Congress Passes BOTS Act To Ban Ticket-Buying Software (arstechnica.com)

Congress passed a bill yesterday that will make it illegal for people to use software bots to buy concert tickets. Ars Technica reports: The Better Online Ticket Sales (BOTS) Act makes it illegal to bypass any computer security system designed to limit ticket sales to concerts, Broadway musicals, and other public events with a capacity of more than 200 persons. Violations will be treated as "unfair or deceptive acts" and can be prosecuted by the Federal Trade Commission or the states. The bill passed the Senate by unanimous consent last week, and the House of Representatives voted yesterday to pass it as well. It now proceeds to President Barack Obama for his signature. Computer programs that automatically buy tickets have been a frustration for the concert industry and fans for a few years now. The issue had wide exposure after a 2013 New York Times story on the issue. Earlier this year, the office of New York Attorney General Eric Schneiderman completed an investigation into bots. The New York AG's ticket sales report (PDF) found that the tens of thousands of tickets snatched up by bots were marked up by an average of 49 percent.

Comments

How is this different from arbitrage on the NYSE

[Anonymous Coward]

other than that it is done by broker bots instead of scalper bots?

I wonder

[roman_mir]

Is this the type of an issue you are thinking about when you cast your vote? Who out there is thinking: "I really need the government to exist so that it could set up laws to prevent people from buying concert tickets with bots"?

More regulations stifling businesses.

[FictionPimp]

Free market dictates that ticket companies that can't protect themselves from bots should go out of business and be replaced by ones that can. This is major government overreach. TRUMP!

Re:More regulations stifling businesses.

[ADRA]

Ticket retailers are both a monopoly and an oligopoly. Essentially all retailer has a monopoly over a given venue. The venue may be allowed a small amount of ticket blocks which are used for their own purposes (direct sales, gifts, charity, marketing, etc..) but the vast direct-sales come through a single distributor.

Those ticket distributors are largely an oligopoly, since venues only want to deal with reputable outlets with large market shares in order to maximize sales.

All of them (Venue, Talent, Distributor) have a very shaky interest in eliminating scalping at all. Tickets are sold, the stadium is filled, most people are happy. Scalping only hurts one group of people: Consumers. In the long long term, people will be so jaded with going to 'ticketed' shows that the attendances will drop below capacity. That also hurts the smaller acts far more disproportionately than the rich ones (which have a more captivated audience to saturate the scalping tax). The arts dies and we all point fingers at one another instead of 'fixing the problem', whatever that looks like (I've given my 2 cents in a different post).

Re:More regulations stifling businesses.

[SomePoorSchmuck]

Ticket retailers are both a monopoly and an oligopoly. Essentially all retailer has a monopoly over a given venue. The venue may be allowed a small amount of ticket blocks which are used for their own purposes (direct sales, gifts, charity, marketing, etc..) but the vast direct-sales come through a single distributor.

Those ticket distributors are largely an oligopoly, since venues only want to deal with reputable outlets with large market shares in order to maximize sales.

All of them (Venue, Talent, Distributor) have a very shaky interest in eliminating scalping at all. Tickets are sold, the stadium is filled, most people are happy. Scalping only hurts one group of people: Consumers. In the long long term, people will be so jaded with going to 'ticketed' shows that the attendances will drop below capacity. That also hurts the smaller acts far more disproportionately than the rich ones (which have a more captivated audience to saturate the scalping tax). The arts dies and we all point fingers at one another instead of 'fixing the problem', whatever that looks like (I've given my 2 cents in a different post).

That's not how it works. You stopped describing the process halfway through and then waved your hands and said "the arts dies". QED.
Scalpers are drawn by profit motive. That profit motive exists because, clearly, there is untapped demand. A scalper is a speculative investor looking to realize the remaining value in that untapped demand. Scalpers don't just go out there and buy up every ticket for every show, any more than business investors tell their portfolio manager: "Go buy 100 shares of every company in existence!"

In the long term, yes, people will get jaded with ticketed shows where it's 35 dollars to get into some dive bar with a 3 meter box along one wall serving as a "stage", and then attendances will drop below capacity. That is, the market will cease to generate extra demand for many concerts at the prices offered. In the instances when this happens, the speculative investors who bought up blocks of tickets will actually LOSE money, because they will have to resell the tickets at/below face value, or may not be able to resell them at all because demand has already been turned off by the hefty asking price. Next season when that band comes through or when a similar band plays that venue, the investors already know, "Hey, almost no one is spending 50 bucks to go see The Decemberists play in a ramshackle beer hall, no matter how much hipster hype they get on college radio". They don't buy up all the available tickets. This leaves more tickets in the hands of the original ticket seller. Word gets around among fans that "Hey there are still lots of tickets left to that show and this year they're only $18.50! Me and Kaiteleighn are going - come with us!"

The market adjusts. You are talking about this as if tickets have some durable value and are being snatched up and hoarded forever by greedy scalpers. That isn't the case. Tickets are a commodity. Scalpers are commodities traders. Scalpers won't keep buying up tickets that don't return profit. Profit doesn't exist unless demand is higher than supply.

