Check state, local laws on legality of marking up event tickets

By Mark Pestronk
Mark PestronkQ: I know that ticket scalping is sometimes against the law, so I wonder whether we can legally package a ticket for a pro football game or Broadway show along with an airline ticket and a hotel stay and then mark up the package. If we can't sell our packages, can we mark up and sell just the tickets by themselves? If we procure our tickets from an online ticket broker that is legally allowed to sell them, are we exempt from having to get our own ticket broker license when we mark them up? If such sales are illegal, can we at least sell another broker's tickets and collect a commission on the sale?

A:
There is no federal law against scalping or marking up event tickets, but 29 of the 50 states prohibit or regulate ticket brokering or scalping, which are synonyms in legal terminology. No two states have the same law, and many of those laws have recently undergone liberalization or repeal, so what was illegal in your state five years ago might well be legal now.

To complicate the legal framework, you have to be concerned not only about your agency's state law but also about the laws of the state where the event is taking place. For example, if your agency is in California and you mark up tickets to a show on Broadway, New York's law might require you to register there before you sell the tickets, even though California's law does not.

I could not find any summary of each state's law that was less than about 5 years old. The most recent one is here.  

One more complication is that some cities, such as Atlanta and Seattle, have their own ticket-broker laws that are stricter than their states' laws. In addition, some laws prohibit markups on sports events but not on any other types of entertainment.

Finally, you also need to consider the applicable jurisdictions' enforcement policy: What is prohibited on the books of the law might be permitted or even encouraged in practice, just as is the case with rebating on international airline tickets.

Notwithstanding these complications, it is probably safe to say that the laws do not apply to marked-up travel packages that include event tickets. Even if they did, you could probably deflect any prosecution by arguing that the Airline Deregulation Act pre-empts state enforcement of packages that include air travel.

However, if your packages do not sell well, you can't mark up and resell the tickets by themselves without taking into consideration the laws of your state and the event's state. If you live in a state where all markups are illegal and the law is enforced, you could be fined or even jailed for ticket scalping.

If you mark up tickets after buying them from a ticket broker that is authorized to sell them, you are not exempt just because the broker is authorized, so the same anti-scalping laws would apply to you as if you were buying them directly from the event sponsor.

On the other hand, there is no law against earning a commission on the sale of event tickets, so when in doubt, buy the event tickets on a commissionable basis rather than a net basis.

Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at mark@pestronk.com. 
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