BOTS Fines Announced in New York

Settlements reached In New York are the first fines levied under new act

  • by Lisa White
  • Published: May 16, 2017

The state of New York has fined six ticket brokers $4.19 million over BOTS act violations.

Settlements with six ticket brokers that illegally purchased and resold hundreds of thousands of tickets in New York State since 2011, including on-ticket resale platforms like StubHub and Vivid Seats, were recently announced by the state’s Attorney General Eric T. Schneiderman.

The settlements require the six companies to pay a combined total of $4.19 million in disgorged profits and penalties to the state.

Five of the companies – Renaissance Ventures, LLC (d/b/a Prestige Entertainment) of Connecticut; Ebrani Corp (d/b/a Presidential Tickets) of New York; Concert Specials Inc. of New York; Fanfetch Inc. of New York; and BMC Capital Partners, Inc. of New York – violated New York’s ticket laws by using illegal software known as ticket “bots” to purchase large numbers of tickets on websites such as Ticketmaster.com before the tickets could be obtained by consumers. After obtaining the tickets illegally, resellers then resold them at a large profit. Five of the companies – Prestige Entertainment, Presidential Tickets, Concert Specials, Fanfetch and JAL Enterprises, LLC (d/b/a Top Star Tickets) of Massachusetts – each illegally sold tickets to events in New York over the last several years without first obtaining the required license. Prestige Entertainment paid $3,350,000, Concert Specials paid $480,000, Presidential Tickets paid $125,000, BMC Capital paid $95,000, Top Star Tickets paid $85,000, and Fanfetch paid $55,000.

The settlements require that the companies and their principals maintain proper ticket reseller licenses to resell tickets to New York events, abstain from using bots and pay penalties for having operated illegally. The Attorney General also announced a settlement with a seventh company, Componica, LLC, of Iowa, that developed software libraries used by ticket bots to try to get around tests that websites use to determine if a user is a human or a bot (often referred to as “CAPTCHA” tests). Componica has agreed to not develop or use software to bypass security measures on ticketing websites.

“This is a continuation of the dialogue that’s been coming out of New York,” said Joe Cassitto, head of broker relations for New York City-based TixPix, a no-fee ticket broker. “They’re trying to do anything reasonable to even the playing field for casual fans and people doing this for a living; they’re also looking for transparency.”

Attorney General Schneiderman’s investigation found that Prestige Entertainment ran one of the country’s largest ticket purchasing and reselling operations and used at least two different bots and thousands of credit cards and Ticketmaster accounts to purchase tickets to New York shows. Prestige Entertainment also bought IP addresses from online IP proxy services to evade detection of its bots by the retail ticket marketplace. In one transaction, the company purchased 1,012 tickets to a 2014 U2 Concert at Madison Square Garden in one minute.   

San Francisco-based ticket broker StubHub had no comment on this topic.

The National Association of Ticket Brokers has long taken a position against bot use and supported legislation to stop bots.

“We’ve advocated for open markets, but these need to be free of deceit and fraud,” said Gary Adler, counselor with the NATB.

He added the bot situation gives the industry a black eye, and ticket resellers are an easy target for people to dislike.

“It hurts our members because they have less access to tickets to sell or resell,” said Adler. “While bots are the target, this is not the problem in terms of people’s access to tickets. Getting rid of bots is not the panacea for getting tickets into fans’ hands.”

Adler said hold-backs and lack of ticket availability to the general public need to be transparent so ticket brokers don’t get blamed for scooping up the inventory.

“Getting rid of bots will not improve ticket availability,” he said.

“In response to the news/case overall, in TicketCity’s 27 years of business, the use of illegal activity to obtain or resell tickets has never been condoned on our platform, and we list this in our Terms & Conditions,” said Shannon McKinley, the Austin, Texas company’s director of PR/communications. “We’re an online marketplace that supports a free market model for the ticket industry and believe open competition always leads to the best consumer experience. We will continue to form decisions that support making ticketing a fair and transparent place so that fans can continue to enjoy their favorite events. That said, ticket resellers are expressly prohibited from selling tickets unfairly obtained on TicketCity.”

Cassito said venues, artists and teams can do a better job in deterring the secondary market. “For the secondary market, it’s a matter of adjusting to different delivery methods, but there will always be an opportunity for people to profit from buying and selling tickets as long as venues, artists and teams create it by offering a price that is indicative of the demand,” said Cassito.

Since releasing its report on the concert and sports ticket industry titled Obstructed View: What’s Blocking New Yorkers From Getting Tickets in January 2016, the New York Attorney General’s office has announced settlements with 15 businesses involved in the illegal ticket trade, including resellers, facilitators and software developers, for a total of $7.1 million. The office’s broader investigation into the secondary ticketing industry remains ongoing.

In 2016, New York enacted legislation called for by Attorney General Schneiderman that added criminal penalties for bot use to the existing civil penalties. That law took effect in February 2017. The settlements announced to date involved misconduct committed before the new law took effect.

“If the industry tries to stop ticket resellers by putting caps on ticket purchasing and reselling or making it illegal, it will drive up ticket prices and lead to less consumer protection,” said Adler.


 

 

  • by Lisa White
  • Published: May 16, 2017