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Tuesday, November 24, 2009

Saskatchewan’s anti-scalping legislation an attack on free markets

In Defending the Undefendable, libertarian author Dr. Walter Block includes a chapter in his book dedicated to defending ticket scalpers. You can listen to a reading of this chapter below the fold.

A defence of ticket scalpers is needed now in Saskatchewan, as Justice Minister and Attorney General Don Morgan has introduced needless and intrusive legislation today to shut down the secondary market in event tickets, a practice known as scalping. The Ticket Sales Act will:

...prohibit the primary seller from having links on their website to reseller websites, prohibit secondary ticket sellers from selling tickets to an event that are primarily being sold by a company legally associated with them and prohibit advertising the sale of tickets by a reseller until 48 hours after the tickets go on sale to the public. The Act also makes it illegal to use computer software to automatically buy tickets. The accompanying regulations will contain reporting requirements to allow the Minister of Justice to get information from venues about the numbers of tickets that were available for public sale.

Calls to expand the power and scope of government, and to limit commercial freedom, should always be treated with scepticism, but this legislation is particularly offensive given the important role ticket resellers play in the market.

In an article published in The Freeman, William Peterson provides a defence of ticket reselling using the case of the Broadway hit The Producers. (Scalping is illegal in New York.) Peterson answers the question “What’s wrong with scalping?” below:

Nothing really. It’s simply an aspect of our market, or voluntary-exchange system. A hit’s a hit, and The Producers is a super hit. Supply and demand are at work, with here a daily fixed supply of tickets at set prices. It’s that fixed supply and those set prices that change things. Prices ration goods and services, as almost everybody knows. When demand is off, producers can cut prices, as attested by that same-day discount ticket pavilion in the middle of Times Square. But when demand is red-hot, as with The Producers, in come, at least until recently, the scalpers to collect what the market -- that is, the buyers -- will bear. They perform a service by saving time for those anxious to see the show without standing in long lines to do so. For isn’t the scalper but a middleman performing a valued service, despite his putdown name and often illegal but not necessarily evil status? Scalpers convert time cost into money cost for those who buy tickets from them. Outlawing scalping favors those with time to spare over those with money to spare. Why should the government take sides?

Once this legislation passes, scalpers who continue to bravely serve those consumers with “money to spare” could face fines as high as $500,000 and up to a year in jail.

Learn more about scalping and Dr. Walter Block by purchasing one of his books below.

Posted by Matthew Johnston on November 24, 2009 | Permalink


There is just no end to government meddling. These people supply something that others want and are willing to purchase knowing the increase in cost. No one is forced to buy, but now we have big brother getting involved.

Posted by: Alain | 2009-11-24 3:21:30 PM

Ahhh... the gift that keeps on giving: fairweather conservatism.

"We're for freedom!" -- except in the following cases: privacy, drug use, bad words on the airwaves, sexuality, immigration, prostitution, pornography, and really anything we decide we don't like as we go along.

Posted by: Mike Brock | 2009-11-24 3:38:24 PM

"Once this legislation passes, scalpers who continue to bravely serve those consumers with “money to spare” could face fines as high as $500,000 and up to a year in jail."

In which case those who are still willing to scalp tickets will simply raise their prices to compensate for the added risks (fines and jailtime). And once again, the public will lose while being told that it's for their own good.

Posted by: Charles | 2009-11-24 3:39:44 PM


Of course the government should not be outlawing scalping, but ... the more interesting case to consider is what steps they should take if a show promoter sells tickets on the basis that they may not be resold.

Suppose there is a big concert at Taylor Field and the promoter sells tickets on the condition that purchasers not re-sell them. That is a legitimate restriction that a property owner can impose as a condition of the transaction. But in the event that ticket buyers attempt to re-sell tickets, is it legitimate for the government to take the steps listed above to go after scalpers? Or should it be just a civil matter requiring the promoter to go after each re-seller individually? Probably the latter.

How about if the promoter "sells" tickets on this basis: he sells you the right to have possession of the ticker and to use it for admittance to the event, but does not grant you ownership of the ticket itself. Thus if you "re-sell" the ticket it is, in effect, to steal it from the promoter. Could then the government go after such re-sellers on grounds that they are criminals who have stolen the ticket? Probably so.

In the end, whether or not tickets can be re-sold is a question for the original owner of them (typically, an event promoter) to establish. It would be easy to structure tickets sales to make re-selling illegal and illegitimate if they want to do that. If they have done that, then it is ok for the government to go after scalpers, like any other violators of property rights.

Posted by: Fact Check | 2009-11-24 4:32:10 PM

Very interesting point, Fact Check. I generally support restrictive covenants, but do you think it's practical for ticket sellers to prohibit reselling?

