a bad thing if we didn't hear about rioting after finally winning the world series. FFS, if you're going to riot, at least do it after your team loses, not after it wins.

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.

Re:Capitalism at work

[Firehed]

I should note that I don't in any way support scalping - I'm just trying to look at the situation with a bit more objectivity.

Re:Capitalism at work

[cvtan]

I was going to write something about how annoying it is to have all the good tickets to a concert vanish 5 minutes after they go on sale only to have them appear on Stub-Hub etc. at triple the price, but I see it's pointless. I would have to say something about how this isn't FAIR, but no one is going to care about that any more. This is just business, after all! Suppose I came and bought all the gasoline in your neighborhood and then re-sold it for $10/gal. You could always drive to another state to buy gas if you don't like it. The problem is there are a small number of people who can get rich by gaming the system instead of getting a real job. The slimes! If Blue Man Group wants to charge $75 a ticket, then OK, but why should a third party make another $200 on top of that for doing NOTHING.

Re:Capitalism at work

[Firehed]

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

Uh, no. This would be buying all of the first aid kits available and selling them at a premium. When making that kind of analogy, you're only allowed to change the noun, not the verb.

That said, I share your sentiment.

Re:Capitalism at work

[toQDuj]

The scalpers are creating an artificial scarcity to push up the price of the tickets. That is what is wrong.

Re:Capitalism at work

[causality]

Rules exist even within capitalism. This is a case of fraud, not capitalism. Capitalism is just the veil that they choose to hide under.

It's hardly the only veil. Consider this conundrum: that three men conspired to create/use various organizations to accomplish the goal of scalping for monetary profit is not absurd to most people. They don't reject the notion out-of-hand and refuse to consider the merits of the position. Yet, the suggestion that more than three men conspire to use governmental power for the goal of both power and monetary profit is automatically written off as "can't possibly happen, especially not here". If anything the greater power of more than three men and a bigger, more powerful organization makes this more tempting to evil people, and therefore more likely that enough would be motivated to do so.

Really any philosophy that has its share of "true believer" followers has the same downside. They don't think critically and ideology is more important to them than a willingness to be proven wrong if the proof is adequate. That's a readily exploitable state. Capitalism, Communism, Statism, and various religions have all, at one time or another, been exploited for control.

Re:Capitalism at work

[tqk]

Love your .sig

Re:Capitalism at work

[Thinboy00]

Market manipulation is the opposite of capitalism.

Re:Capitalism at work

[damonlab]

"Automating the purchase of tickets so that you're able to purchase them faster than other people is now illegal hacking and will get one charged with wire fraud?"

Meanwhile, on wall street, automating the purchase of stocks and bonds so that you're able to purchase them faster than other people is totally legal.

Re:Capitalism at work

[fearlezz]

I think the real problem here is not that these scalpers buy the tickets, I think it's artificial scarcity.

If I had a big bag of money, and decided to buy every single CPU i could get my hands on (so everyone wanting to buy a computer has to pay me), you would see that manufacturers would be very happy and simply double the production. I'd be stuck with a lot of CPUs, and consumers would have no problem.

Now, for some reason, when tickets are sold out, artists don't use this method. If every time tickets were sold out, they immediately announced to extend the tour, there would not be a problem: both artists and promoter would have extra income, consumers can see the artist at normal prices, and the only ones that lose, are the scalpers.

Re:Capitalism at work

[JesseMcDonald]

No, if the show was really "sold out" then there would be no tickets available, from scalpers or official channels. The scalpers aren't going to use those tickets themselves, so they have to sell to someone before the show; ergo, scalping will not create a shortage. Any show which would sell out at the higher scalpers' price would sell out just as surely at the lower original price.

As for the service scalpers provide: If the price is kept artificially low, and scalping eliminated, then there will be people who were willing to give up more (pay a higher price) to attend, but couldn't because others who valued the show less highly already purchased the last tickets. Scalpers ensure tickets are allocated efficiently, i.e. to those with the greatest demand. This is normally considered a good thing, and if the official prices were set according to supply and demand in the first place then the scalpers would be out of a job.

If a band or venue really wants to hand out tickets by lottery rather than demand then they can always make the tickets non-transferable, e.g. by registering them to specific individuals at time of sale and refusing any without matching IDs.

Re:Capitalism at work

[JesseMcDonald]

It would also eliminate the possibility for a group to sell surplus tickets at the entrance, but that's a small price to pay.

The venue could assist with this by buying back surplus tickets so long as demand continues. You may not be able to simply hand you ticket over to someone else, but the venue can always cancel your ticket and create a new one tied to a different fan.

That said, tickets should go to those who most value the event. Scalping exists because the venue creates a ticket shortage by setting their official prices too low; scalpers are just fixing the problem by balancing supply and demand. If you don't like dealing with scalpers, convince the venues to set their prices properly in the first place. Reasonable prices —> no shortages —> no opportunity for scalping.

Re:Capitalism at work

[makomk]

If I had a big bag of money, and decided to buy every single CPU i could get my hands on (so everyone wanting to buy a computer has to pay me), you would see that manufacturers would be very happy and simply double the production.

No they wouldn't. The manufacturers have a limited and carefully-judged manufacturing capacity - expanding it costs several billion dollars per new production facility and takes a couple of years.

If every time tickets were sold out, they immediately announced to extend the tour, there would not be a problem

It would be a problem: it'd mean having to find new venues, cancel whatever they planned to do after the tour was over, etc. It'd only really be practical if a lot of suitable venues were lying empty, which is very inefficient.

Re:Capitalism at work

[makomk]

Yet, the suggestion that more than three men conspire to use governmental power for the goal of both power and monetary profit is

...assumed to be a possibility, which is why our political system is supposed to be designed to prevent it.

Re:Capitalism at work

[Zontar The Mindless]

Scalpers ensure tickets are allocated efficiently, i.e. to those with the greatest demand.

You're confusing "demand" (the desire for a thing) with "resources" (the ability to pay for it).

Re:Capitalism at work

[drinkypoo]

The price is based on fraudulent pretenses. If a show is sold out because of scalpers fraudulently acquiring tickets,

What's fraudulent about buying low and selling high?

This isn't simply a matter of price speculation, it's market manipulation done in bad faith.

If the market wasn't willing to pay so much for those tickets then nobody would be buying them. Clearly it is willing to do so. They're only upset because they're not getting a piece of those revenues. The solution is to sell those tickets to professional scalpers at an inflated price so they get more of the profit, not to try to place artificial limitations on the market to attempt to force people to purchase them in the way they prefer.

Re:Capitalism at work

[asdf7890]

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).

Even if scalping is in itself not illegal in a particular territory, you'd be hard pressed to find somewhere that what these people did is in any way legal. They setup false companies and false personal identities for financial gain - this organised fraud, plain and simple.

Re:Capitalism at work

[asdf7890]

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

They setup false companies and false personal identities for financial gain - this organised fraud, plain and simple, in most territories.

Also systems like this can create an denial of service effect on the target sites. This is considered vandalism or worse in many statutes.

Re:Capitalism at work

[T Murphy]

You are right these guys fraudulently purchased the tickets from TM, but the people buying the tickets at the higher price knew exactly what they were getting, and probably knew they were buying from scalpers. Once these guys made it past TM, this was capitalism at work- finding the price the market will bear is kind of the idea. Unless these guys misrepresented their tickets, I don't think you have a very good argument.

Re:Capitalism at work

[MorpheousMarty]

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.

Fraud combined with the adjustable rate mortgages created the economic crisis. The fraud was the spark, and those loans were the gasoline. He's what we must learn from this crisis and never repeat (if I may be so bold):

Do not create loans which become more expensive when people start defaulting on their loans.

You create the potential for disaster because higher interest rates will cause defaults, and defaults will cause higher rates. That was the mechanism of the crisis. Fraud caused defaults (I mean if everyone paid their loans it wouldn't have mattered that they lied), which raised interest rates on existing loans. These loans were created for people who could not pay regular interest rates, so any increase was likely to be too high. Investors being aware of the death spin this would cause of this pull all their money out of the system, pushing rates even higher.

In this case it was fraud, but any reasonably sized hit to the economy would have caused the same thing. So long as we continue to use these types of loans, every time things a little wrong, they will go very wrong.

Re:Capitalism at work

[BlackBloq]

It's clear that capitalism protects from the negative effects of monopoly. It's like if someone in your town bought up ALL the beer in the city never mind how, then doubled the price and sold it. There are books and books and books about why this is bad and not capitalism but monopolism.

Re:Capitalism at work

[Kaz Kylheku]

Even if that's the case, then the crime is cracking the machines, not selling tickets.

A set of related actions can be decomposed into non-criminal and criminal.

If a villain scratches his ass during a robbery, that doesn't mean ass scratching is a crime, even if it was necessary so that he could rob more comfortably.

Re:Capitalism at work

[T Murphy]

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

I knew Ticketmaster was illegal!

