This article was first published on Lexis®PSL Commercial on 9 June 2016.

Commercial analysis: From the Euros to the Rio Olympics, the summer of 2016 will see athletes from across the world participate in a number of high profile sporting events. As part of our Summer of Sport series, Louise Millington-Roberts, sport, media & entertainment consultant at Hill Dickinson LLP, examines the risk of ticket touting taking place and the issues affecting the resale ticket market.

What is ticket touting and why has it proved to be problematic?

The resale of tickets for a profit in breach of conditions, known as ticket touting, has historically been problematic for a rights holder and consumers. When a consumer buys a ticket, other than from the primary or authorised source, they often do so at a grossly inflated price, and may later find that a ticket is invalid or in some cases counterfeit.

In the majority of cases, a ticket remains the property of a rights holder, much to the protestations of the unauthorised secondary market who argue that a consumer should have the freedom to do what they wish with a ticket. There are many reasons why a ticket must remain the property of a rights holder, including for security reasons, and although a rights holder could sell a ticket for a greater value and is often accused of ‘undervaluing’ the price of its tickets, the pricing strategy is used to benefit the genuine fan, who a rights holder would rather attend its event, than those consumers with the deepest pockets.

What laws are there in place to prevent ticket touting and is there a risk of it taking place at any of the major sporting events taking place this summer?

Under UK law it is not illegal to resell tickets for events (other than football) unless the event is covered by specific legislation as seen implemented for the London Olympics. Although legislation and ticket terms and conditions will prohibit the touting of tickets for Euro 2016, and the Rio Olympics, history has proven that ticket touting will be rife.

It is illegal to resell football tickets. However, this does not in reality prevent the touting of tickets taking place, in particular via websites which sit outside of a particular jurisdiction. In the UK, a street trading or pedlar’s license is required by law to sell on the street and ticket touts have in a small number of cases fallen foul of this legislation where it has been enforced.

The Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277 (CPUT Regulations) provide that it is illegal to give consumers misleading information and omit material information that a consumer requires to make an informed choice before making a purchase. This legislation could apply to ticket sellers.

Despite the existing CPUT Regulations, the Consumer Rights Act 2015 (CRA 2015) introduced new measures where a ticket is offered for resale via a secondary ticketing facility, providing for certain information to be provided which enables a buyer to identify a seat, any restrictions and the face value of a ticket.

It is also possible to bring civil action against ticket touts and secondary ticket exchange websites, where a ticket is transferred, advertised or sold in breach of ticket terms and conditions.

Have there been any notable breaches of CRA 2015 where a ticket exchange website has facilitated the resale of tickets for events?

Despite CRA 2015 coming into force, to among other things, provide a consumer with greater transparency when deciding to buy a particular ticket from an often still unauthorised source, there continues to be daily flouting of the new legislation. In practice, although in an increasing number of cases a block and row number may be provided by a seller, the provision of a specific seat number is not provided in breach of the legislation.

Are adequate enforcement measures in place to deal with ticket touting, and if not, has there been any action at parliamentary level to deal with this?

Unfortunately, existing legislation is inadequately enforced and a rights holder can only rely on self-regulation, by policing the market and enforcing its terms and conditions. This action has historically and remains to be the only action relied upon by the majority of rights holders who have both the appetite and resource to act.

Although campaigning has led to support at parliamentary level to tackle ticket abuse, the changes which came about under CRA 2015 are far from satisfactory. To date, despite complaints being made to Trading Standards no test cases have been brought under CRA 2015.

In fact an independent secondary ticketing review into CRA 2015, published on 26 May 2016, made practical recommendations which included challenging the platforms to ensure resellers fully comply with the rules, that purchasers of tickets are provided with the identity of ticket sellers, and also pressed for enforcement action to be taken.

The only way a consumer can be fully protected is for legislation to be enforced, and for it to go much further. The prohibition of ticket resales via unauthorised platforms could be seen as the ideal resolution—however, this will never be introduced and enforced. The capping of the resale price of a ticket may price ticket touts and fraudsters out of the market, but for now the most recent measures have arguably only legitimised ticket touting via secondary platforms, if conducted in a particular way.

Have there been any notable trends or developments in this area?

Ticket prices for events have escalated. Arguably in part this could be due to rights holders passing on the cost of policing ticket sales in an attempt to protect the genuine fan. Once a ticket goes on sale, ticket touts use various methods to harvest tickets in huge quantities and substantial numbers of tickets are often seen on the secondary market moments later, reselling at hugely inflated prices.

There has most recently been a move to pre-registration for tickets and the launch of last minute ticket sales—where promoters are holding back vast numbers of tickets in an attempt to reduce the interest of fans who were unsuccessful first time around acquiring tickets from unauthorised secondary platforms.

It is now common place for rights holders to identify and ban ‘known’ ticket touts from acquiring tickets and to allow for tickets to be resold via authorised secondary platforms. Although a ticket continues to remain the property of a rights holder, it is now widely accepted that it is only fair that a buyer should be able to sell a ticket at face value or return a ticket—where for example, they are no longer able to attend an event.

What preventative measures can individuals take to ensure they are buying tickets through legitimate re-sellers?

In order to avoid being turned away at a venue and to avoid paying for a ticket which simply does not exist, a consumer should only buy from the primary source and authorised ticket platforms.

In particular, where it is a secondary platform, the consumer should be provided with full ticket details including seat number.

It is imperative that a consumer checks which channels/websites are authorised, where possible using telephone numbers/links to ticket platforms which appear on the event organiser’s website as consumers often fall foul of buying tickets from fake sources or websites which are set up to look legitimate and authorised.

Interviewed by Sean Delaney.