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Businesses Software The Almighty Buck The Internet Technology

Paradise Papers Expose Canadian Scalper's Multimillion-Dollar StubHub Scheme (www.cbc.ca) 146

Posted by BeauHD from the behind-the-scenes dept.
An anonymous reader quotes a report from CBC.ca: When Adele fans went online to buy tickets to the pop superstar's world tour last year, they had no idea what exactly they were up against. An army of tech-savvy resellers that included a little-known Canadian superscalper named Julien Lavallee managed to vacuum up thousands of tickets in a matter of minutes in one of the quickest tour sellouts in history. The many fans who were shut out would have to pay scalpers like Lavallee a steep premium if they still wanted to see their favorite singer. An investigation by CBC/Radio-Canada and the Toronto Star, based in part on documents found in the Paradise Papers, rips the lid off Lavallee's multimillion-dollar operation based out of Quebec and reveals how ticket website StubHub not only enables but rewards industrial-scale scalpers who gouge fans around the world.

Lavallee's name appears over and over in the records, alongside the names of his wife, his father and other friends and family. The records show them somehow buying tickets from different locations around the world at the same time, placing orders from cities like Chicago, Los Angeles, London and Montreal. Lavallee, who got his start in his early 20s reselling hockey and concert tickets while living at home with his parents, now runs an international ticket harvesting operation. Financial records detail $7.9 million in gross sales in 2014 alone. [T]he CBC/Star investigation also discovered a password-protected portal exclusively for StubHub's top sellers who prove they can move more than $50,000 worth of tickets a year. The company offers them special software to upload and manage huge inventories of tickets. StubHub said in a statement: "StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets in a competitive ticket market."
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Paradise Papers Expose Canadian Scalper's Multimillion-Dollar StubHub Scheme More

Paradise Papers Expose Canadian Scalper's Multimillion-Dollar StubHub Scheme

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  • events should have a ticket lottery system (Score:3)

    by Joe_Dragon ( 2206452 ) on Friday November 10, 2017 @11:39PM (#55529523)

    events should have a ticket lottery system so that it's more fair and for some say one a year events (more so across many time zones) and it can stop the untenanted multi buys say I want to go this event but I don't know If I can be online at the time / day it's due to open so you ask some to try to get them for you but you end getting in at the right time.

    Also fixes the buy rush endless reloading game.

    • Re: (Score:1)

      by Anonymous Coward

      Nobody said life is fair. Everyone wants Capitalism, until Capitalism bites them in the ass.

      If people are willing to pay a scalper 1.5x, 2x, or 3x the face price, that just tells me that the original price was too low. And then it's unfair to the performer, who ought to be the one reaping the money from the higher ticket price. See above about life being fair.

      This is also why I don't go to concerts.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        If people are willing to pay a scalper 1.5x, 2x, or 3x the face price, that just tells me that the original price was too low.

        That's what every real estate, product or service seller is thinking -- how do I extract all the money my customer has? And it's called gouging. This is why the working class is always working; their increased income is absorbed by increases in product prices.

        • Re:events should have a ticket lottery system (Score:5, Insightful)

          by ranton ( 36917 ) on Saturday November 11, 2017 @01:54AM (#55529749)

          That's what every real estate, product or service seller is thinking -- how do I extract all the money my customer has? And it's called gouging. This is why the working class is always working; their increased income is absorbed by increases in product prices.

          It is basic supply and demand, not price gouging. Price gouging nearly always refers to essentials such as food or medicine during emergencies. Charging the maximum people will pay for a concert, which is entertainment with nearly infinite alternatives, is just basic economics.

        • Re: (Score:2)

          by fred911 ( 83970 )

          "And it's called gouging. "

            No it's not. It's called profit. Don't like it? Become a seller, assume the risks, partake in the profit or just don't buy.

  • Dutch auctions (Score:4, Interesting)

    by bidule ( 173941 ) on Friday November 10, 2017 @11:41PM (#55529527) Homepage

    It would be so easy to shut out scalpers by selling tickets through dutch auctions. If you grab them all early, you pay a big markup.

