New California law targets expensive ‘ghost tickets’ to concerts and sporting events

California lawmakers are cracking down on expensive concert experiences by targeting “ghost tickets” — so called because the person selling access to the show doesn’t actually own the ticket yet. It’s an issue that has stumped regulators who are combating deceptive e-commerce fueled by artificial intelligence.

Gov. Gavin Newsom on Sunday signed a bipartisan bill meant to rein in that market by banning the sale of tickets that are not yet owned by the people who advertise them and prohibiting the use of software to manipulate a venue’s purchasing restrictions.

“Buying a ticket shouldn’t come with hidden risks or unfair practices,” he wrote on social media after signing the measure, Assembly Bill 1349.

The bill requires ticket resellers to “implement reasonable measures” to prevent speculative tickets. Sellers found in violation could face misdemeanor charges and penalties.

The bill’s author, Assemblymember Isaac Bryan, cited an incident in which he and his friend searched for tickets for a concert at the Hollywood Bowl. The tickets listed online were expensive and were posted before actual tickets went on sale.

“Many fans buy these tickets not knowing that they are listed at a price greater than they would actually be when they eventually go on sale,” said the Culver City Democrat during a June hearing. “In the worst instances, fans never actually acquire the ticket that they paid for, leaving our small venues in California ultimately on the hook.”

What the major vendors are saying

The measure changed dramatically in the final days of the legislative session and Newsom in a signing statement asked lawmakers to revisit it because it may exempt marketplaces that he suggested should be regulated. He did not name them, but critics of the law pointed to Stubhub as a platform that appeared to be exempt from the law.

Initially, the bill moved forward with support from Live Nation, the entertainment behemoth that owns Ticketmaster. In a January statement, the company argued “no one should be able to scam fans by listing tickets they don’t have”.

Live Nation’s backing of the bill fueled skepticism from critics, who feared it would ultimately help the company squash its competitors.

Ticket reseller Stubhub lobbied heavily against the bill, spending $4.4 million in the two-year legislative session to influence the measure and several others.

In a surprise, Stubhub supported the final version of the bill, which is less favorable to Live Nation. Live Nation has not yet responded to a request for comment about the law from CalMatters.

The National Independent Venue Association, which supported the original version of the bill, argues the version Newsom signed creates liabilities for music venues and festivals while exempting Stubhub. Its leaders worry that independent venues and event promoters will break the law if they sell presale, VIP or waitlisted tickets.

It opposed the final version of the bill and urged Newsom to veto it.

AB 1349 “puts the small businesses and nonprofits that put on shows every night at risk,” Stephen Parker, the association’s executive director, said in a written statement after lawmakers passed the bill.

The association also argued that the amendments protects ticket resellers, such as StubHub, by exempting resale marketplaces from being classified as speculative ticket sellers, “even though every speculative sale happens on their platforms.”

Where things stand now

Newsom in his signing statement wrote, “While there may be good reasons for exempting certain sellers from the bill’s provisions, such a carve-out deserves further discussion, and I encourage the author to work with stakeholders to refine this policy.”

The Legislature had also considered another related bill that would have put a 10% markup cap on resale tickets. But it stalled in August in the Senate Appropriations Committee.

CalMatters Deputy Editor Adam Ashton contributed to this story.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.