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New York ticket resale law extension is the subject of negotiations

By Alfred Branch Jr.

The issue of whether to add language to New York State's ticket resale law, which would require paperless tickets to be transferable across all platforms, is currently being discussed by legislators.

Whether such language will be added, which would help protect consumers and ticket brokers, is unknown, but the issue has created a situation in which the result could have wide-ranging effects on the ticketing industry and the business models of several of the market's biggest players.

In 2007, New York State was the first state to create a law that protected consumers from allowing operators of venues and local teams to punish their fans by revoking their tickets if they were resold through outlets other then the venues or teams. But, the legislature wrote the law with a sunset provision, which requires it to be extended every two years; in 2009, Gov. David Paterson extended it for one year while the legislature commissioned a study on the secondary ticket market. That study was completed by the New York Department of State and concluded the existing law was beneficial to consumers. This bill is set to expire on Saturday, May 15.

If the current law is not extended, starting May 16, New York would revert back to being a tough anti-scalping state that prohibits the resale of tickets above $2, a move that could render virtually all secondary ticket market transactions in the state illegal. For example, StubHub's fan-to-fan marketplace deal with Major League Baseball would technically be illegal, as would Ticketmaster's TicketExchange deals with the National Basketball Association, the National Hockey League, and the National Football League. In addition, Ticketmaster and its parent company Live Nation Entertainment own the secondary ticket company TicketsNow, which also could be adversely affected.

A spokesperson from Gov. Paterson's office told TicketNews that the governor needs bills to come out of the state Senate and Assembly before he could sign it. The spokesperson said the governor did not have a comment about the bill or the issue of ticket resale.

Because Ticketmaster has so much invested in the secondary ticket market, it would likely prefer that the current law be extended, but without provisions that would require paperless tickets to be transferable across multiple platforms. Such a requirement, which is currently not in the extension proposal, would protect consumers and brokers by forcing Ticketmaster to open its proprietary paperless ticketing system.

The current extension proposal is also for another year, and it calls for a ban on software "bots," which are computer programs that some brokers have used to surreptitiously procure large blocks of tickets from Ticketmaster or other primary ticket sellers by maneuvering around Internet security protocols.

State Sen. Craig Johnson, who sponsored the extension bill, S6444A, could not be reached for comment. Assemblyman Steve Engelbright also is working on an extension bill, A10769B, and he, too, could not be reached for comment. Legislators and Gov. Paterson's office are expected to continue negotiating on the issue this week.

"The last time they extended it, they missed it by a few days," Elizabeth Nostrand, spokesperson for Sen. Johnson's office, told TicketNews, adding that if that happens again, the legislature will likely write in retroactive language. She declined to comment on the specific negotiations surrounding the bills.

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