    • Re:Dutch auctions (Score:5, Insightful)

      by c-A-d ( 77980 ) on Friday November 10, 2017 @11:43PM (#55529533)

      It'd be even easier if stupid people wouldn't buy tickets from scalpers. After a few concerts with no body in the seats and scalpers on the hook for millions, the problem will solve itself.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        For every person you could possibly convince not to purchase, five more are waiting to buy. Fantasy ideas about supply and demand aren't helpful.

        If a gas station sells for $2 a gallon, and then an emergency strikes, that station will be empty even if they raise their prices to $10 a gallon. For a once in a lifetime event, most people would pay far more. It doesn't matter if it's concert tickets or emergency rations, they are a limited resource and valuable.

        It's deranged thinking that you can stop ticket

      • Re:Dutch auctions (Score:4, Insightful)

        by DontBeAMoran ( 4843879 ) on Saturday November 11, 2017 @12:54AM (#55529669)

        Spam emails still exists because they're lucrative even though "nobody" replies to these things.

        And you're asking people to NOT buy things they WANT?

      • The problem is not stupid people, is market price. If I have loads of disposable income and the opportunity to buy a ticket for double the price someone else paid that doesn't make me stupid for spending money on something I find valuable.

        The problem is that locks out poor people which isn't really a good idea either. The problem could be solved instantly by requiring ID on entry and showing the method of payment as well as the receipt.

        • Re: (Score:2)

          by Zumbs ( 1241138 )
          That has been tried. The result is droves of people being denied access, possibly because the same ticket was sold to multiple people, none of whom was the person whose name was on the ticket. If it happens enough, it might dissuade a number of people to not buy tickets from scalpers. Maybe.
      • it doesn't work that way. Multiple bands have complained that nobody shows up at their shows because the tickets have been scalped like crazy. If I can sell 1000 tickets for $10 or 10 tickets for $2000 I'm going with option b. The reason event promoters can't do that is bands don't get a cut of ticket sales unless they're so huge they can fill arenas. Bands make their money selling merchandise, so if nobody shows up to the show they lose money on the tour even while the scalpers are making bank.

        Plus the
  • This wouldn't even be an issue if the concert promoters sold tickets at actual market value.

    • Every time the issue of scalpers comes up and someone points out the obvious, that tickets ought to be sold in an auction format to find their actual market price, someone cries that high ticket prices is just another way to discriminate against the poor.

      • someone cries that high ticket prices is just another way to discriminate against the poor.

        An obvious solution would be to tax concert tickets and use the proceeds to pay for food stamps and other programs that help the poor. That way higher prices will actually be better for the poor.

    • Re: (Score:1)

      by Anonymous Coward

      They won't do that because it's an open secret that they want to scalpers to buy all the tickets and sell them at inflated prices. A show selling out fast is a good thing for them - it makes people think that it's very popular and makes people more likely to try and see future shows. Every news headline they generate about how fast their show sold out or how much tickets are going for is free advertising.

      And there's an even bigger reason - it lets them dump the risk onto the scalpers. The scalpers are doing

  • It's good to see at least one business in Quebec made a profit. And almost nobody here watches the CBC. It's just too damn boring. Even for us.

    • Re: (Score:2)

      by Strider- ( 39683 )

      Eh, CBC is about the best thing on the air, better than the tripe on Global or CTV.

      • Watching any of them is painful and makes me embarrassed to be Canadian. Have you had a lobotomy or is your remote just broken?

  • Why don't they just do what airlines do (Score:5, Insightful)

    by Solandri ( 704621 ) on Saturday November 11, 2017 @01:22AM (#55529703)
    Require the ticket user's name be printed on the ticket, and confirm your ID matches before you're allowed in.

    That the ticket sales sites don't implement such a simple solution suggests they actually like scalpers. The scalpers help guarantee an event sells out even if not all the seats are filled. i.e. The risk of a non-sellout is shifted from the ticket sales site to the scalpers, with the scalpers losing money if the event doesn't sell out, but pocketing the cash if the event does sell out. The ticket sales sites benefit from less variability in ticket sales, and thus more predictability in their income.

    • Re: (Score:1)

      by Anonymous Coward

      I think you have hit the nail on the head.

      It also explains why scalpers are allowed to have direct machine level interfaces for buying tickets.even though the promoters say they don't like scalpers.
      Scalpers are not stupid however, they will only buy heaps of tickets if they reasonably believe there will be a sellout and no additional concerts will be arranged.

