After two years of progress in adopting favorable ticket resale laws, several states are again taking a hard look at the issue and are...

After two years of progress in adopting favorable ticket resale laws, several states are again taking a hard look at the issue and are considering reforms that could significantly impact ticket brokers.

In some instances, the various moves came in the aftermath of the Hannah Montana ticketing controversy, but now state legislatures are again studying the issue in light of the problems associated with Bruce Springsteen tickets, which led to a settlement with New Jersey, and the proposed merger of Ticketmaster Entertainment and Live Nation.

The merger in particular, which is being investigated by federal regulators, has helped cast undue suspicion on the secondary market due to statements made by both Ticketmaster Entertainment CEO Irving Azoff and Live Nation President and CEO Michael Rapino, both of whom have blasted the secondary market partly in hopes of getting their merger approved.

Five states in particular are leading the charge in changing or adding new legislation on the ticketing front, and all of them could be influential. The states are Minnesota, Florida, New York, North Carolina and Massachusetts, and in all instances the proposed bills are in various committees for further review.
The moves of these and other states are in addition to the proposed federal bill that New York Sen. Charles Schumer is also planning to introduce that calls for a two-day waiting period for brokers and ticket resellers.

In Minnesota, which began allowing ticket resale in 2007, state legislators are looking to stop what they call “unfair” internet sales, where consumers are redirected from a primary site, such as Ticketmaster, to a secondary site, such as Ticketmaster’s TicketsNow subsidiary. That type of practice was the chief complaint in the Springsteen case that led to Ticketmaster settling with New Jersey, even though the company did not admit any wrongdoing. In addition, the state is considering taxing internet sales, which several other states are also discussing.

Florida is seeking more transparency in the primary ticketing process, namely the disclosure of how many tickets are available, but the state is also considering eliminating the resale of tickets above $1 over face value, if the tickets are for or benefitting a charity. In addition, the state is also looking at prohibiting ticket presales, similar to what Arkansas has done recently to stop the sale of speculative tickets.

As for New York, the state almost added a 4 percent tax on tickets but removed it from the governor’s budget, but it is looking at requiring 7 percent of all sports tickets be affordable.

In North Carolina, state officials are looking at imposing a “privilege license tax” on gross receipts of ticket sales over the internet that exceed face value, in addition to also imposing a remote internet tax on brokers and companies that do business in the state through resident employees or other independent contractors, agents or representatives.

Finally, in Massachusetts, which came close to dropping its prohibition on ticket resale until a lobbying scandal derailed it, is now looking at imposing a 2.5 percent tax on sports tickets, and it is also considering requiring ticket brokers obtain licenses and offer generous refund policies in light of event cancellations or ticketing problems. The state is also studying whether to prohibit the resale of tickets above 50 percent of face value.