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Ban on speculative ticketing, other ‘deceptive’ ticket sale practices passes Colorado legislature

By No User April 26, 2023 | updated 2 years ago

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An effort to change the way Coloradans buy event tickets passed its last major legislative hurdle on Wednesday.

If signed into law, Senate Bill 60 would prohibit many common practices in the ticket selling industry, classifying them as “deceptive trade practices.” This would include banning “speculative ticketing,” in which companies resell tickets they do not yet own and customers are often not guaranteed to receive the tickets they purchase.

This comes as recent events have shaken public confidence in the ticket selling industry, including hundreds of Bad Bunny concert tickets turning out to be invalid during his world tour and Taylor Swift fans experiencing hours-long wait times for tickets costing thousands of dollars a pop. 

“We need to keep tickets in the hands of fans,” said bill sponsor Rep. Mandy Lindsay, D-Aurora. “This bill works to address the deceptive practices that lead to sky-high ticket prices, which keeps Coloradans from seeing their favorite artists or teams.” 

If signed, the bill would update the state’s ticketing statues for the first time since 2008 to classify the following trade practices as deceptive: 

  • Selling a ticket without having possession of it

  • Selling a ticket that does not match its advertised description

  • Selling a ticket without disclosing the total cost, including service charges and other fees

  • Increasing the price of a ticket once it has already been selected for purchase

  • Using copyrighted or similar web designs, URLs or other symbols to sell a ticket, leading consumers to believe they’re buying from an event’s official ticket seller instead of a reseller

  • Using computer software, or bots, to automatically purchase a large number of tickets or circumvent ticket limits — which was outlawed federally in 2016

The bill would still allow individuals to resell their own tickets, unless the tickets were donated to them for free as part of a charitable event or offered in compliance with the Americans with Disabilities Act. 

The House passed the bill in a 49-16 vote on Wednesday, following the Senate’s 27-7 passage last month. 

Though the bill received bipartisan sponsorship, the votes hewed mostly along party lines, with Democrats in support and Republicans in opposition. Throughout both chambers, nine Republicans voted “yes” on the bill and only one Democrat — Sen. Tom Sullivan of Aurora — voted “no.” 

Critics of the bill said it is too harsh, particularly on reselling companies, such as Vivid Seats and StubHub. Those companies registered in opposition to the measure, saying it would make it harder for them to compete in the industry with giant primary ticket sellers, notably Ticketmaster. 

“This is a little heavy handed,” said Rep. Lisa Frizell, R-Castle Rock, who voted against the bill. “I feel like it is prohibiting competition among the resellers, who are just doing business.” 

Proponents of the bill argued that the current system, while profitable for ticket reselling businesses, is hurting customers and event operators. 

During public hearings on the bill, numerous local venue operators testified in support, saying they have to reject on a daily basis customers who purchased speculative tickets from resellers but never got the actual ticket.

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Other operators spoke of resellers using bots to circumvent ticket limits, buying hundreds of tickets at once to resell at higher prices. While the events may sell out, if the resellers do not find someone else to buy the tickets, the events end up being way emptier than the venue prepared for. This leads to venues losing money after overpaying for staff, security and drinks for a sold-out crowd. 

“People travel from all over the country to visit our famous venues, and sometimes they’re turned away because they unknowingly purchased a counterfeit ticket on a third-party website,” said bill sponsor Rep. Lindsey Daugherty, D-Arvada. “Our bill improves fans’ protections in the ticket purchasing process and prevents fraudulent tickets from ending up in the marketplace.” 

The House made several amendments to the bill in response to points opponents raised, including requiring ticket sellers to report illegal bot activity, narrowing the charitable purpose exception and expanding mandatory ticket refunds to tickets purchased from operators and primary sellers, in addition to resellers. 

Most notably, the House amended the bill to require ticket sellers to disclose to customers the total number of tickets that are and will be for sale, including whether additional tickets will be made available at a later date. Venues with capacities under 2,000 people are exempt from this requirement. 

Currently, venues, promoters, agents and artists commonly hold back a portion of event tickets from initial public sales. Tickets may be held to distribute to those with special or exclusive access, with the unused held tickets typically being released for public sale before the event.

This practice has been criticized by groups, including the National Consumers League, Consumer Federation of America, Sports Fans Coalition, Fan Freedom and Protect Ticket Rights. Those groups originally opposed SB 60 but are now supporting the bill — thanks to this amendment.

“This deceptive industry scheme creates fake scarcity to induce a ticket buying frenzy so that consumers panic, and in believing there are scarce tickets left, are compelled into buying now,” the organizations said in a joint letter. “When the true inventory of tickets is not presented to fans, they are not capable of making the best possible purchase decision.” 

While including transparency of ticket holdbacks persuaded many opponents to now back the bill, some lawmakers said it unfairly burdens the event ticket industry. 

“We have no other business where the state is requiring how much inventory they’re going to be selling,” said Rep. Matt Soper, R-Delta, who voted against the bill. “We don’t even require this through federal law of airlines. They’re actually allowed to oversell.” 

These amendments made in the House will have to be approved by the Senate before the bill can become law. 

In the Senate, the bill was also amended to only allow ticket revocation under the same standards as existing season ticket laws and to remove a portion that would have let venues pursue civil penalties against ticketing companies that engaging in deceptive trade practices, limiting the power to district attorneys and attorneys general. 

The bill will be sent to the Senate in the coming days to consider the House amendments. Then, it will go to Gov. Jared Polis for final approval and take effect immediately upon signage. 

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