Ed Sheeran and Harry Styles, among other musicians, welcomed the government’s new policy on ticket touting, announced last week. So, too, the well-off debenture holders who resell tickets for the best courts at Wimbledon, posh touts who in a generous act of Strawberries and Pimm’s socialismare exempt from the new rules. But many who like going to sporting events, concerts and the like may not love the consequences of a policy change that , though well-intentioned, is economically illiterate.
The new rules will make it illegal to resell a ticket for more than its face value (plus essential administrative costs), with heavy fines for offenders and the enabling ticketing marketplaces. The government claims this will ensure tickets reach fans at “fair” prices, rather than enriching middlemen. That sounds great until you remember that secondary markets exist because primary markets fail to clear. If Taylor Swift prices tickets at £200, when people would willingly pay £2,000, she is not being generous – she is creating artificial scarcity that benefits whoever wins the initial ticket lottery, who may not necessarily be the biggest fans. Bots that let touting firms buy tickets en masse to then resell them may be obnoxious but they are a symptom not a cause of the problem: more people would like to attend events at the published price than there are tickets available.
The government is also exploring how to improve how tickets are issued to give a fairer shout to genuine fans who cannot afford market-clearing prices. Maybe technology that ties a ticket to a mobile phone or digital identity could prevent the reselling of underpriced tickets better than the new rules, which will probably return the trade from transparent, customer-friendly online marketplaces like Stubhub to the black market.
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