If I purchase tickets for four friends am I not reselling? If one friend bails, should I not be able to find another buyer? I'm sure ticket sellers would not want to prohibit this practice, but it would be their right...I think.

Posted by: Matthew Johnston | 2009-11-24 4:40:30 PM

Fact Check,

I am not supportive of such arrangements insofar as they are implicit contracts (ie. fine print written on the ticket). There's quite a bit of case law on the very principle you've outlined, dating all the way back to the 19th century.

In the 19th century, booksellers and newspapers started the habit of writing in them implicit contracts that stated that the only person entitled to read them where the initial buyer. That, if you read the book, and then lent it to your friend, you were violating the license terms for sale of the book. Essentially, the booksellers were saying that everyone who wants to read a book has to buy their own book--book borrowing is a crime.

The courts, as we can all guess, rejected the booksellers rights to impose such restrictions, and we all lend each other our books and newspapers today without feeling like we're stealing intellectual property.

Microsoft tried the same thing with it's end user license agreements (EULA) with Windows, suggesting that Windows licenses are non-transferrable from one computer to another. Hence, once you buy a $300 copy of Windows, you may not uninstall it on one computer and install it on another. Rather, the license is tied to that single computer in perpetuity.

The courts rejected this argument again, overriding Microsoft's assertion that a license is tied to the computer, instead of to a single concurrent user. The court ruled that Microsoft may only hide behind copyright law insofar as Microsoft can reasonably expect no more than one licensed copy of Windows to be in use at one time. But that, if a user uninstalls Windows from one machine and in turn, installs it onto another machine, no "theft" has taken place, as much as software companies would like to have be the case.

This is sort of a similar case in that, someone is trying to say that they can sell something indiscriminately, without a signed contract, that can implicitly enjoin someone into a contract that prohibits them from reselling the item.

The concept of a non-transferrable good seems fishy to me, in any case. I would say, that the ticket issuer has the right to deny entry to their venue to anyone--including ticket holders--and if they had some way of determining a ticket was scalped, they could simply prevent these people from getting in at the door. In which case, the problem would be between the purchaser of the scalped ticket and the ticket scalper.

Posted by: Mike Brock | 2009-11-24 5:27:48 PM


"If I purchase tickets for four friends am I not reselling? If one friend bails, should I not be able to find another buyer?"

It reminds me of many many years ago when the "any reproduction, in whole or in part, without the expressed written permission of Major League Baseball..." disclaimer was first introduced. That restriction seemed, in effect, to make it illegal to use your VCR to rape a game and lend it to a friend. In practice, such sharing was never stopped and only people trying to sell tapes of games were meant to be targeted.

But in the case of pay cable channels (like HBO) that depend on subscribers for revenue, there would seem to have been a more legitimate interest in stopping pre-Internet "file sharing".

In short, I can see a promoter saying "no resales" and not worrying about buddy substitutions while trying to go after scalpers.



[6 pghs of legal history]

Fascinating, but beside the point. What the law has said and what it should have said are different things. I am talking about the latter. If the former is the discussion, then Saskatchewan is outlawing scalping. End of discussion.

"The concept of a non-transferrable good seems fishy to me, in any case."

Why? And how is barring people at the door who have a ticket any different? The simple fact is if I offer you a ticket on the condition that you not transfer it, you can either agree to the condition or pass on the offer. There is nothing illegitimate about my stipulation. If you don't like it, then don't buy my tickets.

Posted by: Fact Check | 2009-11-24 6:02:30 PM

Why spell check is not sufficient. Exhibit A:

"...use your VCR to rape a game..."


Posted by: Fact Check | 2009-11-24 6:04:37 PM

It's a fascinating discussion.

Libertarians often point to restrictive covenants as a way to privately address concerns about "community standards" without relying on government regulations to set and enforce standards.

Yet libertarians are often uncomfortable with restrictions on the use of property, even when these restrictions are contractually determined.

Since property rights are a bundle of rights, perhaps certain restrictions on the peaceful use of property can be established privately without eliminating one's general right to property.

Having said that, I tend to agree with much of what Mike has to say about intellectual property, and think those insights apply here.

Posted by: Matthew Johnston | 2009-11-24 6:38:00 PM

And, although your television has no rights, basic decency requires your intervention here, FC.

Posted by: Matthew Johnston | 2009-11-24 6:46:00 PM

Yeah, more government, that's the ticket.

Posted by: Dana | 2009-11-24 7:06:30 PM

Fuck scalpers, those scummy bastards scoop up all the tickets and the shows are sold out before the fans can get hold of a ticket. Then the rich pricks get to buy them up at their convenience or fans who really want to see their favorite bands get raped on the cost of a concert ticket. I can't beleive everyone is sticking up for these pricks. I rarely condone state interference but scalpers can kiss my ass, they get ZERO sympathy.