Re:Capitalism at work

[TaoPhoenix]

I submit that they were, but you are falling into the "speed of business trap". It's Henry Ford and the Buggy Makers again.

Let's presume for a minute they did this without the easily-scoffed-at layers of illegal shells.

They produce a software package called "Ticket Sniper". This software sits there and monitors events, and buys tickets at nano-speed. Then they resell them. Hooray! The first year they do this, they get their early mover profits for their R&D work.

Then the FOSS gang makes the open source version "Ticket Assassin" that uses a different algorithm to avoid legal trouble, and soon "everyone has it". Then when their "Buy the next Gary Brolsma Concert Ticket" rule triggers, they get their seat at the "regular price".

Then a gamer figures out a low ping matters, so they leverage the cloud backbone to power-buy the tickets, then resell them at really low prices. (No sarcasm, think Discount-Store-Tickets brand). Then people just buy "Ticket-Coupons" so at their leisure they can get their ticket.

Still just capitalism. But leveraging generations of innovation way faster than we like from "the good ol' days".

Re:Capitalism at work

[JesseMcDonald]

No, I'm not. Demand is defined in economics as the goods offered in exchange. That includes both desire and ability to pay. Efficient allocation is based on demand, not simply desire.

How well your ability to demand goods matches your desires depends, of course, on your own personal productivity. In the absence of forcible intervention, people tend to have the ability to demand approximately as much as they produce.

Re:Capitalism at work

[causality]

Yet, the suggestion that more than three men conspire to use governmental power for the goal of both power and monetary profit is

...assumed to be a possibility, which is why our political system is supposed to be designed to prevent it.

It seems to work about as well as all of those "hacker-proof" copy protection schemes. The ones that have cracks available a few days or weeks later.

You just can't rely on nothing but a system to take care of everything for you, not even when it's a well-designed system. If you try to do that, you'll breed a generation of crooks who are highly skilled at exploiting loopholes and circumventing that system. The system is an aid only. It just makes it easier to be vigilant but it won't do your vigilance for you.

Re:Capitalism at work

[magarity]

If the business of the concert venue was to sell tickets to third party ticket vendors then yes, this is a speed of business problem. However, the business of the concert venue is to sell tickets to concertgoers. Intercepting that sale creates an artificial arbitrage opportunity. Arbitrage is a byproduct of free market operations caused by imperfect dissemination of access and information. Therefore, ticket scalping, especially by such shenanigans, is NOT a free market capitalist operation.

Re:Capitalism at work

[toddestan]

It's fraudulent when you use a network of hacked computers to misrepresent who you are to get around restrictions on the purchases of the tickets.

Re:Capitalism at work

[toddestan]

A botnet is typically refers to a collection of computers being used in an unauthorized manner. If it's your own computers or computers you have permission to use, then it's just a cluster.

Re:Capitalism at work

[genkernel]

Indeed. Actually now I kinda want to translate this into iambic pentameter and give it a rhyming pattern.

Re:Capitalism at work

[makomk]

You just can't rely on nothing but a system to take care of everything for you, not even when it's a well-designed system. If you try to do that, you'll breed a generation of crooks who are highly skilled at exploiting loopholes and circumventing that system.

Doesn't matter if they can find loopholes - if the press get wind of anything sufficiently juicy, the fact that what they're up to technically falls within the rules isn't going to help the politicians. The biggest issue is if most of the press comes under the control of one person and he* inevitably decides to use this to influence politics. In theory, it's both within politicians' powers to stop this and in their interests to do so. In practice, it doesn't work out that way.

More interestingly, this kind of monopoly over the press is bad for the free market as well as for integrity in politics. In order for free market economics to work, the general public needs accurate access to information to guide their buying decisions. Once one person owns the press, they can - and often do - bias or pull stories in order to support businesses they own or make money from.

* So far, the one person has always been male.

Re:Capitalism at work

[OrangeTide]

I'm pretty sure fencing flat screen TVs is the very definition of black market capitalism.

Re:Capitalism at work

[OrangeTide]

I don't really need an analogy to understand that the behavior is unreasonable (why do slashdotters think analogies improve a thread?). And amounts to computer crimes / wire fraud in this particular case.

On the otherhand my point stands, provided an opportunity for profit even if illegal or unethical and you'll see enterprising people take advantage of it despite cries of protest about the evils of unchecked capitalism. Those soap box speeches are as ineffective as my own comments.

I don't offer solutions, I only point out that no one here does either.

Re:Capitalism at work

[causality]

You just can't rely on nothing but a system to take care of everything for you, not even when it's a well-designed system. If you try to do that, you'll breed a generation of crooks who are highly skilled at exploiting loopholes and circumventing that system.

Doesn't matter if they can find loopholes - if the press get wind of anything sufficiently juicy, the fact that what they're up to technically falls within the rules isn't going to help the politicians. The biggest issue is if most of the press comes under the control of one person and he* inevitably decides to use this to influence politics. In theory, it's both within politicians' powers to stop this and in their interests to do so. In practice, it doesn't work out that way.

More interestingly, this kind of monopoly over the press is bad for the free market as well as for integrity in politics. In order for free market economics to work, the general public needs accurate access to information to guide their buying decisions. Once one person owns the press, they can - and often do - bias or pull stories in order to support businesses they own or make money from.

* So far, the one person has always been male.

The way I see it, this is a problem because of the Baby Boomers and other politically powerful voters who tend to vote in collective blocs and also happen to get almost all of their news from newspapers and TV.

A generation is rising that gets almost all of its information from the Internet. That's a medium where you can usually call bullshit the moment you see bullshit. The propaganda isn't as effective there, and a monopoly is much harder to maintain there. I consider this a very good thing.

Also, if you haven't yet discovered this, I'll give you a strong hint: that "one person" of whom you speak is merely a puppet, a cog in a much larger machine. He may be a knight or a rook instead of a pawn, but he is still just a piece on the real masters' chessboard. He may have some autonomy but not on any really important point. He plays ball or he loses the support he needs to stay in business, same as any politician or media figure.

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

[Charliemopps]

When you're a musician and you see what amounts to nothing more than thugs ripping off your fans you might understand better. I'm all for piracy and the end to the sale of digital media simply for the fact that musicians will have to tour more and put on good shows to make their living. But nothing turns fans off more than finding out the shows sold out and having to buy tickets off thugs outside the venue.

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

[icebike]

If the event is under priced then I see nothing wrong with "buying out every ticket you possibly can through whatever means necessary, and then jack the prices up".

If the event is over priced or priced just at what the market thinks is fair, then the scalper gets creamed.

Nobody can afford to buy ALL the tickets, or even ALL the best tickets, and venues have the option of limiting purchases of large blocks of tickets to specific sized and delayed periods of availability to preserve an equal chance for individual buyers.

But realistically, the venue wants butts in seats and they don't care how they get there as long as they get their money.

Re:Hrm

[AnonymousClown]

I never pay scalpers - I don't care how much I like an act.

Thugs? When I go online to buy tickets from an automated system as opposed to going to a window and buying tickets from a person - that has to be paid - I'm charged a "convenience fee" and other assorted junk fees that make the airlines look like frick'n amateurs. Actually, I'm not charged because I don't click on accept.

Over the past couple of decades, I've watched ticket prices sky-rocket. A $25 ticket back in the 80s should go for $50 or so inflation adjusted? Nope. They go for well over a hundred. And many of these acts aren't what they used to be, I tell ya. And the new acts? Pffft. The last time I went to a live show, I was very disappointed.

Re:Hrm

[SheeEttin]

Nothing they did seems unethical or immoral to me.

Not even buying up all available tickets and reselling them at a markup? Inflating the prices to astronomical levels?
Capitalism at work. Legal? Sure should be, in a pure capitalist system, but ethical? Oh hell no.

Re:Hrm

[loshwomp]

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'll tell you what. It's called The Market.

If you buy too many tickets, you won't be able to sell them. You might not make money, and you might even lose money. If you you want to accept this transfer of risk, go ahead.

Re:Hrm

[phantomfive]

Your idea seems to be that ticket sellers should find the sweet-profit-spot between expensive tickets and sales. This will unfortunately mean that concerts will never be sold out. That really sucks for performers who would surely much rather perform to a full audience.

Ticketmaster probably doesn't care, though. I've long thought that Ticketmaster probably likes scalpers, because it shifts the risk of not selling out from them to the scalpers. If they wanted to stop it, they would do it by requiring one credit card number for every five tickets or something. The reason they went after these scalpers is because they saw an opportunity to make money using the legal system. Why not? It's a good business model.

Re:Hrm

[loshwomp]

But nothing turns fans off more than finding out the shows sold out and having to buy tickets off thugs outside the venue.

Since the only other option is buying them from the venue-approved thugs (ticketmaster or livenation), I'm not very sympathetic to your point.

