Fraud Prevention

Ticket Scalping: a Million-Dollar Machine

June 13, 20192 min Read

We recently read an article by Deadline’s Jeremy Gerard with Jordan Roth, President of Jujamcyn Theatres. They discussed the recent news of Jerry Seinfeld’s six-month residency at the Beacon Theatre in New York City and theorized that ticket scalping is the result of prices not matching demand for the show.

Their theory is, that if theatres charge only $100 for a show that people are willing to pay $300 for, it makes economical sense for ticket resellers to step in and make a profit. Roth makes it clear though: just because it makes financial sense, doesn’t mean that resellers should be able to do so en-masse with illegal software — something we wholeheartedly agree with.

Nevertheless, bot abuse is what makes scalping so incredibly efficient: in fact, in 2010, three men plead guilty to making nearly $25 million dollars by using bots to purchase and resell tickets. Because of cases like this, ticket buying bots are actually banned in 13 states of the USA. The Foo Fighters even resorted to manually selling tickets to ensure that only genuine fans were able to purchase tickets at a fair price.

In the article, they suggest that theatres could simply charge the $300 from the very beginning. This would bring the “profit” back to the actual performers/stockholders instead of the pockets of scalpers. However, this comes at the cost of possible negative blowback because the theatres might seen to be “gouging”. And we’re not so sure it actually makes sense, as it is scarcity that drives demand. People are only willing to pay triple the price when there are no tickets left, and it feels like the show is very popular — the same customers very well could balk at paying such a price on the day the show is announced and while there are still thousands of available seats. What may make more sense is the hotel/airline model where tickets become more expensive, as fewer are left for sale.

Arkose Labs provides online ticket sellers with the only security solution backed by a guaranteed SLA against automation — so Jerry, Jeremy & Jordan, please get in touch, and we’ll help you out too.