This story was updated on July 6, 2010, at 6:25 p.m. EDT to include a comment from Sam Gerace, CEO of Veritix. On Friday,...

This story was updated on July 6, 2010, at 6:25 p.m. EDT to include a comment from Sam Gerace, CEO of Veritix.

On Friday, July 2, New York Gov. David Paterson signed into law the country’s first ticket resale regulations that address paperless tickets, a move that potentially sets the stage for other states to also adopt similar laws addressing the new ticketing technology.

The New York ticket resale law was designed to protect consumers by calling for ticket companies, artists, teams and venues to offer consumers the choice of traditional tickets in addition to paperless tickets, if the paperless tickets are part of a closed, proprietary system. Paperless tickets are not banned in the state, but they must be among the offerings listed at check out when a fan purchases a ticket, and all of those ticket options are to cost the same amount. The law took effect immediately, and it must come up for a legislative vote again in May of 2011.

Live Nation Entertainment, and its Ticketmaster division, have invested heavily in paperless ticket technology in recent years, in part because the company argues that it offers convenience and protection from fraud. Paperless tickets also gives the company and its ticketing clients more control over how those tickets are distributed, and they can be used to potentially cut out the secondary ticket market, thwarting fans’ ability to resell or transfer them.

Jeff Pearlman, assistant counsel to Gov. Paterson who worked on the legislation, told TicketNews that state officials were aware that they were breaking new ground with the law and wanted to make sure that it did not stop the advancement of the technology.

“We tried to craft the law in a way to allow for new technologies to emerge and thrive. We didn’t want to say no to paperless tickets, because we know it is a developing, new technology, but we wrote the law as a potential model for other states,” Pearlman said.

Currently, New Jersey is the only other state considering new paperless ticket legislation, but Minnesota also has a pending ticket resale law that could be amended to include paperless ticket regulation.

“We are extremely pleased that the legislators in New York have seen fit to preserve consumer choice in the secondary market,” Glenn Lehrman, spokesperson for StubHub, said in a statement. StubHub has long advocated for the transferability of paperless tickets. “We firmly believe that consumers should have the right to legally resell any ticket in an open and unrestricted marketplace. It is our hope that other states will follow New York’s lead.”

Sam Gerace, CEO of digital ticketing company Veritix, said in a statement to TicketNews that the company’s technology fits well with New York’s new law. The company draws distinct differences between its paperless ticketing product and that of Ticketmaster, because the Veritix is easily transferable.

“The Veritix system is built on advanced consumer technology. It will allow operators in any state to give their fans maximum flexibility and convenience while remaining in compliance with state regulations,” Gerace said, adding that Veritix is unaware of any other states currently considering similar legislation. “Our system today is fully capable of supporting operators in their ability to comply with the recently enacted legislation in New York.”

When asked for a comment about the new law, Linda Bandov, spokesperson for Live Nation Entertainment, told TicketNews that she would discuss the matter with the company’s ticketing executives, but she added that the company typically does not comment publicly on such matters.

“This was a necessary measure to take,” Gary Adler, legal counsel for the National Association of Ticket Brokers (NATB), told TicketNews, adding that the NATB is very pleased by the new law. “Paperless ticketing can be used to thwart the secondary ticket market, which is contrary to the trend toward free markets over the past several years.”

Adler continued, “Nobody is banning paperless tickets, and in fact, those who argued against the legislation, including the New York Yankees, were saying they supported ticket transferability. What this law provides is great ammunition to ensure the means to eliminate this technology from being used to limit consumers’ choice.”