Re:Hrm

[Anonymous Coward]

Problem is, the band wants all 100 seats in the venue to be filled. The scalpers don't give a shit if they sell all the tickets they bought, as long as they sell enough of them to profit. Buying all 100 tickets for $10 each and marking up the price to $100 each means they can sell 20 to the people who REALLY want to go (because the only way to get tickets is for $100, and everyone else who has any interest in the matter other than the money is screwed. The people who manage to get tickets are screwed because they're at a show that's at 1/5 capacity. The people who didn't go because of the wildly inflated price (that clearly the market bore) is out of their range. The band has a mediocre show at 1/5 capacity, which means 1/5 as many people going out and telling their friends how awesome it was and that they should buy the band's album and merch.

This is part of why they don't "just raise prices". There's more than one factor involved here. But don't let that get in the way of the typical Slashdot-style "I understand one component of the problem a little bit so I have the obvious solution" commentary.

My captcha: "raving". Of course.

Re:Hrm

[saleenS281]

But the band wants all of their fans to be able to afford tickets. Even if that means they're under-priced. Society has agreed it's not your place to dictate how much the band sells their tickets for.

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

[mrmeval]

Sucks to be you. What should happen is the ticket originator should jack their price up until the scalpers profit margins no longer make it worthwhile. There are several means to do this that don't require some jack booted thug to get involved.

Re:Hrm

[cdrguru]

Unfortunately, when I was in Chicago I never saw anything except tickets being available from "brokers" and people that somehow thought they needed to stand in line at 3:00 AM to try to get tickets. The brokers always had a service charge which would jump the face value of the ticket 2 or 3 times but you always knew you could get the tickets without standing in line at 3:00 AM.

I don't believe there is a practical way to get event tickets other than from broker these days. And these folks are just as bad as the folks outside the event trying to sell tickets in terms of cost except the brokers are legal and the folks outside the event aren't.

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

[Anonymous Coward]

Bands could charge monopoly rents but don't for other reasons. The reason that the ticket prices are artificially low is the promoters/bands want sell-outs. It generates a better experience for those who attend, a sense of urgency to buy tickets early for future events, and makes venue owners happy (more parking and concessions). Who would want to see a band if you knew that the previous gigs only filled 1/2 the available seats? The only way that promoters can maximize profits is by auctioning all the tickets but, even this process may scare away sales.

The best way I could see to maximize profits is to offer all the tickets at a single price but reduce the price a small amount each day until show day (or sell-out). If you really want the best seats, you buy on the first day at an outrageous price. If your only willing to spend 10 bucks, you may strike-out. This also discourages scalping since all the people willing to spend more than the scalpers have already purchased their tickets. The best the scalpers can do is sell to people who are willing to buy tickets at the same price that the scalpers paid (or to those who weren't really honest to themselves about their true reservation price).

Re:Hrm

[z4ce]

You must never buy tickets from reseller sites. If the scalpers over purchase (and they often do) you can buy the tickets REALLY cheap right before the game/show. If you wait to the last second, you can often find them for 1/5th the list price.

Re:Hrm

[deetoy]

exactly. It might be hard to appreciate the intangible benefit if you ignore the psychology that drives people to spend a large proportion of their disposable income, travel long distances and camp out early to get in a physical queue to buy tickets.

Nothing is more demeaning to a performer than playing to an unenthusiastic audience. Jack up the prices too much and the front row will be filled with suits who give no vibe to the performers.

Re:Hrm

[lul_wat]

I don't believe there is a practical way to get event tickets other than from broker these days.

There's this little thing I use.

You might have heard about it.

It's called the Internet.

Re:Hrm

[JoshuaZ]

So now we are having the government step in and tell people what they can and cannot buy based on a possible intangible benefit to the band?

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

[sjames]

Actually, the size of a purchase IS limited explicitly to prevent scalper buying up blocks. The whole crux of TFA is that these scalpers used a botnet to defeat the captcha specifically so they could bypass the maximum per-person restriction.

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

[NeutronCowboy]

No, we're having the government step in to prevent people from misrepresenting who they are. Scalpers in this case pretended to be individuals buying the tickets, but instead they bought them wholesale with the intention of cornering the market for desirable seats. free market can only exist if both the seller and the buyer have perfect information about the product and the people involved. Scalpers in this case changed that.

Re:Hrm

[noidentity]

The error is that the ticket vendors want to sell them at below-market prices, but not have resellers buy them. The problem is they want to use force against the resellers, even though the resellers are acquiring the tickets through voluntary exchange. This is an unjust use of force.

Re:Hrm

[carigis]

scalping is only illegal because the state gets no tax revenue on the additional income, where they do from the registered corporation that sells the seats. Usually corporate ticket scalpers are not considered scalpers because they are registered with the state and are considered brokers..as they are taxed.

Re:Hrm

[Glonoinha]

Just a thought - how about pricing tickets the same way Google priced their IPO?
Dutch auction. Basically you have a large number of (tickets, stock - whatever) and you put them up for public auction. For each set of identical items, say there are 50 seats that are roughly the same 'value' - the top 50 bidders get the tickets at whatever price the 50th bid was - so you can bid astronomically high to insure you get a seat, but the seat prices are actually priced so everybody pays the same (the lowest still winning bid.) As silly as it sounds, I think ebay would be the ideal solution for concert tickets - but not one at a time, entire blocks at a time where the entire world has weeks to bid on them, and the auction doesn't close until a day or two before the concert insuring anybody that would have bought from a scalper was able to simply pay the current bid price on a ticket.

The proceeds go to the band in the form of higher ticket prices, all the tickets still sell out and the venue still packs to capacity.

Re:Hrm

[Phroggy]

So now we are having the government step in and tell people what they can and cannot buy based on a possible intangible benefit to the band?

Having those $15 tickets available benefits society. Bands having passionate fans is good for society. Having cultural activities available to those who don't have a lot of money benefits society. The band wants to do this, but they can't enforce the rules by themselves.

Re:Hrm

[sjames]

They still price out much of their fanbase. It's a real hype killer when nobody gets excited about the band coming to town because they figure they'll get outbid anyway.

Re:Hrm

[evanism]

Business pays taxes even on these resales. If they were skipping on taxes their problems would be considerably worse.

Re:Hrm

[citizenr]

Problem is, the band wants all 100 seats in the venue to be filled.

So they want money AND free advertising? See, thats the problem right there.

Re:Hrm

[Ichijo]

Problem is, the band wants all 100 seats in the venue to be filled...This is part of why they don't "just raise prices".

Then sell all the tickets auction-style to allow the market to find the equilibrium price while eliminating the possibility for scalpers to make a profit.

Re:Hrm

[Ichijo]

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.

So, ticket prices are subsidized by merchandising and refreshment sales? Well there's your problem.

It's like when Sony and Microsoft crack down on the homebrew community because they depend too much on overpriced games to make a profit.

Re:Hrm

[Firehed]

Leeching? The original seller wanted to make a quick buck, so was willing to sell at less than market value in order to get a fast transaction. Your so-called leech invested his time to find a different buyer willing to pay a higher price.

If you're calling him a leech, I hope you don't have a 401k or any shares of a company you don't currently work for or otherwise do business with. Because buying a car and selling it for more is absolutely no different than the vast, vast majority of stock investments. You're providing someone with money now in exchange for getting more money later. Basically a multi-party loan.

Re:Hrm

[fishbowl]

>The article repeatedly uses the word "fraud" but does not explain how solving a CAPTCHA is fraudulent if they paid the
>asking price.

That's not the crime, it's just one means to the end. The crime was fraud, specifically, entering into a contract while falsifying the identity of the party. The consideration for the contract was delivered electronically, which made it wire fraud.

Re:Hrm

[fishbowl]

Scalping is illegal because it abridges the rights of the operator of the venue, who has given an exclusive license for ticket distribution. Read the fine print on your ticket sometime, and notice that the venue would be perfectly within their rights to void your ticket at any time and for any reason.

Re:Hrm

[cfulmer]

First of all, if you sell those 20 tickets, you now have 80 more that you can sell for pennies on the dollar at the last instant, increasing your profit. There's no scalper out there who plans to have a bunch of tickets left over just after the show starts -- that's like leaving money on the table. Secondly, the venues we're talking about don't have just 100 seats -- they have tens of thousands, and there's no way that a scalper is going to corner the market on all those seats. States without anti-scalping laws don't have the problems you describe.

Re:Hrm

[cfulmer]

No... They'd just drop the prices as it got closer to show time, like airlines and last-minute fares.

Re:Hrm

[dookiesan]

I have a litter of puppies and I want to sell them only for enough to cover my own costs. I want to give even the poor a chance to have a puppy. I want my puppies to go to the most appreciative homes. I would prefer that they weren't hoarded by Bulgarian programmers who resell my puppies at a higher price and then throw the unsold puppies in the dumpster.

Re:Hrm

[hydromike2]

your arguement only holds true for any event where the artist/host venue is not hoping to make the real profit on the alcohol, food, and souvenirs. The people who originally sell the tickets make money off of the greatest number of people entering their event, scalper sell tickets at an artificially inflated price, that not as many people are willing to pay, nd the original seller in the worse off for it for making the investment in the venue and performers in the first place.

