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Ontario’s anti-scalping rules voted into law; focus shifts to enforcement

Hockey tickets are sold outside a game in downtown Toronto. On Wednesday, Ontario voted new anti-scalping rules into law.

Donald Weber/The Globe and Mail

Ontario voted a series of anti-scalping rules into law on Wednesday, potentially changing the entire ticket-buying experience for consumers, resellers, and the live-event industry – depending on how the changes are enforced.

The vote came nearly a year and a half after the Tragically Hip's widely scalped final tour with late frontman Gord Downie sparked an intense debate about ticket fairness in Canada. The new law stipulates that rapid-ticket-buying scalper "bots" will now be illegal, that ticket sellers must disclose the full cost of tickets – including service fees – much earlier on in the purchase process, and that tickets to concerts, theatre, sports games and other live events cannot be resold for more than 150 per cent of the original price. A date has not been set for the rules to come into force, as the province works to establish regulations within the new framework.

It is that latter measure – mandating resale price caps – that Ontario's government has held up as its banner proposal for new consumer protection since announcing its ticket-law framework in June. It's also the measure that the live-event industry, including Ticketmaster Canada and the resale marketplace StubHub, has most vigourously fought against in long consultations with Queen's Park. Now that it will be enshrined into law, Ontario faces the challenge of enforcing it – and pushing back against not just an agitated industry, but Canadian precedent.

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Canada doesn't have a good track record of enforcing laws against ticket markups. Both Manitoba and Quebec have anti-scalping laws that restrict the resale of tickets above their original price, but their fine print and enforcement strategies tell a different story.

In Manitoba, it's illegal to sell marked-up tickets, even though it's easy to find them on websites such as StubHub with a few clicks. A provincial spokesperson said that such markups appeared to breach the province's Amusements Act, but that local police would be responsible for any investigations or charges.

But in Winnipeg, ticket scalping is a low priority; the Winnipeg Police Service mandated to look after the issue also looks after human trafficking, missing persons and other serious crimes. The service also finds it difficult to investigate complaints connected to websites such as StubHub because the ticket sellers could be based anywhere. "It makes things a lot harder; it's almost like buyer beware," said Sgt. Darryl Ramkissoon. "Unless it's something major, it's not a priority."

Quebec's Consumer Protection Act disallows businesses from selling marked-up tickets to consumers and has fined companies such as Billets.com for doing so. The province depends on consumer complaints to take action. But the legislation does not extend to transactions between two individuals, like those traditionally facilitated by StubHub, which bills itself as the world's biggest marketplace for ticket trading. While some broker businesses use StubHub to sell tickets – Ontario's new laws would require marketplaces to disclose more seller information – right now it's hard to tell who's selling a ticket before a sale is made.

Attorney-General Yasir Naqvi, who has spearheaded Ontario's ticketing-law changes since earlier this year, said the province's new laws will apply to individual consumers, avoiding the headaches Quebec faces. And he said he will fund a dedicated team through Consumer Protection Ontario to enforce the new laws, which he believes will prevent the problems faced in Manitoba. New enforcement officers will handle ticket complaints, investigate various parties in the sales process and hand out fines.

"We took an administrative route on the caps on resale prices as opposed to going by way of police and provincial offences," Mr. Naqvi said in an interview. "It's easier to prove. ... We don't have to prove a case in court."

Combined, Ontario's new rules mark a first-of-its-kind legislative effort in Canada to make buying event tickets fairer for consumers in an era where technology has enabled scalpers to buy up massive blocks of tickets, and where final ticket prices are regularly jacked up by those market-swaying scalpers as well as obscured by hefty fees.

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While most of the live-events industry has applauded the legislation's consumer-focused tone and anti-bot provisions, companies including Ticketmaster Canada and StubHub, which account for the majority of Ontario event ticketing, have consistently railed against measures they see as interfering with the free market for tickets – especially the cap on resale prices.

Now those, as well as other ticketing companies that operate in Ontario, will likely have to adapt their systems to the province's new laws so that the total value of a ticket is disclosed much earlier in the process. It will be a costly endeavour to adjust to the rules of a relatively small market; while Ontario is a major live-event hub for Canada, it is a meagre slice of the global entertainment pie.

In an interview at Queen's Park in November, Ticketmaster Canada chief operating officer Patti-Anne Tarlton said that the race to adapt to the new laws could give some companies an unfair advantage if they can do so more quickly. It will also be costly. "We'll have to assume those costs, because we can't necessarily pass them on to the content owners," she said. Asked if costs might be passed to customers through service fees, she said that "you have to be able to manage the customer reaction to that as well."

StubHub, which generally lists tickets in U.S. dollars, will have to list prices in Canadian currency and be more transparent about a seller's identity, particularly if they are a business and not an individual. Stubhub is already in the process of listing tickets here in Canadian dollars, and has added similar seller disclosures in other markets such as in the U.K.  But modifying the platform for individual markets is a cumbersome process, said Laura Dooley, its senior manager of government relations. "It's going to take a lot of work to meet the requirements on the table," she told The Globe and Mail.

Working with the ticket industry is the next step to bringing the law into force, Mr. Naqvi said. "When the law is passed, the conversation is different – it's not about whether this is a good rule or a bad rule," he said. "Now we know it's the law, the question is, how are we going to implement this rule, and making sure that it's practical and meets the intended objective of the legislation."

Tim Chambers, a U.K.-based live-event consultant and executive editor of the International Ticketing Yearbook, said he believes that Ticketmaster and StubHub will go through with adapting to the changes, lest they give up market share to competitors. "Neither organization, nor their parents eBay and Live Nation, will want to be locked out of any territories," he said. "... So they will continue to lobby to effect change to support their own commercial self-interest, whilst claiming to be acting on behalf of the artist and/or the consumer, and develop operational workarounds."

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Last month, Ontario withdrew a transparency proposal that would have forced ticket vendors to reveal how many tickets the general public has access to for live events. Alberta also recently said it would modify ticket laws but stopped short of implementing price caps, citing fears that heavy regulation might prevent events from coming to the province.

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