Re:More regulations stifling businesses.

[unrtst]

I don't get why this is a regulation/legal problem at all.

TicketMaster, for example, allows for resale on their site at a higher price. If this were only about protecting the consumer, they could simple say, "no resale". Instead, they get in on the scalping action while being able to distance themselves from it.

They could easily do fixed pricing, limit bulk purchases, and could require positive ID at the door of the purchaser. If the purchaser can't make it (ex. season passes, or something happens), they get their money back and the tickets go back on sale at the same price (or current market price if the cost had gone up since then).

Making bots illegal is a way to eliminate competition so that only the outlets they work with get to sell and resell tickets. The only good reason to allow resale via the sites now is to aid in getting scalpers off the street. If they cared about the market price, they'd just turn it into an auction for the majority of the seats; they'd rake in more money than allowing resales, and they'd eliminate scalpers entirely, and they could still allow resale after the auction closed for those that can't make it - those folks would likely lose out on some money, cause the market value was already determined.

The law makes no sense. And, as others have noted, mechanical turks would skirt the law just as easily, so it doesn't do a damn bit of good anyway. They need to figure out what they want, and do it, rather than trying to have it both ways at once.

Re:How is this different from arbitrage on the NYS

[Anonymous Coward]

Good point. High Frequency Trading should be treated the same way. It won't be. But it should be.

Let them have them

[Anonymous Coward]

The only reason this problem exists is because people will pay more than the face value for tickets. If everyone just said no these jerks would get stuck with all those tickets and not be able to recoup their costs and they'd go away on their own. No government intervention required. In fact, I'd love to see empty venues for a few shows while these assholes take a bath.

Re:How is this different from arbitrage on the NYS

[Anonymous Coward]

The BOTS on Wall Street are owned by people with considerably more money so they are safe from any legal consequence.

Do a dutch auction

[davidwr]

Very-high-demand events should sell tickets by dutch auction.

At least this way, the promoters and others running the event - who are likely to plow some of their profits back into the business - keep most of "true" value of the ticket, not the scalpers.

Re:Do a dutch auction

[sunking2]

Farting under the covers is rude,

Re:How is this different from arbitrage on the NYS

[Anonymous Coward]

Good point. High Frequency Trading should be treated the same way. It won't be. But it should be.

HFC enhances market liquidity. Most forms of HFC reduce arbitrage across different markets. Sure, we could go back in time and use the Pony Express to deliver mail but what about progress?

Re:How is this different from arbitrage on the NYS

[MightyMartian]

I think we should look ahead to the day when anyone trying to game a stock market is taken outside, stripped naked, and their testicles are plugged into a car battery, but that's just me.

Fer crying out loud...

[psmoot]

Does Congress not have more important things to do than meddle in people buying and reselling products?

Tickets are scarce. Yesterday they were allocated to people with the most money. Today they're allocated to people with enough free time to hit F5 on the web site the day they go on sale.

People buy and mark up products all the time (that's what wholesalers, distributors, and retailers do all day). Why should we consider tickets any different? If you don't like markup going to resellers instead of artists, tell the artists to have more shows or set the initial price higher. It's a problem the artists and venues could solve all by themselves if they wanted to.

A possible solution?

[PhunkySchtuff]

A possible solution is to not ban sales to bots per-se, but instead verify that the identity of the person redeeming the ticket at the door is the same as the person who purchased the ticket (via verifying CC details, or even something as basic as their name).

If tickets have conditions on them that prevent their usage by anyone other than the person who originally bought them, then there can be no market for resold tickets. Let the scalpers buy as many tickets as they want, but eliminate the market for them to be resold.

Ticket Australia now state as part of their conditions of sale "This ticket may not, without the prior written consent of Ticketek or the Seller, be resold at a premium or used for advertising, promotion or other commercial purposes (including competitions and trade promotions) or to enhance the demand for other goods or services. If a ticket is sold or used in breach of this condition, the bearer of the ticket will be refused admission."

If you knowingly purchase a scalped ticket, you're taking a huge risk that you won't get in to the event.

Change how tickets are sold

[crow]

If the tickets are being sold for $60, but people are willing to pay $150, then why aren't they offered first for $150? I see the big problem being the middlemen sucking money out without adding value. Let the entertainers get that money.

If I were in charge of tickets for something like a pro sports team, the system I would use would be to put the tickets on sale at some ridiculous price, and announce that the price would drop 1% every four hours, or something like that. Then if you want the perfect seats and don't care that they're $1000, you can get your pick on the first day. Wait a few weeks, and they're $500. Wait until the day of the game, and anything left is $20. There's no need to set different prices on the better seats--they will sell earlier at a higher price.

A system like that would make scalping at a profit nearly impossible.

Just ban scalping...

[jonwil]

Make it illegal to re-sell tickets to an event for higher than face value.

Re:Just ban scalping...