Re:Hrm

[The Wild Norseman]

Problem is, the band wants all 100 seats in the venue to be filled...This is part of why they don't "just raise prices".

Then sell all the tickets auction-style to allow the market to find the equilibrium price while eliminating the possibility for scalpers to make a profit.

Are you talking about a second price auction?

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

[ultranova]

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

Nothing they did seems unethical or immoral to me.

Scalpers are parasites who monopolize a resource they had no part in making or excavating, then charge others for access to it. They are, in effect, charging a private tax for transactions between two other parties. They're like high-frequency traders in that regard.

Think of it this way: would you object if I bought all the food within hundred miles of your home, then offered to resell it for twice the price?

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

However, it's not good for the economy to reward parasitic behaviour.

Re:Hrm

[ultranova]

The obvious solution is to not sell tickets beforehand, but simply charge for entry.

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...

Re:Hrm

[ian_from_brisbane]

+5 insightful.

Re:Hrm

[drinkypoo]

In addition, a band gets a lot of cred when the concert is sold out.

and they get this cred whether the tickets are bought by fans or scalpers. try again

Re:Hrm

[atrizzah]

That's wrong on so many levels. Just because the market will bear a higher cost doesn't mean that a higher cost is a good thing. For instance, if bands and venues really thought that charging maximum money was the best policy for them, they would simply charge the highest price the market would bear in the first place. They could auction all of the seats. But they don't. Why? Because they aren't trying to simply maximize ticket revenue. They don't benefit maximally by only the wealthiest possible people being able to attend shows. They benefit by building fanbase and goodwill. The best fans aren't necessarily the wealthiest.

If you've tried to buy a ticket for a major event in the past several years, you have felt the burn caused by these assholes. I don't know how many events I have seen "sell out" within literally seconds of tickets being made available. It's gotten to the point where I, and many other people I know, simply have given up on trying to get popular tickets.

So, from a purely capitalist standpoint, you can applaud these scalpers for sucking the market dry, but they accomplish this by hurting the suppliers and the ultimate consumers. And what benefit do they provide? Widespread frustration is actually not a good thing for the industry in the long run.

The problem is that market forces often seek an equilibrium that makes sense in the immediate term and does not take into effect externalities. Economics doesn't state that free market dynamics lead to the best possible outcome. Rather, it says that in absence (or even the presence of) regulation, the market will tend to seek that outcome, whether positive or negative. Libertarians, as you seem to be, ignore this aspect and insist in believing in the pipedream that somehow the free market outcome is the most positive. This may be true in some cases, but without knowing the externalities, it is impossible say this is the case a priori.

It's sad that you blindly glorify brigands like these people. Of course they're brilliant. But what they are doing is harmful and wrong, and it should not be allowed.

Re:Hrm

[asdf7890]

Nothing they did seems unethical or immoral to me.

They setup false companies and false personal identities for financial gain - this organised fraud, plain and simple.

Also systems like this can create an denial of service effect on the target sites, affecting far more than just people wanting that one set of tickets.

So if you could convince me that scalping is fine, I don't see how you can state that this group did absolutely nothing wrong.

Re:Hrm

[Kaz Kylheku]

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?

The legitimate capitalist known as a ``scalper'' takes on significant risk: namely that he will be left with worthless, unsold tickets once the event is over.

As the concert date and time nears, the probability that a ticket remains unsold increases. This creates an incentive for the scalper to reduce the markup on the ticket in an attempt to offset a possible loss. It's better to sell a 100 dollar ticket for 60 bucks, than to recover nothing at all.

A scalper cannot jack up the price of a ticket arbitrarily beyond the fair market price. At best he can hope for emotional factors; he will snag that buyer who will pay ``anything'' to see his favorite artist at the last minute and has a lot of money.

By contrast, ticket issuers don't have such a great risk because they simply issued the tickets at little cost per ticket. If 20% of the venue is not sold, they still make money. So they can simply invent a price and dictate. In fact, they can jack up the price such that they will not all sell out. It may be more profitable to make it so expensive that only 90% of the seats are filled, than so cheap that 100% of the seats are sold.

How do you know whether tickets being sold are discounted? Relative to what, exactly? Discount or surcharge have to be measured only against one standard: fair market price. The only way to know the fair market price is to have a liquid market with free buying and selling. Only thanks to scalping activity can we know what the fair market price of a ticket is. If scalpers face losses, then it means tickets were overpriced. If they profit, tickets were underpriced. Without scalpers, we don't know.

Re:Hrm

[Richy_T]

They also allow people who would otherwise miss the show to gain entry at the last minute for a small premium (I think we paid 50% over for turning up at the last minute for a Stone Sour/Lacuna Coil gig). Don't characterize all that buy from scalpers the same way.

Re:Hrm

[hey!]

Well, I am certainly sympathetic to the argument that if the concert promoter sets the price of tickets wrong by making it too low, it's not necessarily *dishonest* for some third party to make a few bucks at arbitrage. Still, there's a few wrinkles in this scenario worth considering.

First, what are you buying when you buy a ticket, a piece of paper? No. You are buying the right to attend an event. *If* the providers of that event stipulate that the right being sold is not transferable unless it is given away or the purchaser was acting as an agent for the planned attendee when he bought the ticket, then what has the purchaser bought from the scalper? A piece of paper. He *cannot* buy the right to attend the event because that right is not transferable. The scalper is encouraging the purchaser to attend the event fraudulently.

Of course, you might say, "no harm, no foul." That's a different ethical approach, more utilitarian and less legalistic. Well, it's not necessarily the case that there is no harm. The economic relationship between the performer and the audience does not begin and end at the ticket price. There's merchandise sales, for example. The economically optimal price for the ticket, all things being equal, might result in fewer attendees, reducing merchandise sales and future sales of recordings and tickets. Some performers may not like playing to venues with many empty seats, and choose to the avoid larger venues. That harms the venue's owners.

I believe if the performers and concert promoters are amenable to reselling tickets that's a *different* story; but if tickets are on sale at less than the price which maximizes gross revenue, that doesn't necessarily mean the price has been set too low.

Re:Hrm

[sjames]

Because the terms of sale set a maximum number of tickets per person and this corporate person is knowingly violating those terms repeatedly and is using a series of shells to hide their identity.

Re:Hrm

[sjames]

Not if there are empty seats all over they don't.

Re:Hrm

[Kaz Kylheku]

Tickets should go to the people who really want to go and are willing to pay for it.

If you want to ensure tickets for some people who really want to go, but are ``broke-ass scrubs'', then you need some clever system in place to defeat scalping.

Sell expensive tickets, but then give rebates, such that it's very difficult for scalpers to obtain those rebates.

Or, issue tickets tied to identity (like what airlines do).

Variation on rebate:

Sell expensive, but fully refundable deposits on good seats (so fans can secure early bird seats). Then charge for the actual ticket at the door. Then there are two tickets: the admission ticket (which cost $$$), and the supplementary seat ticket (which is free).

Never hand out cash rebates, only credit the original credit card.

Re:Hrm

[meta-monkey]

I disagree that this is a "problem." The sales/pricing/marketing divisions of Sony and Microsoft are not stupid. It's not like it simply never occurred to them "hey, we could just charge $800 for the system and $10 for the software, and then not care if nobody buys any games!" They know if they did that, nobody would buy the system because $800 is a big scary number, especially for parents buying toys for their kids. Similarly the band might need $100/head to make the show worthwhile, but they'd scare off people with $100/ticket prices. So instead the ticket's only $60, but then it's $10 for parking and $15 for concessions and then they'll sell a CD and a T-shirt.

Your mistake (why you think there is a problem with the pricing models when there is no problem) is assuming rational consumers. To the rational person, it's all the same thing. If I buy a game system for $300 and then 10 games for $60/each I spend the same as if I paid $800 for the system and $10/each for the games. But it's well-known in economics that people behave predictably irrationally, hence pricing models that hide total expenditures or break up payments.

Re:Hrm

[meta-monkey]

The strategy I would adopt in the future is: First, assume your garage sale starts an hour before advertised. If the sign says 8AM, understand people will be showing up at 7AM, so have everything priced and ready by then. Next, do not haggle over anything until, say, half an hour into the sale. Prior to that, everyone you're dealing with is an ebay treasure hunter. They're looking for the most valuable items you have, and intended to haggle with you to beat you down further on price so they can turn around and sell it on ebay for a profit. Since they recognize these as the most valuable items, rest assured those items WILL sell during the day. If you plan to haggle over prices, do so, but save it for later in the day when you're dealing with people who actually need discounts instead of profiteers.

Re:Hrm

[phorm]

Except that you don't know if you're buying the real deal or a worthless fake, especially with eTickets which can be printed from home.

