Last May, in a dimly lit basement beneath London’s South Bank, the UK’s most prolific ticket touts gathered to discuss Labour’s plan to effectively put them out of business.
One seasoned ticket “trader” pleaded with colleagues to help fund a war chest to lobby against the party’s election manifesto pledge to ban reselling tickets for profit.
If the policy went ahead, he warned in undercover footage filmed by the Guardian, the risk was stark. “Bottom line is, we are all fucked.”
Eighteen months later, the worst nightmare for touts – and the resale platforms through which they ply their trade – has come to pass.
On Wednesday, the government confirmed reporting by the Guardian and the Financial Times that reselling tickets above face value will be outlawed.
After more than a decade of campaigning by music industry groups, consumer champions and MPs, the jigsaw finally fell into place just a week after Radiohead led UK artists including Coldplay, Dua Lipa and Mogwai in urging Keir Starmer to act.
The decision, according to the Business Department minister Kate Dearden, was a “no-brainer”, particularly given intense pressure over the cost of living. “We all know someone who’s been ripped off,” she told the Guardian.
“You work hard all week and you look forward to your favourite gig. When you see up to six times the price [being charged] on the resale market, people can’t afford that.”
Over the past decade, the Guardian has repeatedly investigated and exposed the tactics that led to this kind of exploitation. They include fraudulent practices such as “speculative selling” and the use of specialist software such as “bots” to hoover up tickets and flip them for top dollar.
Touts who fleeced fans of Lady Gaga and Ed Sheeran using such methods have even been jailed, in the rare cases where fraud could be proved. Yet, when urged to act, previous government demurred.
Speaking in 2011, a year after the Labour MP Sharon Hodgson first proposed a ban on touting, the future Tory chancellor Sajid Javid described touts as “classic entrepreneurs”. The erstwhile business minister Kevin Hollinrake said he had “quite happily” used Viagogo.
The new legislation, whose implementation date is yet to be confirmed, flips this attitude on its head. It will prohibit for-profit resale on specialist platforms as well as on social media, with a carve-out for special situations, such as the Wimbledon tennis tournament’s debenture model.
According to government estimates, consumers could save up to £112m a year – or £37 a ticket – as a result.
Sites will be monitored by a recently beefed-up Competition and Markets Authority (CMA) and will be liable for penalties of up to 10% of turnover, about $180m for Viagogo’s US parent company.
The scale of fines may not matter, because banning touting threatens to snuff out the resale sites’ business model altogether.
They rely, to a large extent, on fostering relationships with a handful of super touts, sometimes providing them with specialist tools to help them maximise sales, and sharing a cut of the profits made when tickets are sold for huge mark-ups.
Sites such as Twickets, which allow fans who can’t attend to recoup what they paid or pass a ticket to a friend, charge only service fees. That low-margin model is unlikely to be an attractive consolation prize for resellers.
Shares in StubHub Holdings have tumbled about 25% – or more than $1bn – since news of the ban in the lucrative UK market broke.
Resale sites’ argument against the policy is, they say, not financial but altruistic. Their platforms may charge hefty markups on certain tickets but they offer guarantees. If something goes wrong and your ticket never materialises, you get a refund (albeit not for any transport or hotel costs you may have incurred).
If they are forced out of the market, the sites argue, fans will still pay over the odds but will do so via illegitimate platforms or outright fraudsters, where they will be scammed.
Banks, which would have to process the chargebacks in such cases, have also warned that fraud could increase.
Such warnings have repeatedly referred back to a report, written by the public affairs consultancy Bradshaw Advisory, suggesting that fraud rates are four times higher in Ireland and the Australian state of Victoria, both of which restrict resale.
Longtime anti-touting campaigners, such as the music industry funded group FanFair Alliance, have been sceptical. They point out that the Bradshaw report contains no data from before resale bans came in and cannot, therefore, draw conclusions about cause and effect. They also point out that the Bradshaw report was commissioned by StubHub.
Government officials are understood to have consulted with overseas counterparts on whether resale caps have fuelled fraud. “We’ve not seen any evidence [of that],” said Dearden. “What we do know that is that the current system is ripping off fans.”
Reg Walker, a ticketing and security consultant, is reserving judgment until the detail of the policy is clearer. He fears loopholes that could leave room for touts to prosper.
“The government needs to make sure the legislation applies across borders, as it did for the London 2012 Olympics, so that it really does protect consumers,” he said.
