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Missouri likely to legalize scalping

Monday, August 27, 2007

The Senate is expected to repeal the state anti-scalping law this week.

JEFFERSON CITY, Mo. -- If you're an avid sports fan, chances are fair that you've abetted a crime to get to a game.

Not by speeding down the highway to reach the stadium (though you may have done that, too) but by buying a ticket from a scalper.

Missouri is one of a dwindling number of states where it remains illegal to re-sell tickets to sporting events for more than face value. Scalpers can be fined $50-$1,000 and jailed from 15 days to one year, depending on how many times they have been caught.

Yet ticket scalping continues on sidewalks and Internet sites, largely because the 1989 law is difficult to enforce.

Now Missouri lawmakers appear poised to scalp the law.

The House last week voted to repeal the anti-scalping law as part of a broader economic development package backed by Gov. Matt Blunt. The Senate is expected to do the same this week, when the focus of a special legislative session shifts to its chamber.

So should sports fans be celebrating?

Or should they be shaking in their seats for fear scalpers will freely jack up their ticket prices?

Advocates of repealing the law contend there's no need to worry. In fact, they claim fans likely will pay less when scalpers can legally charge more.

Huh?

Their reasoning rests on basic supply-and-demand economics. If ticket scalping becomes legal, then more people should be willing to do it. Thus the supply of tickets on the re-sale market should increase, and if demand for those tickets remains the same, then the prices should fall.

"There will be a flood of tickets for sale," St. Louis Cardinals lobbyist John Bardgett Jr. predicted last week to a legislative committee. "When that happens, competition works -- prices get driven down."

That theme was echoed by representatives of the St. Louis Rams, Kansas City Chiefs, the Scottrade Center in St. Louis, Ticketmaster, eBay and the Overland Park, Kan.-based ticket brokering firm Ticket Solutions.

The Cardinals, for one, insist legal ticket scalping would provide a greater benefit to their fans than their front office.

But Ticketmaster, among others, acknowledges the potential to make more money. The company already acts as an original ticket seller for the Chiefs and Rams, and also hosts an Internet site allowing for the re-sale of tickets.

With Missouri's current law as a deterrent, Ticketmaster refuses to allow Chiefs and Rams tickets to be sold above face value, said Joe Freeman, a company vice president and assistant general counsel. But if the law is repealed, Ticketmaster would allow sellers using its Internet site to charge as much as they want, he said.

It's unlikely, however, that Ticketmaster would allow people to charge less than face value, because professional sports teams don't like to devalue their product, Freeman said.

Other Internet sites already offer tickets to Missouri sporting events at prices both above and below face value.

Some supporters of free-market ticket scalping point to a 2006 study by economist Craig Depken of the University of Texas at Arlington, who analyzed the average per-game season ticket prices from 1991 to 2003 for professional football and baseball teams.

Depken found that legalized ticket scalping can actually drive down prices charged by team owners. He estimated that baseball teams charge about 14 percent more when scalping is banned, and football teams charge nearly 24 percent more.

But not everyone is buying that reasoning.

"I just don't think that's an economic reality, that if you take the price restrictions off, the prices will fall," said Democratic Rep. John Burnett, of Kansas City. "That's certainly counterintuitive, and I just don't believe it."

Burnett tried to amend the economic development bill to replace the state's anti-scalping law with a new ability for local governments to limit scalpers to charging 20 percent above face value for events at taxpayer-subsidized facilities.

Republican House leaders refused to allow the amendment, ruling it went beyond Blunt's special session call for the legalization of ticket scalping at any price.

Burnett equates ticket scalping with "price gouging."

"How a repeal of a criminal statute is an economic develop tool is beyond me," Burnett said.


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