Re:how come there are no 'good' genius's only evil

[MrQuacker]

The "good" genius works for the corporations. The "evil" ones are always the ones doing things the corporation does not like.

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..

I guess it's a scam

[the_humeister]

I'm more inclined to think that the ticket prices were set too low to begin if these scalpers are able to find buyers at higher prices. Personally, I'll just watch (or not watch) the stuff on TV.

Re:I guess it's a scam

[Joce640k]

Nope. The price which generates optimal profit would have 1/3 of the seats empty (including most of the front row) and a bunch of people in suits sitting in the second to fifth rows. True fans would be somewhere near the back unable to hear much because they don't want the music so loud it offends the suits.

Does that sound like a "rock concert" to you...?

I think they just really liked springsteen

[Rivalz]

I think I could spend 2 years in min security prison for 5-10 mil and be happy about it.
Still a pretty good idea they should open a franchise.

Prices are already screwed to hell for these events. I say good for them sorry they got caught.
If they were smart they would have lived in a different country.
I'm just curious but they had to have some serious start up money.
Were they using stolen CC#'s or did they just have countless credit cards?
You would think this would be pretty easy to track down the bank accounts that they use.
Collect who's paying for what and go from there.

Re:I think they just really liked springsteen

[Buelldozer]

Prepaid Visa / Mastercards or a card that will give you "one time use" numbers would be two simple ways to sidestep the "follow the money" investigation.

Re:I think they just really liked springsteen

[DaveGod]

I think I could spend 2 years in min security prison for 5-10 mil and be happy about it.

Better enjoy it quickly - ill-gotten gains are confiscated. Here in UK under the Proceeds of Crime Act, I gather the US has something similar.

Re:I think they just really liked springsteen

[nitehawk214]

Prepaid Visa / Mastercards or a card that will give you "one time use" numbers would be two simple ways to sidestep the "follow the money" investigation.

Almost certainly not. Law enforcement can easily ask the credit card company for details and it all points back to the master account. However this could make casual database searching a bit tougher, using this plan would still have all the accounts with the same name.

Re:I think they just really liked springsteen

[carigis]

most websites do not allow prepaid credit cards as they generally have no address or zipcode tied to them and will not pass card authorization methods. at least as far as I know. also, the one time use numbers are still tied to an original account or they would not know who to bill for the purchase... or be able to process returns to the original account.. the trail is still there .. its just capped at a dollar amount.

Re:I think they just really liked springsteen

[Raenex]

prepaid credit cards as they generally have no address or zipcode tied to them and will not pass card authorization methods. at least as far as I know.

You're wrong.

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.

Re:how come there are no 'good' genius's only evil

[guyminuslife]

No, that's not correct either.

The "good" genius works for the corporations. The "evil" genius controls the corporations.

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

[ian_from_brisbane]

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

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

[RealGrouchy]

And they both lived in the White House, too! ZOMG, they're exactly the same!

- RG>

Ebay it

[Anonymous Coward]

Shouldn't Springsteen and other artists try to maximize their profit? They could have people bid on individual seats or blocks of seats, with a certain reserve price per seat. At some point, the auction ends, and the tickets are awarded to the winning bidders. The remaining tickets could then be discounted or sold at the door.

Forcing people to pay market price for the seats would prevent the gap between supply and demand that scalpers exploit. It would also make artists and booking companies more money, and result in fewer grumpy fans -- sure, they might not get an awesome deal occasionally, but neither would they be prevented from attending a concert they wanted to attend in the seat they were willing to pay for.

Re:Ebay it

[FatLittleMonkey]

Moreso, the artists/promoters could tune the auction to deliver the preferred result, maximum profit or maximum venue capacity.

Smart auction-ware could even detect larger or smaller than expected demand, and switch to a larger/smaller venue; either increasing profits, or increasing crowd-density & atmosphere.

If you have scalpers, you are doing it wrong.

Re:Ebay it

[Improv]

What if they don't want to maximise their profit? What happens if people are not jerks? Are you going to demand that of them?

Re:Ebay it

[Richy_T]

If ticketmaster is involved, neither of your questions have much relevance.

Quantum Random Bit Generator Service

[PatPending]

CAPTCHA security - more worthless by the day (23 July 2008)

The article suggests using the Quantum Random Bit Generator Service sign-up approach; you do know your maths through at least calculus ... right?

Re:Quantum Random Bit Generator Service

[MrQuacker]

What ever happened to the kitten-captcha? aka, pick out the pictures of cats from a 4x4 grid of pics.

Re:Quantum Random Bit Generator Service

[Yvan256]

How about giving one of those RSA generator to everyone with access to the internet?

Or since we're talking about cash transactions here, why aren't the credit cards equipped with built-in RSA number generators yet?!

Re:Quantum Random Bit Generator Service

[PatPending]

One issue with that is: the host has a finite set of images stored on the server. To circumvent this, client(s) could run each newly encountered image through a hash algorithm to get its signature and (manually) pair it with "cat" or "other" to populate a look-up table for a given website. This works even if the server randomly names the files. If the server uses the same file names every time then the task is simpler--no hash is required. Things get more complicated if the server randomly toggles bits within the image. Although this can be circumvented by file comparisons.

Re:Quantum Random Bit Generator Service

[Splab]

Flip a bit, makes hash algorithms worthless but keeps the picture right.

Re:Quantum Random Bit Generator Service

[DarkOx]

Not really a solution. Unless the pictures are quite large ( and then you wasting time and bandwidth transferring them) I can easily generate rainbow tables of the hash of each image with each combination of one or two bits flipped. An indexed table will let me match those hashes pretty quickly even with a few million rows. Hell with home systems having 4gigs of ram memory in them it would be easy.

Re:Quantum Random Bit Generator Service

[ovirto]

Extensive research showed that pictures of kittens turned off potential consumers -- except young females who were too captivated by the pictures of kittens to complete the transaction.

Re:Quantum Random Bit Generator Service

[K. S. Kyosuke]

And the programmer will counter it most likely with locality-preserving hashing.

Re:Quantum Random Bit Generator Service

[igreaterthanu]

the host has a finite set of images stored on the server.

Captcha is big business. Why not have a few live cats and web cams?

Re:Quantum Random Bit Generator Service

[drinkypoo]

Or since we're talking about cash transactions here, why aren't the credit cards equipped with built-in RSA number generators yet?!

keyfob credit cards are just starting to roll out. they're still too expensive to deploy to everyone but are coming down.

Re:Why is this a "scam"?

[r1_97]

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

Who ever labled this insightful? Soros does not use bot nets nor deprive the public of any opportunities to invest in anything (analogous to grabbing up tickets to concerts).

Re:How hard is it to sell tickets right

[ragethehotey]

This does nothing to solve this type of scheme, as the entire idea is based on putting up as many "chances" as possible to get tickets at the same time. How would this prevent the scalpers from pre-registering?

Re:Why is this a "scam"?

[DarkOx]

Actually really big money men like Soros pay top dollar to have the fastest connections into the systems that run the exchanges. They also have computer systems running what ever algorithm they think will make a money that day sitting on their side of those connections waiting to pounce. Ever try to get in on a hot IPO as retail investor? You can't, ever try to unload something during a major sell off and wonder why it takes hours when the trade to buy it took seconds (sure some of that might be there are no buyers but..)? Most of this is because you at the back of the line when it comes to placing orders and people like Soros are up front.

Buzzwords cloud the issue

[fishbowl]

Language like "hacking" and "scalping" tend to hide the actual crime here.

The ticket purchase/sale is a contract, unlike some of the online transactions that people assume are contracts but are not. (There is a mutual agreement to terms, and consideration is exchanged for something of value.) The people who bought the tickets represented a fictitious identity while entering into a contract. This is a crime of fraud (not "hacking") and because of the electronic nature of the transaction and the intent, it constitute wire fraud.

What I'm wondering is what the threat was that persuaded them to plead guilty.

Re:Buzzwords cloud the issue

[PatPending]

What I'm wondering is what the threat was that persuaded them to plead guilty.

The original indictment had 43 counts; they plead guilty to just one.

So maybe they simply didn't want to risk having to serve a N-times longer sentence (where N is greater than one and less than 44).

Re:Buzzwords cloud the issue

[noidentity]

Ahhh. So they did actually defraud someone (the seller of the ticket). It still seems a losing battle, because the ticket sellers are attempting to defy basic market principles, that of pricing tickets below market value and somehow expecting to prevent resellers from making a profit off the difference. They seem like spammers in a way, always there because they can find a way through, and people keep buying from them.

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.

Re:Buzzwords cloud the issue

[phorm]

A concert isn't quite the same thing as a flight. A flight is usually part of a bigger event for most people I know (a holiday, a wedding, etc), and involves a fair bit of pre-planning.

A concert can be a bit less so. I just bought tickets to a concert and a play occurring next year on the assumption/hopes that my GF will be able to attend with me. Since it's an Xmas thing, we won't be able to plan that until next month. If she can't go, I'll either have to bring another friend, or sell off both tickets to an interested party.