      Sort of defeats the purpose of giving scalpers preferred access to tickets, it can only help on marginal sellout concerts.

      hmmm... I wonder if any insu

      • Re: (Score:1)

        by Anonymous Coward

        The economics of scalpers requiring sell out of all the tickets they buy just doesn't work. Let's run it down:
        If ticket price is $15 and I buy 1000 tickets I've invested $15,000.
        If i scalp them for $50 I could potentially make $50,000- $15,000 =$35,000
        If I can only sell 500 tickets I still make $10,000, which is still a huge profit margin.
        Scalpers don't have to care if they sell out. They don't want to get stuck with too many tickets but only selling 50% is good for them.
        If it's a really hot concert they ca

    • There are events which operate this way, and it's a major PITA. Now they have to deal with people who want to transfer their ticket to somebody else because they couldn't go; bought it as a gift; or just want to give away their ticket.

      Then there's the problem of what qualifies as an ID, especially with international events. Even reading a passport and parsing the name can be difficult for some bouncers. These guys are really not at the top of the IQ scale.

      No, I'd rather pay twice the price for my tickets th

      • Now they have to deal with people who want to transfer their ticket to somebody else because they couldn't go; bought it as a gift; or just want to give away their ticket.

        Now if only there was an easy way to deal with this, such as an authorised re-sell portal that pegs the price to the original sales price.

        There are events that operate this way too, and it costs you about a $5 service fee to transfer the ticket.

      • Re: (Score:1)

        by Choco ( 5071001 )
        If you think good security and consumer protections are a PITA, then YOU are a HUGE PITA.

      • There are events which operate this way, and it's a major PITA.

        Really? A "major" PITA?

        Now they have to deal with people who want to transfer their ticket to somebody else because they couldn't go; bought it as a gift; or just want to give away their ticket.

        Oh noes! It's a minor issue. It takes a few personnel you have to have around anyway just in case a ticket is damaged or the system isn't working correctly.

        Then there's the problem of what qualifies as an ID,

        No, that's not a problem. You just accept anything. Raising the difficulty level is enough, you don't have to be 100% sure that you've verified IDs correctly.

        No, I'd rather pay twice the price for my tickets than having to go through some draconian bureaucracy and deal with meat-heads at the door.

        Congratulations, you're in the minority.

        • I agree with this sentiment.
          >Then there's the problem of what qualifies as an ID, especially with international events.
          There is no such thing. Just fucking specify what is valid, and follow those rules. Just don't go full retard and think passports are supposed to be used for civilian identification.
          You don't even need to do it properly, anything with name on is fine so long it looks like its real plastic. If it gets to the point where scammers has to run a card printing operation, with mismatched gender

    • Re:Why don't they just do what airlines do (Score:5, Insightful)

      by nuckfuts ( 690967 ) on Saturday November 11, 2017 @05:34AM (#55530047)

      That the ticket sales sites don't implement such a simple solution suggests they actually like scalpers.

      Exactly. StubHub is owned by TicketMaster. Tickets go up for sale on TicketMaster first and get sold out in seconds. Then they appear on StubHub where TicketMaster takes another cut of the sales. They have zero interest in curtailing this.

    • Require the ticket user's name be printed on the ticket, and confirm your ID matches before you're allowed in.

      This idea has some merit but you're always going to have people who for one reason or another can't go at the last minute and the ticket shouldn't have to be burnt just because of that.

      Limiting the number of tickets one can buy is something would help and I think they do - I haven't bought tickets in a while, but I remember ticket scalpers recruiting my friends who had to physically wait in line to buy extra tickets for them. They would basically get a free ticket in exchange for waiting for hours to buy t

      • Have name printed on the ticket, require id, and force ticket sellers to reimburse you, minus a reasonable cancellation fee. They can resell your ticket to somone else at face value after.

      • Re: (Score:2)

        by Strider- ( 39683 )

        This idea has some merit but you're always going to have people who for one reason or another can't go at the last minute and the ticket shouldn't have to be burnt just because of that.

        At the same time you also allow full refunds until, say, 8 hours before the show. if someone else wants to pick up a last minute/rush ticket, they can buy it from the band/venue instead.

