Support HB 5108 - Michigan Ticket Fairness

Support HB 5108

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By Michael Shpunt, research director for Michigan Citizen Action

I had the chance today to testify in favor of HB 5108 before the House Committee on Criminal Justice on behalf of Michigan Citizen Action and the Michigan Ticket Fairness Coalition.

The current law bans selling tickets above face value unless the seller has a special agreement with the team, artist or venue. While that may have made sense in the 1930s when the bill was enacted, it makes little sense today. Instead, the current law ensures that companies like TicketMaster can control the market and drive up prices on their own through fees, price floors and a lack of competition.

HB 5108 will repeal that law, enabling you to sell your ticket at whatever price you wish.

While artists claim that scalpers will buy up all of the tickets before fans are able, the reality is that artists routinely sell tickets specifically to scalpers for a cut of the proceeds. How does that help fans?

Venues claim that scalpers will use bots to buy all of the tickets and drive up prices. The reality is that venues can already stop bots. They can put a stop to this practice through the use of Captcha (the “are you human” puzzle), address tracking, ticket limits and other tools.

Some in the industry claim that artists will not come to Michigan anymore if this bill is passed. If that were true, those same artists must also be avoiding Minnesota, Ohio and the dozens of other states that have removed caps on resale in recent years. We know for a fact that Kid Rock and Tom Waits have been to states with laws similar to HB 5108. In fact, you can still get tickets to see The Kid this May in Columbus.

Michigan citizens want – and deserve – the same rights afforded to them in other states: to sell their own tickets without fear of arrest. HB 5108 will ensure that consumers selling tickets in person have the same rights as those who sell tickets on the internet.

More than 1300 people have signed our change.org petition in support of fair ticketing laws in Michigan. If you’re a legislator, we’d be happy to put you in touch with someone from your district who wants this bill to pass.  

What is “fair value?” At minimum, it is the cost of the ticket, plus any taxes and fees paid.

When fans buy tickets online -- as most do -- there are usually fees associated with that purchase, which are not reflected in the face value price. The problem is, under current Michigan law, anyone wishing to resell their ticket must take a loss on these fees because they can only receive face value in exchange for their ticket.

A recent purchase of Red Wings tickets by a Michigan Citizen Action supporter perfectly illustrates the problem:

Two Red Wings tickets were purchased on the official NHL Ticket Exchange. These tickets were listed on the exchange for $40 each. Upon purchasing the tickets, an additional $10 service charge and $4.95 shipping and handling fee were added for a total cost of $94.95.

Red Wings Ticket Order Showing Sale Price of $94.95

Once the ticket purchase was processed, the buyer received an email that allowed him to download the tickets -- that’s right, download the tickets even though there is a shipping charge, which is an issue for another day.

Once the tickets were downloaded, this person found out that the face value listed on the ticket was only $27.00.Ticket showing face value: $27.00

So, if these were my tickets and I wanted to resell them to one of you right now, the most I could get for them without breaking state law would be $54.00 -- a $40 loss. Instead of protecting consumers, Michigan’s current law is robbing them. Situations like this are the reason the vast majority of states have abandoned ticket laws that cap ticket resale prices.NHL Ticket Exchange: Sold by Fans. Verified by TicketMaster.

In addition to bringing fairness to the secondary ticket market, House Bill 5108 would stop criminalizing normal consumer behavior.

Professor Mark Perry, an economist from U of M Flint, weighed in on this issue in the Detroit News on November 25 of last year.

He put it best, saying that the current law infringes on “a basic economic right — the right as buyers and sellers to engage in voluntary market transactions without unnecessary interference from the government.”

If the intent of the current law is to cap prices at face value, we believe many consumers are unaware of this prohibition. One only has to visit Craigslist, StubHub, Seat Geek or Ebay. These electronic transactions are not prosecuted, yet a fan trying to sell their tickets in-person for cost (face value plus fees paid) risks being arrested.

House Bill 5108 would bring ticket resale out of the shadows.

By opening up Michigan to a growing secondary ticket market, House Bill 5108 offers consumers choice and allows them to negotiate fair transactions through respected secondary sellers that offer consumers redress if they are unhappy with the business.

Websites like TicketsNow, TicketExchange and StubHub will all refund fans who unknowingly buy fraudulent tickets. House Bill 5108 would give consumers who buy and sell tickets face-to-face similar protections because they will also be conducting legal transactions.

And finally, House Bill 5108 would stop wasting law enforcement resources on enforcing an outdated law.

The current ticket resale law is routinely ignored, as evidenced by the thousands of fans who actively and voluntarily buy and sell tickets every day on the secondary market through websites and person-to-person. Michigan law enforcement officers have far more important things to worry about than consumers engaging in voluntary transactions that hurt no one.

In closing I would like to reiterate the fact that Michigan’s current ticket resale law needs to be repealed. The current law ignores normal consumer behavior, blocks fans from recouping the full costs of their purchase and forces sales into the shadows where there are zero consumer protections.

Please tell your legislator to support HB 5108.

Michael Shpunt serves as research director for Michigan Citizen Action. He is also studying law at the Michigan State University College of Law.

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