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Minnesota paperless ticket bill hits snag in legislature

By Alfred Branch Jr.

A proposal to regulate restrictive paperless ticketing in Minnesota, which had received overwhelming support from the state Senate Commerce and Consumer Protection Committee in March, was referred back to that committee this week for additional work.

The state Senate Judiciary and Public Safety Committee voted unanimously Wednesday night, March 4, to send the bill, SF 425, back to the Commerce Committee in part because legislators wanted language in the proposal to better protect consumers from "software bots." The computer programs, which are already illegal in several states including Minnesota, can surreptitiously procure large blocks of tickets quickly by bypassing internet security protocols.

The current proposal does not contain specific language outlawing the use of software bots, because other legislation in the state does, but legislators heard testimony Wednesday that such applications are still being used, and they want the Commerce Committee to take another crack at addressing that issue.

"This seems to be a bill that just isn't ready," said state Sen. Scott Newman during the hearing. Like other members of the Judiciary Committee, he harbored concerns. "I'm not convinced we're going to accomplish anything good with this bill."

A time frame for when the bill would be discussed again by the Commerce Committee was not disclosed.

In addition to the bot issue, Judiciary Committee members also expressed concerns over the often debated issue of whether an event ticket is a bearer instrument — or tangible good — or a simple lease instrument that the issuer essentially still has rights to.

The Xcel Energy Center, Target Center, Minnesota Twins and other opponents of the bill believe they have a right to use restrictive paperless tickets as they see fit, which is mainly to stop the resale of tickets or only allow resale on their terms. They believe that by doing so they are protecting consumers who want to buy tickets at face value from resellers who often charge a premium for resold tickets.

"The use of non-transferable tickets is an attempt to try to limit a scalper's ability to jump in and gobble up a lot of tickets and resell them at way above face value," said Rich Forschler, a lobbyist for the Minnesota Wild and other ticketing concerns. "These fans are customers of all these [teams, venues and artists], so we don't want to impose a technology or restriction that they don't like or they don't want."

Dave St. Peter, president of the Twins, said the popular baseball team has no immediate plans to offer paperless ticketing, but he opposes the bill because it would potentially limit the team's, and other venues' and artists', options on dealing with scalpers.

"This bill is providing a solution for a problem that doesn't exist, and essentially enhances the bottom line of out-of-state scalpers to the detriment of Minnesota consumers and baseball fans," St. Peter said.

Twins season ticket holder, and Winona State University economics professor, Don Salyards told the committee that he supports the proposed legislation because it will help ensure that the resale ticket industry remains a free, open marketplace in the state.

"As an economist, it's obvious to me that this debate is not between fans and scalpers, but between the free market and monopolistic control of an otherwise competitive ticket resale market," Salyards said, adding that he has been offended by how Twins executives have negatively referred to him and other season ticket holders who want to keep the right to do as they please with their tickets.

"We are resellers of the ticket property rights that we paid for, plain and simple," he said. "Both in economic theory and in practice, free markets always make more product available to consumers than monopolistic market structures."

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