    • Maybe TicketMaster could implement this using the ridiculous fee they still charge, even though their business is almost entirely overhead free now that they don't need to run physical retail locations.

    • Re: (Score:2)

      by tippen ( 704534 )

      U2 did a variation of this for their 2017 Joshua Tree tour. The credit card you purchase the ticket with is your ticket. You can buy multiple tickets, but they all have to get together with you to get in.

      It's a pain for some situations, but gives fans a chance to get a ticket without having to deal with scalpers.

  • Simple solution: make tickets sold on-line non-transferable and marked with the name of the person they're for. When you buy tickets through a retail channel they have to collect a name for each ticket, which shouldn't be a problem for someone buying for a group of friends. At the door the ticket gets checked against identification and if the name doesn't match the ticket's no good.

    If the primary outlet wants to allow resellers to buy for other people, they'd have to implement a reservation system where the

  • Make them purchase in person (Score:1)

    by Anonymous Coward

    I remember reading about a band more than decade ago who was concerned about this so they limited ticket sales to in-person sales with limit of how many each person can purchase. Now it still didn't stop the scalpers from paying someone from standing on the line to buy the tickets for them but many real fans got to purchase the tickets at a list price.

  • I've no idea why shows sell tickets below the market price. Money aside, it is PITA for a top paying customer when I have to go to a reseller rather than buy the ticket directly.

    Smart show company: Cirque de Soleil in Canada. In my limited experience tickets are always available for tomorow's show, in all or most price zones, at a price of course. I've just checked tomorrow's show in Toronto, and there are seats. I am happy customer.

    Stupid company (okay, stupid in this particular aspect): Studio Ghibli muse

    • Re: (Score:1)

      by opicak ( 774121 )
      Exactly! It's funny how people try to come up with "solutions" like hunting the scalpers, requiring names etc. If the organizers would just let the market take care of this, they would have bigger profit and happier customers.

      • The market doesn't always do what the band wants, though. They want lots of their fans there, people who really want to be there. The market sucks at allotting stuff to the people who want it most, because people don't all have the same disposable income. I could casually spend a sum that would strain the budgets of lots of teenagers, for example.

  • Most of the posts above believe the artist gets to set the price of tickets.

    The artist gets paid their minimum amount when the contract is signed with the promoter. They may have a clause to get a % of the door, they may not. In many cases there is a deposit and a payment delivered to the artists before they go on stage.

    This is independent of the promoter who is on the hook for the act in question. They are responsible for paying the artist, the location of the event, and all costs associated.

    Scalpers ma

  • Which accomplishes NOTHING, since we're talking international borders.

    And, meanwhile, they put into place apparatus to assist abusers in their endeavors.

  • The companies selling tickets put no real controls in their system to stop the mass purchase & reselling of tickets. Companies without rules are enablers. After all, they just want to sell their stock and make their profit, so there's little incentive for them to change unless there are huge amounts of empty (but paid for) seats at events. These companies are the source of the problem, and it's up for them to fix it. The scalpers want to make a new market off of art appreciation, and thus resells items

  • These scumbags got hold of a bunch of tickets to a charity concert and sold them at a huge markup. None of that money went to charity, of course.

  • If I see a concert is sold out, I don't go. I also don't stand in line for movies or restaurants, because there are plenty of other options. And often, those options are still satisfying, cost less, and aren't as crowded or noisy. Movies eventually come out on DVD anyway. It's the same movie six months from now as it is in the theater. I'll admit the sound is better in the theater or concert, but I can still enjoy it. I don't have the hedonistic desire to have the 'best' experience, just to enjoy life

  • This is why I just don't go to concerts. I would like to from time to time, but it just seems like each and every person in a seat is getting ripped off. I won't subject myself and my family to that. I hope that someone things of a fair and equitable way some day.

  • Scalpers can sell their tickets at a profit. Clearly they're charging what the market can bear. If venues raised their prices to near what the market can bear and sold tickets online directly using an easy-to-use system, the profit motive for scalping would go away. Real question is, why aren't venues selling directly at more of a profit?

  • Is that StubHub's whole statement? I ask because it's very telling. Sure, they say that bots are "unfair and anti-consumer" but that its the government's responsibility to come up with a solution, not theirs. I mean, we know SubHub doesn't care about consumers but it's almost refreshing to see them admit it.

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