According to the California Penal Code § 346, selling "a ticket of admission to [an] entertainment event, which was obtained for the purpose of resale, at any price which is in excess of the price that is printed or endorsed upon the ticket, while on the grounds... where [that] event... is to be held or is being held, is guilty of a misdemeanor." In clearer words, scalping tickets is illegal.
Anyone who's ever been to a game or a concert is familiar with the procedure: to buy a scalped ticket, you search any crowded spot near the arena for someone looking paranoid. And chances are, anyone who's ever seen tickets being scalped has also seen a fair number of scalpers being told to leave by the cops (or even arrested, if they get disorderly). It's a dumb law, but it's one of countless dumb laws, and if the State of California wants it on the books, that's its prerogative.
The evolution of the internet and the gradual movement of (effectively) all legal ticket sales online has given rise to the internet scalper, a unique brand of sociopath that uses multiple computers and programs to buy up large sections of tickets to hyped events to sell them at outrageously inflated prices. Corporations have since been founded around that very business model: StubHub, founded in 2000, became synonymous with internet scalping in early 2007 when it merged with auction king eBay.
The question that California laws have yet to answer - or for that matter, even address - is why this form of ticket scalping remains legal while selling tickets in person is not. Until recently, there remained a viable technicality distinguishing the two: internet sales were not taking place on the arena premises. Yet thanks to smartphones, this isn't the case anymore. Internet firms even have had the audacity to create apps that allow you to use your phone to buy your ticket and get into the arena itself - from the convenience of the parking lot. Predictably, prices have risen to match the market trends, and sufficiently desperate StubHub cutomers often pay admission prices inflated by as much as 300% (to say nothing of eBay prices, which can reach higher than Yao Ming). Functionally, then, the only difference between the online and street scalpers is that street scalpers have negotiable rates and recognize that they can't afford to even suggest 300% inflation rates for fear of scaring away customers. The icing on the cake is that official online ticket retailers (Ticketmaster, Live Nation) have increased ticket fees annually in an attempt to make up lost ground.
At this rate, it seems we're headed towards another College Board-style legal monopoly - and short of Teddy Roosevelt coming back from the dead and adapting miraculously to 21st century politics, the country doesn't have any trust-busters willing or able to save fans from the future state of affairs. It's up to America to keep buying tickets from the crackheads on the corner. When the cops ask, we'll just say it's in the interest of free enterprise.
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