Good economics: Repeal state ticket law

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A scalper attempts to sell his tickets outside a sporting event.

Article Highlights

  • The ticket scalping law is routinely ignored in Michigan.

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  • Michigan’s outdated ticket law has stifled the growth of local businesses.

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  • Fortunately, proposed legislation in the Michigan House (Bill 5108) seeks to overturn the arcane ticket law.

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The active secondary ticket market for concerts and sporting events — sometimes derogatorily referred to as “ticket scalping” — has generated an unfair reputation as a market for hustlers looking to make a quick buck by gouging fans with excessive ticket prices.

In reality, there is nothing troublesome, problematic or shady about two willing individuals agreeing to a price for a product and engaging in a completely voluntary transaction – that’s the basis of a market economy and describes what happens millions of times every day when Americans buy and sell homes, cars and stocks, or bid for baseball cards, old coins, or clothes on eBay.

When a fan agrees to purchase a ticket to a concert or sporting event that might sometimes be above the ticket’s face value, how can that be a crime when the buyer has voluntarily, and quite willingly, made a market-based exchange?

Unfortunately, Michigan is one of only a few states that make it illegal for two individuals to voluntarily exchange tickets when the agreed-upon price is above face value. The ticket scalping law is routinely ignored, as evidenced by the thousands of fans who actively and voluntarily buy and sell tickets every day on the secondary market through websites like Craigslist, Stub Hub, Seat Geek and eBay.

However, Michigan’s outdated ticket law has stifled the growth of local businesses that would gladly compete against out-of-state and national ticket resellers.

Fortunately, proposed legislation in the Michigan House (Bill 5108) seeks to overturn the arcane ticket law and would allow natural market forces to set ticket prices on the secondary market. To deny a free-market system built around capturing the best price possible for goods or services would be, well, completely un-American. And it’s an affront to what we all recognize as a basic economic right — the right as buyers and sellers to engage in voluntary market transactions without unnecessary interference from the government.

If Beyonce is performing at the Fox Theater or the Tigers are in the MLB playoffs, — events that are in high demand because they promise plenty of memorable moments — Michigan ticket owners should be allowed to buy and sell their tickets at prices that are market determined and mutually agreeable, and not regulated by government price controls.

The House bill would bring Michigan in line with the rest of the country and create a fair and open secondary ticket market. Thirty-five other states have already repealed laws that restrict ticket resales.

It’s a basic economic fact that tickets are sometimes exchanged at face value, and in other cases buyers and sellers voluntarily agree to prices that are either above or below face value. In all of those cases, market forces establish the ticket’s true value and it is past time that buyers and sellers in Michigan are allowed to legally engage in voluntary ticket transactions, and in a forum where consumers have ample choices and are afforded basic protections.

Whether it’s buying or selling a car, house, an old baseball card or a rare coin, we’re always trying to get the best deal possible in a transaction, and those voluntary exchanges are the very foundation of a market economy. It’s time to put needless ticket resale restrictions aside, end the victimless crime of “ticket scalping” and stop wasting law enforcement resources on an outdated regulation.

Mark J. Perry is a professor of economics at the Flint campus of the University of Michigan and a resident scholar at the American Enterprise Institute.

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