Ticket scalping describes the resale of tickets at higher than face value to make a profit by an individual or third-party vendor. While there are no federal laws regulating scalping, some states, including North Carolina and South Carolina, have their own laws limiting the resale of tickets.
Ticket Scalping Defined
Ticket scalping, also known as ticket brokering or ticket resale, is the act of buying tickets and then selling them at higher than face value. Private citizens and third-party sellers have increasingly taken to scalping since most ticket sales now take place on the internet.
Today, ticket scalpers use bots (software programs created to carry out automated, predefined and repetitive tasks) to buy as many tickets as possible when an event such as a concert or sporting event is announced.
Bots can buy online tickets to the event until it sells out, then an individual or a vendor will sell those tickets to consumers at a considerably higher price.
Federal and State Laws on Scalping
There are no federal laws prohibiting ticket scalping. However, many states have their own scalping laws on the books, which vary from place to place. Sixteen states have laws that make scalping illegal.
Some states require a special license to resell tickets. They are: Alabama, Georgia, Illinois, Massachusetts, New Jersey, New York and Pennsylvania, and four states leave it up to local municipalities to make scalping laws. They are North Dakota, South Dakota, Ohio and Virginia.
South Carolina Laws on Ticket Scalping
In South Carolina, an individual or business who knowingly purchases tickets exceeding the maximum quantity a ticket seller allows at the original sale point or that is printed on the tickets, intending to resell them in excess of more than one dollar above their value is in violation of the state’s Unfair Trade Practices Act.
There are exceptions to this law. It does not apply to tickets offered through resale via the internet or at a permitted event when an individual or organization reselling the ticket guarantees a full refund to the buyer if the event is canceled, the ticket holder is denied admission to the event (this does not apply if the buyer’s actions or omission caused their not being able to get in), or the buyer does not receive the ticket so cannot use it to attend the event.
North Carolina Laws on Ticket Scalping
North Carolina's ticket scalping laws are far more detailed. An individual or business can add a “reasonable” service fee to a ticket’s face value, but the seller or reseller cannot recoup funds that are higher than the ticket’s face value, tax and authorized service fee combined.
A ticket’s service fee cannot be more than $3, unless the promoter or venue owner and ticket agency agree, in writing, to a service fee greater than the amount for initial ticket sales by the ticket agent.
This fee can be an amount that has been pre-established per ticket or a percentage of that ticket. The service fee amount must be made public by writing or printing the amount on the tickets. Any person or entity in violation of this law faces a Class 2 misdemeanor.
When Tickets Can Be Sold for Greater Than Face Value
Individuals can resell tickets via the internet at greater than face value if the:
- Event venue has not prohibited internet ticket resales.
- Party reselling a ticket online offers it with a guarantee that meets certain requirements, and the prospective purchaser is directed to that guarantee before purchase.
- Party reselling tickets has obtained a registration certificate for wholesale merchants, retailers, and facilitators and pays sales and use tax to the state.
North Carolina’s Prohibition on Reselling Tickets
An event venue may prohibit the resale of tickets at a price greater than face value. To do this, the venue must file a notice of resale prohibition with the North Carolina Secretary of State and post this notice on its website. The primary ticket seller must also post the notice on its website.
Ticket prohibition will not be valid until 30 days after the posting of the notice. It expires on December 31 of each year, unless renewed. The venue must renew the prohibition notice with the Secretary of State and post it again. The venue will pay a fee of $125 for the initial notice and $25 for each renewal.
North Carolina Ticket Guarantee Laws
An individual who resells tickets must guarantee a full refund to a buyer if the:
- Event is canceled. Handling and delivery fees may not be included in the refund.
- Buyer is denied admission to the event (This does not apply if the buyer’s action or omission caused their not being able to get in.)
- Buyer does not receive the ticket, and cannot use it to attend the event.
These guarantees do not apply to student tickets from higher education institutions for sporting events.
North Carolina Laws on Ticket-buying Software
North Carolina also regulates the use of ticket-buying software. A person who knowingly distributes, gives, possesses, sells, transfers or uses software designed or created to interfere with an online seller who sells theater, concert, sports tickets or tickets for any kind of public entertainment by circumventing security or access control measures on the ticket seller's site is in violation of state law.
In North Carolina, it is illegal to use deceptive or unfair acts or practices that affect commerce and create unequal competition. As a result, the official ticket seller and venue may bring legal action against the user of ticket-buying software.
Michelle Nati is an associate editor and writer who has reported on legal, criminal and government news for PasadenaNow.com and Complex Media. She holds a B.A. in Communications and English from Niagara University.