Among the first things any ticket broker should do when developing or expanding their business is to hire an attorney to help them navigate the choppy waters of commerce, according to panelists during a discussion on tickets and the law at Ticket Summit 2008 in Las Vegas over the weekend.
As the ticket industry evolves, especially throughout the secondary ticket market, dealing with legal issues is becoming more time-consuming and complicated, particularly where the Internet is involved.
“The public has no idea what you all do,” Pittsburgh attorney Rob Peirce told the audience of the brokers and ticket executives. Peirce is representing litigants in a class action lawsuit against the Miley Cyrus fan club for allegedly misleading fans into thinking they would have better access to tickets if they joined the club for $30. “So, when something like the Hannah Montana/Miley Cyrus thing occurs, people start looking at changing laws.”
Peirce and others said that hiring a lawyer upfront “probably won’t cost as much as you think,” and it can offer a line of protection against the unforeseen. For example, if a person in Montana or the Virgin Islands or someplace buys a ticket from a broker in Pittsburgh to attend a show in Pittsburgh, Peirce said, and something goes wrong, the broker could face a lawsuit in Montana or the Virgin Islands without knowing it.
“Make sure you have a disclaimer on your Web site that buyers are subject to the laws of your state,” Peirce said.
Braden Cox, policy counsel at e-commerce advocate NetChoice, said that while price caps on the resale of tickets are falling, taxes and venues trying to control their own ticketing will likely rise over the next several years.
Besides helping brokers with consumer protection laws and state laws as it relates to ticket reselling, attorneys can also assist with tax laws pertaining to Internet commerce. Andra Mazur, senior counsel for TicketNetwork, hosts of Ticket Summit, said that several states are considering law changes in the wake of the Hannah Montana ticket mess, and that some jurisdictions are also contemplating new taxes, similar to what the State of Texas and the City of Chicago currently charge for resold tickets. The Chicago amusement tax law has been challenged by StubHub and others.
“Generally, whoever is taking in the money is responsible for collecting taxes on the sale for transactions involving Texas and Chicago,” Mazur said, adding that the “physical nexus” of where a broker is located is key in other tax issues.
Mazur also cautioned brokers to be on the lookout for laws prohibiting the use of “software bots,” in the wake of the Ticketmaster judgment against RMG Technologies.