StubHub has warned of a surge in on-street touting after the Ontario government passed new legislation that will introduce a price cap.
The Canadian province’s Ticket Sales Act was agreed on Wednesday as part of a wider consumer protection bill.
The legislation bans scalper bots and the marketing of tickets obtained by them in Ontario, which is home to more than 40 per cent of Canada’s population.
The ban has been welcomed by many ticketing operators, including StubHub and Ticketmaster, however there has been considerable criticism of the cap, which rules that tickets cannot be resold at more than 50 per cent of their face value.
Jeff Poirier, StubHub Canada general manager, wrote an open letter explaining why the cap will prove futile.
“Ticket resale prices will continue to be driven by supply and demand, not by arbitrarily set price caps,” said Poirier.
— StubHub Canada (@StubHubCA) December 13, 2017
“The fact is, if a venue holds 20,000 fans, but 100,000 fans want to attend the performance, ticket prices will reflect that demand,
“If the established market rate exceeds the 50 per cent cap established by government, those sales won’t stop or adapt to reflect the price caps — they’ll just occur at their true value through channels the government cannot regulate.
“It will happen on street corners where the risk of counterfeit and fraud is significant, and no guarantees are in place; or it will happen on ticket resale websites located outside of jurisdiction of the Ontario government.
“Either way — you and businesses that have invested in the province will be hurt.”
Poirier also criticised the Ontario government for dropping a ‘transparency clause’ that would have demanded that ticket sellers reveal how many tickets are for sale.
He said: “The original legislation required ticket sellers to disclose how many tickets were actually being made available for sale, a simple concept that would provide you better insight into the actual availability of tickets.
“This is the very issue the proposed legislation was trying to solve. Yet, the Government chose to remove this critical provision from the legislation, citing pressure from the live entertainment industry as a prevailing reason over establishing transparency for Ontario fans like you.
“At StubHub, we understand transparency is important across the entire ticket industry, not just in the resale market. You should be able to know how many tickets are available for an event, what your seats will look like, and how much you’re going to pay for them. Only in that circumstance can you make a purchase that you truly feel good about.”
The Ticket Sales Act also demands that sellers list all fees, taxes and service charges. Resellers are required to disclose the face value cost of the tickets in question.