Also, the whole "valid ID" requirements for a flight are a bit more of a PITA for a concert. There are plenty of teens or other people who don't necessarily have a driver's license or a passport, etc.

High Frequency Trading

[Taur0]

What's the difference between this and High Frequency Trading? In both cases you're using very fast computers to give you an edge over normal people in buying items that you will then sell a short time later for a higher price to people willing to buy them.

Re:High Frequency Trading

[compro01]

Differences being

1. They're using a botnet, not their own servers.

2. They're purchasing the tickets under false identities, which is fraud.

Re:High Frequency Trading

[MrQuacker]

They bought them under multiple and false identities to get around the volume limits set per person. Not that different than setting up a dozen LLCs.

Re:High Frequency Trading

[Americium]

No, High Frequency trading is a benefit to you.

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

Here's a quote from the Chicago Board Options Exchange, ala wiki "The fast-growing practice of high-frequency trading, in which traders place vast flurries of securities trades, is speeding up execution times for all investors, making it cheaper to buy or sell and posing no risk to small investors."

However, they are still in the millisecond and microsecond range..... so slow.

Re:High Frequency Trading

[sjames]

The high frequency traders have enough money to buy off law makers.

Re:High Frequency Trading

[smellotron]

I'm genuinely curious: can you point out any recent legislation (either passed pro-HFT or blocked anti-HFT) that benefits high frequency traders to the detriment of the general market?

Re:High Frequency Trading

[sjames]

Nobody in government is even looking at it. They have piles of cash, that's why they aren't investigated at all.

That's also why drug dogs sniff high school lockers but not the trading floor (where cocaine's presence is the world's worst kept secret).

Re:High Frequency Trading

[smellotron]

HFT has been all over the news recently. Of course politicians are looking at it. It sounds like you are suggesting that every single person in Congress and the Senate has been payed off.

I can't comment about the cocaine allegation—never been on a trading floor. I don't know what that has to do with your argument, in any case. I guess it demonstrates that pit traders (NOT high frequency traders) have expendable income.

In an attempt to re-anchor this conversation with the main topic, I think that a big difference between a trader (of any sort) and a scalper is that the former is permitted by the exchanges themselves, whereas the latter acts in direct violation of TicketMaster's terms of service.

Re:High Frequency Trading

[Legion303]

What's the difference between this and High Frequency Trading?

The difference is, these scalpers aren't bankers, and thus don't own the United States government lock, stock and barrel.

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:High Frequency Trading

[sjames]

The wealthy have always been looked upon with less scrutiny than the rest of us and typically treated with kid gloves even when they must be prosecuted and punished. It doesn't necessarily happen because of a payoff, it happens because they COULD potentially make a payoff.

Currently, there's enough public outrage over the financial world that a politician must start looking at it, but it's not as if the same conditions haven't existed for over a decade.

Not really a big deal

[mnemotronic]

In the grand scheme of things, having to sit 20 rows back instead of 2 is not a big deal. Yea, it offends my self-righteous indignation, but it's not life or death. I don't think prison time is fair for people gaming the system. Our systems are designed for gaming. Our elected officials do it for a living, and what's the punishment? "Censure". On the other hand, I wouldn't protest if the perps were all separated from their reproductive organs by a crazed weasel. I would scalp tickets to that show.

Re:Not really a big deal

[ovirto]

Wait a sec, you're applying the "rules are meant to be broken" defense?

Re:So?

[MaskedSlacker]

Are you really that dense?

after hiring Bulgarian programmers to build 'a nationwide network of computers that impersonated individual visitors'

They rented a botnet to buy the tickets with. I don't expect you to RTFA before posting, but is the summary that much to ask for?

Why was it a scam?

[Snaller]

Something is for sale, they bought it. Isn't that how it works in capitalism?

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.

Your own network = botnet?

[xboxilve]

The 'botnet' these articles are talking about are their own dedicated servers, not virus infections like they are trying to imply. You don't need a botnet to crack captchas, you can use a server to queue up 1000's of captcha images and have third world workers solve them for a tenth of a cent. This entire case is basically just explaining someones business and then inserting and replacing words with ones that have bad connotations to get the public to think that they have solved a crime. Just replace the words 'computer network' with 'botnet', 'revenue' with 'ill-gotten gains', sending a web request with 'impersonating users', and throw in the words fraud, hacking, scheme, and bogus every other word and you can make anything look like organized crime.

Its not rocket science people..

[carigis]

They used a bot net to circumvent maximum ticket policies under assumed names ect , thereby commiting fraud on the ticket company. They also used automated means to purchase tickets from a system that is meant to take individual orders on a first come first serve basis.. again fraud. they then turned around and used those fraudulently obtained tickets to resell (tickets they fraudulently recieved) to unsuspecting buyers at an inflated price which they could set because they bought all the tickets fraudulenty. now.. if you can't see what is wrong here.. you've got some issues. Its a straight contract violation, fraud and unjust enrichment case..

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."

Re:Its not rocket science people..

[carigis]

uh no.. but your account might get cancelled.. But if you use a bot net to sign up for 15000 accounts using different fake names to get the most desirable gmail addresses or googles new service of the month.. which gmail is offering only on a first come first serve basis with a 6 account limit per person... then sell those accounts to people for $500 when you only got the account by lying and violating the terms in the first place you should. As your selling something you obtained under false pretenses.. your talking apples to oranges here and using a strawman argument. one is lying and violation of tos the other is FRAUD to obtain further financial gain at the expense of others. and even in your case if gmail has notified you to cease and desist and you still keep signing up fraudulent accounts under assumed names..or are using the accounts to commit 419 fraud or some other illegal activity from thier servers.... sure you should go to jail..or get fined.. its criminal trespass. if you want to be anonymous.. sign up for an account with a company that allows you to be anonymous. google doesn't OWE you anything and you have no right to take it under your own terms because thats how YOU want it. your solution.. is to not use the companies service and go somewhere else.. not steal it under terms you may like better.

Re:Its not rocket science people..

[xboxilve]

OK so they have to put in their ToS that someone can only sign up for a maximum of x number of accounts and THEN its a felony. Got ya.

Re:Its not rocket science people..

[carigis]

lol.. difficulty in reading comprehension? let me try a third time When you aquire something circumventing safeguards the system has in place to prevent you from aquiring it in that manner at the detrimental to others and then use your ill gotten gains to enrich yourself...or to commit illegal activities.... otherwise it is a civil breach of contract. which will likely just get your account cancelled. although that may not be long as ever since that kid killed herself when being bullied..by someone who entered fake info, the federal govt is looking closely at making violating the tos as a computer crime as illegal access to a private computer system and theft of service as you had no authorization to use the services because you broke the tos. so don't be suprised if that changes.. and simply lieing on your xbox live account becomes a felony.

Re:Its not rocket science people..

[fishbowl]

You aren't entering into a contract (there is no consideration.) That makes it a completely different situation in the legal sense.

Re:Its not rocket science people..

[fishbowl]

No, that's not what makes it a felony. It's the fact that it was a *contract* that made the subject of TFA a crime. Once it's a contract, the notion of fraud becomes possible. The GMail TOS isn't a contract.

Re:Its not rocket science people..

[xboxilve]

"You may not use the Services and may not accept the Terms if (a) you are not of legal age to form a binding contract with Google"

Go to the ticketmaster website and show me where it says you are entering a contract and why you should be charged with a FELONY CRIME for entering a fake name/payment details on their website. There is a huge difference between civil and criminal. Would you have a problem if slashdot can slip into the registration form that if you didnt disclose your real name and address on your profile that you can be sent to jail and be forced to pay them $5 million dollars of restitution? This is why we have civil lawsuits, there is absolutely no reason tax payers should be responsible for funding a criminal investigation to help ticketmaster. Where do you think their "ill-gotten gains" they are going to be forced to give up are going to, you?

Solution for this

[Guillermito]

As ohers have previously said, the problem here is that the tickets prices were not high enough (in a free market sense).

The solution would be to sell the tickets at the right price, that is, the price consumers are willing to pay.

I think a system like this would do the job

1. The day tickets go on sale, charge an outrageous amount (say, $100,000).
2. Then gradually decrease prices each day (or even every hour)
3. Last day the tickets would go on sale for $1

In that way, each person would decide which is the "right" price to pay. Do you *really* want to see this show? Would you risk missing it because you want to save a few bucks and wait until tomorrow? Do you think it would be a good deal to buy tickets now and resell them later for a profit? OK go ahead. How many tickets? At which price? Are you sure you will be able to sell them, considering that people willing to pay a higher price already had the opportunity to do so and refused?

That's a lot of effort

[meta-monkey]

If they'd just put that much time and effort into a legitimate operation they'd probably still have made millions and wouldn't be facing jail time.

