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Tuesday, October 7, 2014

Can you scalp your Washington Nationals playoff tickets?

Can you scalp your Washington Nationals playoff tickets?

The good news is that once again, the Washington Nationals have made it to the MLB Playoffs!  The bad news is that they have their backs against the wall down 2-1 in the Division Series against the Giants.  However, if they manage to fight back and win the next game, they return to Washington with the home field advantage and tickets to the remaining games will be hot!  Whenever one of the local professional sports teams reaches the post-season, tickets to the home playoff games are all but certain to be a hot commodity on the resale market. This raises the question: is it illegal to resell tickets purchased from the team online for profit? 

The answer to this question is unclear to many, for good reason. If you have ever walked the streets surrounding Nationals Park before a game, then you may recall the police proclaiming through their bullhorns that it is illegal to resell tickets and that violators will be arrested. You may have also looked at the fine print on your ticket, which reads as follows:

“NO RESALE OF A TICKET IS PERMITTED VIA THE INTERNET OR ANY OTHER INTERACTIVE MEDIA, EXCEPT THROUGH THE OFFICIAL WEBSITE OF THE WASHINGTON NATIONALS OR SITES AUTHORIZED BY THE WASHINGTON NATIONALS.  THIS TICKET MUST NOT BE RESOLD OR OFFERED FOR RESALE IN A MANNER PROHIBITED BY ANY FEDERAL, STATE OR LOCAL LAW OR REGULATIONS. UNLAWFUL RESALE OR ATTEMPTED RESALE IS GROUNDS FOR REVOCATION AND CANCELLATION WITHOUT COMPENSATION”.

This is certainly enough to deter a cautious person from attempting to resell tickets on the Internet.  At the same time, if you have ever tried to buy a ticket online for a Nationals game, then you know there is a thriving online resale market through websites such as StubHub, where thousands of tickets are bought and sold for each game.  Could thousands of people be breaking the law? The short answer is that for individuals residing in Virginia, Maryland or Washington, D.C., no, the act of reselling tickets online is not illegal.

There is no federal law that directly regulates the act of online ticket reselling, although federal laws do generally regulate the manner in which electronic devices can be used to engage in online commerce (mainly, to prevent fraud).  Ticket reselling is regulated at the state level, and in some cases, at the local government level. The penalties for reselling tickets in violation of the applicable regulations differ from jurisdiction to jurisdiction, and range from small civil fines to possible jail time. In the majority of states, the laws applicable to ticket reselling are out-of-date and were enacted prior to the proliferation of online reselling.

In Virginia, ticket reselling is weakly regulated by the Commonwealth. The Commonwealth defers regulatory authority to local government per Virginia Code § 15.2-969, which provides as follows:

Any locality may provide, by ordinance, that it is unlawful for any person, firm or corporation to resell for profit any ticket for admission to any sporting event, theatrical production, lecture, motion picture or any other event open to the public for which tickets are ordinarily sold, except in the case of religious, charitable, or educational organizations where all or a portion of the admission price reverts to the sponsoring group and the resale for profit of such ticket is authorized by the sponsor of the event and the manager or owner of the facility in which the event is being held. Such ordinance may provide that violators thereof are guilty of a Class 3 misdemeanor. This section shall not apply to any resale of a ticket that occurs on the Internet.

Some localities, including the City of Richmond, have incorporated this language into their local ordinances (See Richmond Code of Ordinance, § 66-2, Scalping of Tickets to Public Events).  Note, however, that the Virginia Code statute expressly excludes ticket resale on the Internet from the statute.  Accordingly, in effect, the local ordinances are only applicable to hand-to-hand cash deals (i.e. traditional ticket “scalping”).       

The State of Maryland does not regulate ticket reselling, other than boxing tickets. Local government does have the ability to regulate ticket scalping, as was the case for many years in the City of Baltimore.  However, the Baltimore City ordinance prohibiting the sale of tickets for more than face value was repealed in 2013 in the wake of a lawsuit filed by a consumer against Ticketmaster for charging excess service charges (See Bourgeois v. Live Nation Entertainment, Inc., et al.).  What the future holds for ticket scalpers in Baltimore remains to be seen, but there is little doubt that Orioles playoff tickets will be “scalped” during postseason play.

In Washington, D.C., the legality of ticket scalping is also in flux. A long-standing statute prohibited the sale of tickets on sidewalks, streets and public spaces, thereby explaining the police and their bullhorns.  However, the statute was (perhaps, inadvertently) omitted from the D.C. Municipal Code in October of 2013.  Emergency legislation was submitted to the D.C. Council in 2014 to reinstate the statute.  All signs indicate that the sale of tickets in public spaces will remain prohibited in the District, but the author of this article was unable to confirm the status of that legislation. Regardless, the online resale of tickets in Washington D.C. is not addressed by the prior statute. 

Accordingly, in Virginia, Maryland and Washington D.C., the act of selling event tickets through online retailers is not, in and of itself, an illegal act. This is not the case in states like New Jersey where ticket resellers are required to obtain a broker’s license or face criminal liability.     

That said, reselling tickets online also presents the question of civil liability. Like the Washington Nationals (see above), most teams and venues write on the face of the ticket that the ticket cannot be resold.  While the primary goal of the team/venue is to deter online fraud and to keep ticket prices reasonable for “true fans” that want to attend the games, arguably, the team/venue is also creating a contract with the original buyer. If the original buyer breaches that contract by reselling the ticket, the team/venue can theoretically cancel the ticket and seek additional damages.  

While such cancellation seems unlikely for major professional sporting events, many artistic performers and small venues actively oppose ticket reselling and do make efforts to enforce the “contract” created by the ticket.  For example, some venues condition entry into the event upon the production of either photo identification that matches the name on the ticket, or the credit card that was used to purchase tickets.    

To summarize, in Virginia, Maryland and Washington, D.C., there is nothing illegal about reselling your tickets online, provided that you do not engage in any fraudulent activity prohibited by other laws.  Furthermore, while the team is very unlikely to take any civil action against you for violating the “contract” created by the ticket, in theory, it could. The reality is that no major professional sports team in the United States wants to roll back the clock and reignite the fight against online ticket sales.  Rather, the teams, including the Nationals, are finding ways to participate in the secondary market by partnering with ticket brokers and adopting dynamic pricing models that track consumer demand.


This article is not intended to replace the advice of legal counsel.