However, the  Federal Trade Commission Act prohibits unfair or deceptive acts or  practices in or affecting commerce, and FTC can enforce the act for  issues related to event ticketing and ticketing companies. For example, some  states restrict the use of bots, several other states impose price caps (or  upper limits) on ticket resale prices, and states including Connecticut,  New York, and Virginia restrict the use of nontransferable tickets (tickets  with terms that do not allow resale). Many tickets are resold on the secondary market,  typically at a higher price. Among a nongeneralizable sample of events  we reviewed, we observed that primary and secondary market ticketing  companies charged total fees averaging 27 percent and 31 percent,  respectively, of the ticket’s price. Affordability. Tickets to Popular Events Are Often Resold on the Secondary Market at Prices above Face Value

Ticket resale prices can be significantly higher than primary market prices  and brokers account for most sales on major ticket exchanges. Primary ticketing companies have also entered the resale market. However, as discussed later, it is possible that some  consumers buy on the secondary market, at a higher price, because they  are not aware that they are purchasing from a resale site rather than the  primary seller. We conducted our own review of ticketing fees for a nongeneralizable  sample of a total of 31 concert, theater, and sporting events across five  primary ticket sellers’ websites:  In total, the combined fees averaged 27 percent of the ticket’s face  value, and we observed values ranging from 13 percent to 58  percent. Consumer Protection Concerns Include the Ability to Access Face-Value Tickets and the Fees and Clarity of Some Resale Websites

The technology and other resources of professional brokers give them a  competitive advantage over individual consumers in purchasing tickets at  their face-value price. Many ticketing websites we reviewed  did not clearly display their fees up front, and a subset of websites— referred to as white-label—used marketing practices that might confuse  consumers. Some Ticketing Websites We Reviewed Were Not Fully Transparent about Ticket Fees and Relevant Disclosures

Among the largest primary and several secondary market ticketing  companies, we identified instances in which fee information was not fully  transparent. White-label  websites often market themselves through paid advertising on Internet  search engines, appearing at the top of search results for venues. In addition, consumers who are led to  believe that white-label ticketing sites are the official venue site may  accept high fees because they think they are buying tickets from the  primary ticketing provider, according to two industry representatives with  whom we spoke. They are most commonly used in major league  sports. Effects of Ticket Resale Restrictions and Disclosures on Consumers and Business Would Vary

Policymakers, consumer organizations, and industry participants have  proposed or implemented a number of ticket resale restrictions and  disclosure requirements, each of which have or would have advantages  and disadvantages for consumers or industry participants (see table 5). Event ticketing is not federally regulated and some industry participants  are using or exploring technology and other market-based approaches to  address concerns related to secondary market activity. As described earlier,  markups on the secondary market can be substantial. The New York State Attorney General’s report stated that  nontransferable paperless tickets “appear to be one of the few measures  to have any clear effect in reducing the excessive prices charged on the  secondary markets and increasing the odds of fans buying tickets at face  value.” But, while we identified evidence that nontransferable tickets  limit resale, they may not eliminate resale because sellers may not follow  the restriction. Inconvenience. Effect on competition. However, three government studies we reviewed stated that price caps  are difficult to enforce and are rarely complied with. For example, as noted earlier, FTC staff have  raised concerns about mandatory “resort fees” charged by many hotels  but not immediately disclosed (such as in online price search results). Delivery delays can inhibit resale  activity because they give brokers less time to buy and resell tickets,  and allow primary ticket sellers to review whether brokers and bots  made bulk purchases, according to some promoters and primary  ticket sellers. At least one major ticket company has a  program to sell tickets to pre-approved “verified fans,” to help ensure  that more consumers and fewer brokers can access tickets on the  primary market. Google said in a statement that these measures were intended to protect  customers from scams and prevent potential confusion. Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to examine (1) what is known about  primary and secondary online ticket sales, (2) the consumer protection  concerns that exist related to online ticket sales, and (3) potential  advantages and disadvantages of selected approaches to address these  concerns. The scope of our work generally focused on ticketing for large  concert, theater, and sporting events for which there is a resale market.
Why GAO Did This Study

Tickets for concerts, theater, and sporting events can be purchased—typically online—from the original seller (primary market) or a reseller (secondary market). Some state and federal officials and others have raised issues about ticketing fees, the effect of the secondary market on ticket prices, and the transparency and business practices of some industry participants. Event ticketing is not federally regulated. However, federal legislation enacted in 2016 restricts bots (ticket-buying software). Also, the Federal Trade Commission (FTC) has taken two enforcement actions related to deceptive marketing by ticket sellers under its broad FTC Act authority.
GAO was asked to review issues around online ticket sales. This report examines (1) what is known about online ticket sales, (2) consumer protection issues related to such sales, and (3) potential advantages and disadvantages of selected approaches to address these issues.
GAO focused on concert, theater, and major league sporting events for which there is a resale market. GAO analyzed data on fees, ticket volume, and resale prices from a variety of sources; reviewed the largest ticket sellers' websites and purchase processes; and reviewed federal and state laws and relevant academic literature. GAO also interviewed and reviewed documentation from government agencies; consumer organizations; ticket sellers; venue operators; promoters and managers; sports leagues; and academics (selected for their experience and to provide a range of perspectives).

What GAO Found

Ticket pricing, resale activity, and fees for events vary. Tickets to popular events sold on the primary market sometimes are priced below the market price, partly because performers want to make tickets affordable and maintain fans' goodwill, according to industry representatives. Tickets are often resold on the secondary market at prices above face value. In a nongeneralizable sample of events GAO reviewed, primary and secondary market ticketing companies charged total fees averaging 27 percent and 31 percent, respectively, of the ticket's price.
Consumer protection issues include difficulty buying tickets at face value and the fees and marketing practices of some market participants.
Professional resellers, or brokers, have a competitive advantage over consumers in buying tickets as soon as they are released. Brokers can use numerous staff and software (“bots”) to rapidly buy many tickets. As a result, many consumers can buy tickets only on the resale market at a substantial markup.
Some ticket websites GAO reviewed did not clearly display fees or disclosed them only after users entered payment information.
“White-label” resale sites, which often appear as paid results of Internet searches for venues and events, often charged higher fees than other ticket websites—sometimes in excess of 40 percent of the ticket price—and used marketing that might mislead users to think they were buying tickets from the venue.
Selected approaches GAO reviewed, such as ticket resale restrictions and disclosure requirements, would have varying effects on consumers and businesses.
Nontransferable tickets. At least three states restrict nontransferable tickets—that is, tickets whose terms do not allow resale. Nontransferable tickets allow more consumers to access tickets at a face-value price. However, they also limit consumers' ability to sell tickets they cannot use, can create inconvenience by requiring identification at the venue, and according to economists, prevent efficient allocation of tickets.
Price caps. Several states cap the price at which tickets can be resold. But according to some state government studies, the caps generally are not effective because they are difficult to enforce.
Disclosure requirements. Stakeholders and government research GAO consulted generally supported measures to ensure clearer and earlier disclosure of ticket fees, although views varied on the best approach (for example, to include fees in an “all-in” price or disclose them separately).
Some market-based approaches are being used or explored that seek to address concerns about secondary market activity. These approaches include technological tools and ticket-buyer verification to better combat bots. In addition, a major search engine recently required enhanced disclosures from ticket resellers using its advertising platform. The disclosures are intended to protect consumers from scams and prevent potential confusion about who is selling the tickets.