Rich vs. Poor

[nuckfuts]

So what you're saying is you don't mind living in a society in which the richest few people get the best of everything, because that's what would happen. There's a reason why the front rows at NBA games are filled with celebrities, or why most season tickets sold by sports franchises are purchased by corporations (who claim them for tax write-offs). Common folk like me would be priced out of ever seeing a popular show, just like many common folk are priced out of getting, say, good health care. You may believe that capitalism is fair for everyone, but from my point of view it simply funnels wealth and privilege to a tiny fraction of society. I see no value added to society by scalpers. They benefit only themselves by systematically inflating the price of tickets for everyone else.

Re:Rich vs. Poor

[whoever57]

Taking this a little further, perhaps there would be *more* shows -- just not more by your favorite band, but rather more bands. Money would be available for more venues, etc..

In economic terms there would be more money available to the promoters of shows, concerts, etc., so they would increase capacity, instead of the extra funds either not being available or being siphoned off by the scalpers. By underpricing the tickets, promoters tend to prevent competition.

Re:Rich vs. Poor

[martin-boundary]

In economic terms there would be more money available to the promoters of shows, concerts, etc., so they would increase capacity, instead of the extra funds either not being available or being siphoned off by the scalpers. By underpricing the tickets, promoters tend to prevent competition.

That's silly. You can't just "make more" of something by willing it. In the real world, there are physical limits on things like capacity, talent, time etc. No matter how much money gets thrown at these things, they don't increase.

If there's one band everyone wants to see at the same time, then only a small number of people can actually do so. Economics is about one particular way of choosing those who can, and those who will miss out.

Re:Rich vs. Poor

[whoever57]

If there's one band everyone wants to see at the same time, then only a small number of people can actually do so. Economics is about one particular way of choosing those who can, and those who will miss out.

Is there some physical law that limits the number of bands? Didn't think so. Is there some physical law that prevents the building of new venues? Didn't think so. With more money available, more bands can be promoted, leading to more availability of concerts -- just not concerts of existing bands.

Online ticket sales are a failure.

[rickb928]

1. If event ticket sales are intended to sell tickets to those who actually intend to attend the event, then resales are contrary to the intent of the initial sale.

2. If event ticket sales are intended to provide the maximum revenue (or as close to it as can be in an uncertain market) to the initial seller, then resales should be conducted by the original seller, or the original seller should benefit by sharing a portion of the proceeds of resales.

3. If resales exist only to enrich scalpers (arbitrageurs by a more elegant word), then these scalpers add no value to the original seller.

4. When event tickets are available in a finite quanitity, there will most likely be more demand than supply.

5. In view of limited supply, there will always be some who want to attend the event, but will be unable to obtain tickets.

6. Online ticket sales are impossible to control to prevent arbitrage.

My point is that it is patently unfair to those of us who want to attend an event, but are unable to purchase tickets when the sales are only online, due to the maipulation of the market by automated arbitraguers. And these arbitrageurs (scalpers) add no value to the event organizers, promoters, performers, or exhibitors, but only increase costs for purchasers. In effect, they take what should have been additional revenue from the original seller, who either chose to accept a lower price or misjudged the market. Unfair? Actually, my complaint is that it's nearly impossible to buy a ticket to a concert unless you camp on the seller and hope you aren't just a moment off. Or got behind the bots who owned the site.

So, how to fix this?

Maybe put the purchaser's name on tickets, and require identification. Among other things, well, actually, counterfeit tickets are sometimes a problem also, who knows. But, bottom line is whether or not this a problem.

So is this a problem that needs to be solved? I say yes.

Another much better solution - auction off tickets. Yes, this will make tickets cost a LOT more, but it seems that there are people ready to pay more than the face value, so try driving out the scalpers by upping the price to what the market WILL bear, essentially pricing them out of the market. And then of course the buyers will be paying the scalper price right up front. Or will they?

Problem is, this doesn't really solve my problem. I won't be paying scalper prices for bad seats, and so I'm out again.

Actually, the problem is simply one of supply and demand. So I'll always just be hoping I got in line early enough to buy tickets. Alas, I may never get a ticket to a concert, just my dumb luck. Unless I buy scalped tickets early when they are a little cheaper (unlikely) or get lucky.

No fixing this. Screw it. Let the scalpers hose us. I bet some of them conspire with promoters and the 'legitimate' sellers anyways. Ticketmaster in particular is happy to screw us any way they can. All the rest ditto.

So there's no solution. Damn.

Re:Online ticket sales are a failure.

[Firethorn]

And then of course the buyers will be paying the scalper price right up front. Or will they?

Don't forget opportunity cost and risk. Scalpers exist on the margin that roughly 10% of the population is willing to pay 10X the price on the face of the ticket to attend that concert; when they mistake the demand they can lose their ass.

That's why they earlier mentioned 'dutch auction' - that way a block of seats goes for the maximum bid it takes to fill them all. There's still the chance for arbitrage in the form of selling tickets to those that forgot or are unexpectedly able to pay more after the auction ended, but the question becomes one of is there enough who missed the auction, who are willing to pay THAT much more for tickets?

. Ticketmaster in particular is happy to screw us any way they can. All the rest ditto.

I've heard that one of the biggest scalping operations for ticketmaster tickets is a subsidiary of ticketmaster.

Re:Online ticket sales are a failure.

[drinkypoo]

There is basically one way to solve this problem without inconveniencing all involved, and that is to make a percentage of all types of tickets (e.g. floor, seating, balcony) available only to walk-in sales. Meanwhile, you should be supporting new music, and let the masses of asses or residuals from commercials support the sellouts (or buy-ins, however you look at it.)

Re:Online ticket sales are a failure.

[rickb928]

"Well, it doesn't matter what they intended, there isn't anything which says the tickets enable the purchaser to attend, in fact they almost all specifically say they enable the ticket bearer to attend."

Not true. The New England Patriots season tickets are a license to attend, and the named purchaser cannot resell them by contract, except through the Patriots' reselling partners. This is not always enforced, but if the Patriots see blocks of tickets online elsewhere, they have been known to warn the seller that these tickets will not be honored except for the original purchaser. I bet other NFL teams do this. And yes, the Patriots do this to manipulate the market and share in the reselling profits. If the ticket or th eevent don't specify otherwise, well, then it's the bearer. The distinction between buying a ticket to attend and buying a ticket to speculate I won't delve into.

"So the intent is obviously that the ticket grants entrance, and that right transfers with the ticket itself. Thus, they are intended to be bought, sold, and transferred. Otherwise the ticket would say "not transferable"."

Semantics, perhaps, but I wonder how many exhibitors intend for their tickets to be resold, especially for a profit. As a business process, they would probably prefer to be profiting from the reselling activity - and in the case of Ticketmaster, they DO, though they are actually a seller, not an exhibitor.

"In which case instead of selling them to anonymous people they should put the ticket in someone's real name... problem solved."

Reference my notes about the Patriots.

"So stop attending events where the promoter relies on a first-come-first-serve system. THAT is the root of the problem; the promoter is too lazy to use a lottery-to-purchase system."

There goes 99% of the market. Thanks for the helpful advice. Leave it to an AC to recommend taking an action that guarantees failure to solve the problem.

And are lotteries any 'fairer'? At least I am under no presumption that anything but chance gets me a ticket. No change there either. Lotteries, by the way, don't solve the reselling or box-stuffing problem. The bots will happily enter the lottery in overwhelming numbers and win a disproportionate share of tickets. I bet it's already happened.

Reserving some tickets for walk-up sales doesn't solve the problem either. try will-call or walk-up purchases for a popular Broadway show. There is a regular business in people buying day of show tickets for various outlets, like hotels and even American Express, to offer to their clients as a perk or convenience.

Reality is that for a finite resource, there is no entirely fair way to market the product. This is the market at work. I would like it to be not so obviously and patently UNfair, but this grates on my Conservative principles, so mostly I just want the rules to be known anbd observed. Bots should be against the rules. But I may be all wet on this.

They broke a contract

[pavon]

If I require you to agree to a certain terms before I will sell you a ticket, and you break those terms, then you have broken the contract you have made with me. So now we are are having the government step in and tell people that they cannot sell their services under their own terms? :)

The performers aren't indentured servants, they should have say in who they want to perform for. If they want to perform for just their friends they should be allowed to. If they want to perform for highest bidder they can do that too. It is their choice (within reason), and it doesn't require any government intervention beyond the normal enforcing of contracts. Without knowing the details of the case, it is hard to know whether the hacking charges are valid, but given the scope of the operation I think that treating it as criminal fraud rather than just a civil case isn't unreasonable.

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.

Real estate

[chihowa]

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.

Having just purchased my first house, I saw this quite a bit in real estate. My wife and I have decent jobs and plenty of free time for projects, so we wanted to get a house that needed a little TLC for a lower price and fix it up ourselves. The problem is that "investors" and fix-and-flip types could, and would, swoop in and snatch these houses up before people who would actually live in them could. Then two months later the houses are back on the market at double the price (and the "upgrades" are of dubious quality, anyway). These "investors" often buy the houses outright with cash, so their offer looks the best when compared with a young couple's financed offer.

