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Live Nation Entertainment's ticket resale may violate Ontario anti-scalping law

By Arragon Perrone

Event promotions giant Live Nation Entertainment may face steep fines after a possible violation of Ontario's anti-scalping law. On Feb. 13, tickets for Madonna's concert in Ottawa's Scotiabank Park were sold out within 21 minutes of being placed on-sale. On resale websites such as Kijiji.ca, however, tickets remained available. On Live Nation Entertainment's subsidiary site, VIPNation.com, Madonna fans could purchase a concert ticket for $1500 despite its $350 face value. Once the customer presses the button to purchase the tickets, users are rerouted to iloveallacess.com, which has a different URL, but displays VIP Nation in the top banner. There is no information on this page that discloses that VIP Nation is a subsidiary Live Nation Entertainment.

The Ticket Speculation Act of 1990 forbids ticket resale in Ontario for a price above face value. A 2010 amendment sets a maximum $5,000 fine for individual violators and a maximum $50,000 for corporations. Whether the maximum fines are to be implemented per ticket or in total remains unclear because of the bill's vague language and its limited enforcement history.

According to The Hollywood Reporter, Ontario's legislature first considered an amendment after TicketsNow, a subsidiary of Ticketmaster, inflated the ticket cost for an event featuring Canadian entertainer Leonard Cohen. A similar situation erupted with Ticketmaster over a Bruce Springsteen concert in 2009.

As the explanatory note that accompanies the legislation states, the legislation also prevents "related primary and secondary sellers," such as Ticketmaster and TicketsNow, to sell tickets to the same event. Enforcement power rests in Ontario's attorney general to exempt an individual or group from the legislation or to provide exempting circumstances.

When the bill was passed, politicians disagreed over the legislation's effectiveness. Then-attorney general Christopher Bentley, a member of the Liberal Party, supported the legislation. "We want to make sure consumers get a fair break, and the Ticket Speculation Act is important in that it's another step to protect consumers," Bentley told The Canadian Press. The New Democratic Party's caucus leader, Peter Kormos, remained skeptical about the bill's implementation. The transcript for the Standing Committee on Justice Policy's Dec. 1, 2010 meeting reveals Kormos's concern. The "Ticket Speculation Act itself permitted the prosecution of resellers of any sort, whether they're colluding with the primary seller or not," argued Kormos.

"For the life of me, this is Alice in Wonderland sort of stuff. You aren't prosecuting scalpers now even though the law — the existing law — gives you all the authority and power to prosecute all scalpers, whether they're related," Kormos added.

Greater transparency in the primary and secondary ticket markets has become a goal of Canadian provincial governments. Manitoba law now prevents tickets from being sold above face value. In October 2011, Quebec passed legislation requiring resellers to contact the event's promoter, venue or artist before offering the ticket at a price above face value.

Jon Potter, president of the Washington D.C.-based Fan Freedom Project, argues for greater transparency between sellers and fans. In June 2011, Potter told Billboard.biz that "fans are spending an extraordinary amount of money and time supporting artists and teams. If they're going to spend their morning sitting online trying to buy tickets only to have a sellout happen in 75 seconds and then be sent to the Ticketmaster-subsidiary secondary market to buy those tickets for four times markup; and then be told scalpers are screwing them only to learn in fact it's the artist manager or the venue or the ticket office that was really back-dooring the tickets… I think they have the right to the truth."

Promoters may purchase tickets themselves for inclusion in higher cost special packages. According to CTV News, buyers for Madonna's September performance were limited to eight tickets each, with the opportunity to purchase floor seats for $350.11 or distant seating for $45.11. Special packages included the $1250 Ultimate VIP Package offered a reserved front-row ticket, access to a pre-concert party and exclusive merchandise. A $675 party package included a seat within the first ten rows and otherwise identical perks.

Reacting to the Ontario case, TicketNetwork CEO Don Vaccaro warned against immediately blaming artists for possible law violations. "I'd be surprised if Madonna knew exactly what was going on with both the number of tickets being withheld and the disclosure to her fans," Vaccaro said.

Madonna's public relations contact, Liz Rosenberg did not respond to TicketNews' requests to comment on the situation.

TicketNews is a subsidiary of TicketNetwork, Inc.

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