[freeze128]

If this is already illegal, then why hasn't any authority cracked down on it? What more will this new law do that the existing one can't?

Re:How is this different from arbitrage on the NYS

[hawguy]

Because a bot buying stock doesn't prevent you from buying it as well?

Sure it does -- in the same way.

Bots buying tickets buy them to sell them at a higher price. Bots buying stocks buy them to sell them at a higher price. If you're unable or unwilling to pay that price, then you can't buy the ticket/stock.

Auction?

[CohibaVancouver]

Why surprises me is why popular events haven't moved to an auction system for tickets -

U2 is coming to town, tickets on sale by auction - They bid up to what the market will bear and (presumably) sell at a slower pace...

Re:How is this different from arbitrage on the NYS

[networkBoy]

saltwater whetted contact surface and a 12V DC car battery will do fine.

Ask me how I know... *ouch* (not the balls though)

Re:How is this different from arbitrage on the NYS

[Daemonik]

Oh would you shove it with the "liberals" nonsense. Conservatives game the government as much or more, you're just biased against noticing it.

The truth is that humans will game any system we design.

Re:How is this different from arbitrage on the NYS

[amicusNYCL]

The only "liquidity" that HFT "enhances" is in the bank account of the person controlling the software. It really is parasitic. It feeds off the system without adding anything to it. If I put in an order for a stock at $3 per share and some computer sitting between my broker and the exchange notices that the price is now $2.99 per share, and they buy the shares at $2.99 in order to sell to me at $3, that doesn't do anything except give money to the person who paid however much was required to have only a 3-meter cable between their computer and the trading computer. The people benefiting from the system have a wide range of words that they use to try to explain why it's actually a good thing that they're getting paid for not doing anything, but the reality is that the money belongs in the hands of the seller.

Re:How is this different from arbitrage on the NYS

[amicusNYCL]

Lucky for us, the BOTS on Wall Street failed to get their own BOT into the White House a month ago...

Right, yeah, the guy who lives in a gilded tower with his name on it in the middle of New York City is really going to stick it to all of those Wall Street people, isn't he? I mean, if there's one person who really understands the common people, it's a guy living in his own 200-meter tower who covers anything he can in gold.

Re:How is this different from arbitrage on the NYS

[lgw]

If the bot goes overboard it will get stuck with an overpriced stock. That's always been the risk market makers take.

Front-running is illegal, bot or not. Without illegal front-running, bots just increase liquidity through competition with each other. Providing liquidity is the way that market makers make a profit - they buy when no one else is willing to, then later sell when no one else is willing to, and make a profit off the sporadic timing in thinner markets - but the result is a better price for "real" buyers and sellers.

Primary sellers aren't incompentent

[virtig01]

Promoters and venue owners are professionals at selling tickets. Incompetence is not the cause for under-priced tickets. They intentionally set the ticket price below the market-clearing price to: 1) gain free promotion with shows that sell-out in minutes and 2) add an additional performances in the same city.

While it's possible that the initial demand was underestimated, promoters and venue owners largely know what they're doing.

Re:How is this different from arbitrage on the NYS

[silentcoder]

He's got TWO ex goldman sachs employees in his cabinet - INCLUDING the treasury secretary.

At least Clinton had been forced to make promises to the progressive wing of the democratic party to get the Sanders supporters on-board, which would have precluded her being that bad.
It doesn't MATTER whether you believe she would WANT to be. She wouldn't be ABLE to - because she had been forced to make promises against that, which she would have to keep if she wanted another term.

Trump on the other hand is sucking the wall street dong like no other president before ever has ! Hell his taxplan will give wallstreet moguls 6 trillion dollars - which you will have to make up with YOUR taxes.

Re:How is this different from arbitrage on the NYS

[cdrudge]

I fail to see how ticket-master can't spot individuals buying large quantities of tickets

Why on earth would they want to do that? They have zero incentive whether scalpers buy 100% of the tickets or normal fans do. They get their fee either way and fan outrage has no effect on them since the tickets are still being sold. They even have an incentive to sell to the scalpers to turn around and sell the tickets on their resale marketplace double dipping on tickets for increased profits.

Re: HFT algorithms only trade when its profitable.

[pnutjam]

Here's the real problem with HFT's.
There is too much money in the stock market, due to America's (GOP) insistence that we just dump everything in there and call in privatized, the long term low interest rates, and the general dominance of Finance in our economy.

Re:How is this different from arbitrage on the NYS

[pnutjam]

Hell his taxplan will give wallstreet moguls 6 trillion dollars - which you will have to make up with YOUR taxes.

Well, he could always just Bankrupt the government. That would insure his lasting legacy and be inline with his past "success". Take the money out of the company (gov) and leave so much debt that there's nothing left worth salvaging.
We can call this the Hostess method of governing.

Re: How is this different from arbitrage on the NY

[amicusNYCL]

No, the only difference is that some parasite in the middle got paid for not doing anything, when the person selling the shares should have gotten all of that money.