Re:Real estate

[Firethorn]

The problem is that "investors" and fix-and-flip types could, and would, swoop in and snatch these houses up before people who would actually live in them could.

I'm willing to bet that you see a lot fewer of these types anymore; many, if not most, lost their butts during the crash, and even now home prices aren't appreciating enough to justify the opportunity costs. I just bought a house(as in I haven't even got my furniture yet), and I saw a number of houses 'fix and flip' types could have made some real money on, but they were nowhere to be seen.

I will agree on the dubious quality of the 'upgrades'. All shine, no substance.

Re:Real estate

[drinkypoo]

Most people have no fucking idea what they are buying. They don't know what the problem signs look like. Most people don't even know that most people remodel their kitchen and bathroom after their purchase. In short, most people are wandering like the lost.

The only houses anyone should be buying if they are smart are foreclosures, there are great ones everywhere and they are cheap as hell. And it seems that only smart people are able to buy houses right now because foreclosures are the only thing really moving.

Re:Free market?

[Tim the Gecko]

Never mind that only the rich will be able to afford Springsteen tickets at the jacked-up prices. Who cares?

That's terrible! The wrong kind of person might end up at the concert. I'm sure Springsteen wants a fan sitting by a browser pressing control-R all the time to get the tickets, rather than someone who works five days a week loading crates down on the dock.

Re:Why is this a "scam"?

[fishbowl]

>Tickets are for sale, they bought them and offered them at a market price.

They falsely identified themselves while entering into a contract. This would be wire fraud in your line of business as well.

Re:So?

[fishbowl]

>They rented a botnet to buy the tickets with.

That was probably legal. What they did that was illegal (fraud) was using fabricated identities to make the purchases.

Re:So?

[fishbowl]

If you use a false identity to enter into a contract, you commit fraud. If you do this with an electronic system, you commit wire fraud. This is precisely what they were accused of doing, and they pleaded guilty.

Why put all that effort into illegal activity?

[jtownatpunk.net]

Serious question. It sounds like these guys put a lot of effort and financial resources into this. It seems as if they were using their own equipment (NOT A BOTNET!!!) and there's no indication in the article that they were using stolen credit cards or other stolen funds to pay for the ticket purchases. Didn't it occur to any of them at any point in cooking up this plan that they could start a legitimate business with the same amount of work and they'd never have to worry about getting caught.

Re:Why is this a "scam"?

[evanism]

I can see the outrage and the dishonesty, but I admit, even after a few hours after my first post and thinking it through, that I can't see the actual "fraud". They bought a ticket to put a fans bum on a seat and that's what is done. If they had stolen the ticket, or used a hacked botnet or fake credit cards, then these are a whole range of other crimes. To have simply purchased a whole bunch of tickets as John Doe's from a company that was selling them, may perhaps be a breach of contract... A CIVIL tort, but a criminal one?.. Perhaps this is one for my "does not get" list.

I hope the DOJ hems them up good

[das3cr]

For years now I have been trying to go see a certain artist perform. Only to find the only tickets available ... moments after scheduled release, was at the shady reseller sites. I've always refused to pay 5x the face value or even 2x face value. Especially when it is blatant fraud on the part of the re-sellers.

Hopefully the DOJ hems them up in prison for a very very long time indeed. Say, one day for every ticket they snatched up .. or one day for every dollar they made. Or just take them out back and shoot them. They deserve it.

Only one way to eliminate scalpers

[George_Ou]

I realize that the artists and the venue want to offer reasonably priced tickets to consumers directly at below market price, but there will always be a-holes that will buy up all those tickets and then sell them to the market-driven price. The problem here is that it's fundamentally impossible to sell something below market price because someone will buy it up and resell it at market price unless you have very tight entry controls. For example, they might try to sell these tickets like airline tickets and make them non-transferable. That means every ticket purchased will only be valid for someone if their ID (with some strong crypto signatures) matches the credit card used to buy the ticket. Of course this is quite difficult to pull off. Short of that type of gate authorization system tied to the purchaser, they should just offer it up to the highest bidder. That way the bidder can at least be sure that they're getting real tickets and not some fake copy of a first-row seat. Believe it or not, there are plenty of scalpers who make a living selling fake tickets.

Re:Free market?

[Joce640k]

That's the thing., it *doesn't* mean the original prices weren't high enough, it means they were realistic for the true fans.

What you did is take the tickets from the real fans and put them in the hands of the idle rich who only go to the concert because they've got nothing better to do on Friday night and/or because they wanted to impress somebody or other.

Still doesn't work...

[Joce640k]

There was an Iron Maiden concert near here last summer, people were camped out two days before it to get good seats. I'm sure those are the people the band want in the front row, not a bunch of suits (or even empty seats if the suits find something better to do).

Re:So?

[MaskedSlacker]

Are you really arguing that building botnets is okay?

aha

[fireylord]

They did not defraud ticketmaster, they were defrauding the people buying the tickets.

  A t the simplest level, because they bought tickets in a manner that was in breach of the terms of service of the ticket company this means that the tickets were technically invalid. People who purchased said tainted tickets could be refused entry based on the fact that, when they were originally bought from the original vendor they were obtained in a manner not in compliance with the terms of service.

What does this mean?

It means that they were knowingly sold on in bad faith to a third party when they were technically not worth the paper they were printed on. This is the fraudulent action, and they knew it. The price at which they sold the tickets on is actually irrelevant.

Re:aha

[icebike]

No one was refused entry with these tickets.
You made that up.

you are clearly innocent of the music industry :-)

[fantomas]

"The performers aren't indentured servants, they should have say in who they want to perform for."
You are clearly not too familiar with the music industry ;-)

Had to sign up for thousands of bogus e-mail ...

[Kaz Kylheku]

addresses?

Say what? Why would you sign up for e-mails, when you've registered hundreds of Internet domains? I have one domain and could generate thousands of working e-mail addresses
  in a few keystrokes:

$ clisp -x '(loop for x below 10000 do (format t "~a: kaz~%" (gensym)))' > /etc/aliases

What is a bogus e-mail, anyway? If they use it as a real end-point for receiving a ticket purchase confirmation, then it's a real e-mail address.

A bogus e-mail address is one which cannot be used to send anything to whoever provided the e-mail address. You don't "sign up" for a bogus e-mail address; you randomly generate it. E.g: "asdf@xyzzy.com".

charges?

[nurb432]

What crime occurred here? Fake emails and shell companies aren't exactly moral, but last i heard are legal as long as you aren't using them to defraud the taxman or something.

Unless they were using viruses to 'recruit' horsepower i don't see any legal issue here.

Deposit system.

[Kaz Kylheku]

Scalping should never be illegal since it is just free enterprise.

But it should be fair game to try to put in place mechanisms to prevent it. Airlines do it by binding tickets to identities.

Here is another idea a: deposit system tied to credit cards.

Suppose cheap tickets are available online for $15 so that important fans (like kids who can't afford pricey tickets) could see a young band. You want these fans to be able to go to the concert because one day they will have good jobs and support the old band.

A deposit system could discourage the scalping of cheap tickets.

To get an early seat for $15, you have to put down, say, $215. When you show up to the concert, you get $200 back.

What can a scalper do now? He has to take the risk of buying a $215 ticket, which may not sell. Come close to show time, he's holding something he paid $215 for. To merely break even, someone has to hand him a wad of cash totalling $215.

That person, in turn, will only hand him $215 if he believes that he can get most of that money back (i.e. recover the $200) deposit. But it will be made very clear to everyone that refunds will be performed strictly by crediting the original card, never in cash! So basically, the scalper has to convince some suckers at the door that the ticket is worth >= $215.

A tightly regulated procedure can be put in place to refund the deposits to ticket holders who were unable to make the show. They would have to go somewhere in person and present the ticket, the credit card which matches the ticket, and picture ID. (If it's daddy's credit card, daddy has to go there).

Refunds to those attending concerts could be done in the absence of the credit card being presented. This opens the possibility that a scalper sells a ticket for $15, and can get the refund when the ticket is used. However, if the ticket is not used, he has to go through the above system to try to recover the deposit. Moreover, the limitations on number of tickets per credit card would have to be defeated somehow. For instance, the scalper would have to use some online banking website to generate one-time-use credit card numbers, so he can use a unique one for each ticket. Such credit card numbers could be refused in the post-concert refund system (where you have to present the actual plastic card with the number).

Another way to fight the scalpers would be for the issuer to make phony purchase requests to the scalpers. Buy those cheap tickets from the scalpers, and then put those tickets into a "do not refund" database.

How do scalpers enable that?

[phorm]

Most concerts etc I've been to have doors sales up towards the last minute. If there are unsold tickets, they'll be available at the door. No need for scalpers at all.

Not really a botnet then

[phorm]

Sounds more like a "server farm" than a botnet to me...