Posted by: DrGreenthumb | 2009-11-24 7:54:19 PM

The article asks the question: "Why should the government take sides?" Exactly.
When will the scalpers themselves rise up, form unions, and lobby the government against such predatory practices? When will political parties represent their concerns come election season? Why isn't the Human Rights commission on this ?! Venues and event organizers should be held accountable no?

Posted by: cid the cidious | 2009-11-24 9:21:27 PM


Quite the rant. I now understand why you're an NDP supporter. Unfortunately, property rights transcend your apparent hate for the rich.

Posted by: Charles | 2009-11-25 5:29:19 AM

Ever notice that the government outlaws anything they can't get revenue from. When will the government learn it can't legislate morality. This includes prostitution. The only reason it's illegal is that the government doesn't get a cut. Let see if the government has the balls to make alcohol or cigarettes illegal. politicians jobs are to win elections. And if the party you voted for is in control you have no right to complain. (This is for all you right-wing and left-wing nutbars out there. You know who you are.)

Posted by: Doug Gilchrist | 2009-11-25 6:51:41 AM

"And if the party you voted for is in control you have no right to complain."

Heh. I haven't voted in the last 3 (4?) elections. I refuse to choose between parties which will violate most (if not all) of my civil rights.

Posted by: Charles | 2009-11-25 7:01:29 AM

What I find troubling, DGT, is not that you disagree with my post but that you ignored every arguement presented in defence of scalping.

You are asking conservative WS readers to support the repeal of marijuana prohibition. If you expect them to extend freedom to people and activities they don't like, you should do the same -- or at least provide a rigourous defence of the prohbitions you support. And not liking rich people is not enough, especially given that scalpers are often low income people trying to earn extra money.

Posted by: Matthew Johnston | 2009-11-25 8:56:26 AM

Chapter 12. Webster's Dictionary.......

This is annoying. Whenever you go to the WS blog you have to listen to this.

Posted by: The Stig | 2009-11-25 9:10:50 AM

I suspect those against this legislation are simply posting for scummy outfits like dashtours that rob the unsuspecting public blind. This legislation is needed in sk. desperately.

Posted by: pepsialex | 2009-11-25 12:00:46 PM

Mathew, I support your positions 90% of the time, I cannot support ticket scalpers though, I think they are scum. I support everyone's right to be able to aquire property, just not the right to aquire ALL the property so they can inflate the price of that property and prevent other people from enjoying it.

Hypothetical example: I support everyone right to own cannabis, but if some people decided to buy up ALL the available supply and then price it out of reach of a lot of the people who wanted to buy it and thereby deny those other's the right to own it I would not support those actions.

Its not that I dislike rich people, I like many of them and am by no means "poor" myself. What pisses me off is people who by actions like these deny other people the opportunity to enjoy all that life has to offer.
It is bullshit than when a good concert comes into town it sells out within a few minutes, and then fans who want to see the bands they love are forced to pay 10 times the ticket price to some asshole who has bought up 100 of the best tickets.

Posted by: DrGreenthumb | 2009-11-25 12:23:09 PM

"What pisses me off is people who by actions like these deny other people the opportunity to enjoy all that life has to offer."

But scalpers create opportunities for those who don't have time to wait in lines, and who are willing to pay more to enjoy all that life has to offer.

Have you listened to the entire audio file?

Posted by: Matthew Johnston | 2009-11-25 12:28:13 PM

I havn't listened to the audio file at all actually, but waiting in line for a concert these days is pointless because the scalpers buy up all the tickets online before the fans in line can even get one. Who doesn't have the time to go to the website and click "find tickets"?

Then even though tickets sell out in a metter of minutes, they are available for months later at hugely inflated prices from assholes who scooped them all up to sell to eliteists who can afford to pay the ridiculous markup.

Scalpers are rip-off artists plain and simple.

Posted by: DrGreenthumb | 2009-11-25 12:40:58 PM

Would people accept if someone stood outside a restaurant, paid the restaurateur and bought all the food, then insisted incoming patrons pay a ridiculously marked-up price? That's scalping. I'd go somewhere else. Good thing is. There are options.

Posted by: Ty Garfield | 2009-11-25 2:59:29 PM

While certain restaurants already do that on 31 December, for private parties, there are plenty of options, like you say. But there is no substitute for your favourite performer.

Posted by: Nothing New Under the Sun | 2009-11-26 6:25:21 AM

I see that Typepad is posting my email auto-rely. Interesting feature.

Posted by: Matthew Johnston | 2009-11-26 10:52:37 AM

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