What Is a Scalper?

A scalper is someone who purchases tickets to a sporting, musical or theatrical event and then re-sells the ticket for more than its face value. Usually, scalpers will buy a large number of tickets for events that are popular and the event is expected to be sold-out. Did you ever want to take a date to a first-run of Evita on Broadway and couldn't by a ticket from the theater? Or have you ever wanted to go to a pivotal World Series game but no tickets were available? When you hear that tickets for an event are "sold out," more often than not you can get a ticket at the venue, but you're usually going to pay a significantly higher price. Scalpers typically stand outside the event hawking tickets that they purchased at face value and re-sell for a profit.

Scalper vs. Ticket Broker

Scalpers are often hustlers, working the streets and the supply and demand curve and in many locations (and some countries for some sporting events) are engaging in illegal activity. A broker on the other hand, is in business of buying large numbers of tickets for events that are expected to be in great demand and then selling them at a higher-than-face-value. The principles are pretty much the same between scalper and legitimate brokers. The ethics, however, can sometimes run afoul of the law and what would be commonly decent. The scalper works the venue while a broker usually has a sales office and employees that help purchase the large blocks of tickets. The profit principle is at work in both instances but scalpers tend to be a little more unscrupulous.

Things to Look for

When buying a ticket from a scalper, you will likely never see that person again. There are a few things to keep in mind when buying a scalped ticket. For one, oftentimes the seating promises are misrepresented. For example, a scalper might sell a ticket for a baseball game and tell you it's a good seat behind the first base line. What he doesn't tell you is that it's in the nosebleed section high above the field. So it's useful to take a seating chart to any event for which you don't have a ticket and plan on buying one from a scalper. Know also, you'll be paying more than you would if you purchased it at the ticket window but sometimes that not an option. It's also been known to happen that scalpers over-bought tickets from (sticking with a baseball scenario) a game played the day before the game you showed up to watch. You can fall into the trap of buying a ticket for a game that has already been played, so inspect the ticket thoroughly and make sure it's for the right game.

Opponents and Proponents

Nobody wants to pay more than they must to attend an event. So those opposed to scalping or brokering tickets aren't happy to pay more than the face value of a ticket established by the theater or sports team that sold the ticket in the first place. They look at scalpers and brokers as taking advantage of attendees by overcharging. Proponents, on the other hand, argue that the prices they are charging are free-market prices established by supply and demand. They consider that the tickets are under-priced in the first place and that their sale on the secondary market more accurately reflects the true value of the ticket.

Scalping Laws

There are laws on the books in some states and more municipalities to discourage the practice of scalping. However, the laws haven proven weak, ineffective and rarely enforced. For example, some municipalities have made it illegal to for unauthorized sales agents of a team or establishment to sell tickets within a certain distance of the event. It doesn't do much to solve the scalping problem, it just moves it further from the turnstiles. New York state has made it illegal to broker tickets so brokers simply moved to surrounding suburbs of New Jersey to set up business. It's kind of like school districts that prohibit smoking on school grounds so students start smoking across the street.

Scalping and the Internet

It didn't take long for scalping to move to the Internet. There are long-established companies like TicketMaster that have been buying blocks of tickets well in advance of events and then selling them on the secondary market. Other competitors, like StubHub and Coast to Coast Tickets have emerged as competitors in the secondary market. E-bay has become another source to sell tickets, particularly for those who hold season tickets to events and can't use them. Of course everyone wants to make money on a transaction but season ticket holders aren't a major source of what drives up the prices of tickets.

References

• The basics of scalping
• The folly of anti-scalping laws
• Unscupulous practices and more