Should Government Set Prices for Reselling Tickets?

Under a law that dates back to 1931 ticket scalping is banned in Michigan. But that could soon change. The House has passed legislation (House Bill 4015) to repeal the 84-year-old statute that makes it a crime to sell a ticket to sporting events, concerts, plays and other attractions for more than its face value. The bill is currently awaiting action in the Senate Commerce Committee.

Supporters of the measure argue that once a ticket has been purchased it becomes the property of the purchaser and government has no business interfering with an individual’s right to sell his or her property for whatever price the market will bear. They admit that above-face-value resales are possible, but only in highly restrictive situations.

“House Bill 4015 would restore free-market principles to the ticket resale market in Michigan and bring Michigan citizens out of back alleys to partake in legal economic transactions that will be subject to proper consumer protections,” said Dan Horning, a former member of the University of Michigan Board of Regents and a founding member of the Michigan Ticket Fairness Coalition. "The bill is also a clear example of what was meant when Gov. Snyder called for the elimination of outdated and redundant laws when talking about corrections reform. Removing our state’s outdated ban on ticket resale is a perfect example of a frivolous law that criminalizes basic economic behavior."

The bill is sponsored by Rep. Tim Kelly, R-Saginaw, who introduced House Bill 5108 last session, which was the same legislation. On March 25, the House passed House Bill 4015 on a 70-40 vote. It has been in the Senate Commerce Committee about two and a half months. Sen. Wayne Schmidt, R-Traverse City, is chairman of the committee.

Among those opposing the bill are entities that offer various forms of entertainment, such as Michigan State University, the Detroit Lions, the Detroit Pistons, Fisher Theatre, DeVos Performance Hall, Van Andel Arena, Ford Field, and Soaring Eagle Casino.

“Michigan State University and partners feel the bill will only prohibit Michigan’s law enforcement and the live entertainment industry from protecting consumers against ticket scalping,” MSU spokesman Jason Cody said. “If enacted, the bill would cause venues to lose their ability to ensure tickets go to fans and patrons, rather than to scalpers and online platforms, who buy tickets for the sole purpose of reselling them at enormous profit.”

“Additionally, the bill would make it even more difficult to make sure patrons have legitimate tickets and not forgeries,” Cody added. “Patrons cheated by brokers are less likely to purchase tickets again.”

Frank Cloutier, public relations director for the Saginaw Indian Chippewa Tribe, which operates the Soaring Eagle Casino, said House Bill 4015 would be particularly problematic for places of business like casinos.

“There is a brick-and-mortar element we feel is being ignored by supporters of this bill,” Cloutier said. “We negotiate what price we’ll pay for our acts at our venue and what we negotiate determines our ticket prices. This legislation would let someone else purchase multiple tickets to resell them at higher prices. That would allow an uncontrollable third party to control our house ... and they want us to honor their actions. That’s just ridiculous, especially for us. The prices we charge for our entertainment are set to attract customers for our casino.”

Groups supporting the legislation include: Michigan Ticket Fairness, National Association of Ticket Brokers, Michigan Citizen Action, Americans for Prosperity-Michigan, American Conservative Union, MSU College Republicans, Stub Hub, Sports Fan Coalition, the Institute for Liberty, and American Consumer Institute Center for Citizen Research.