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N.C. legislators aim at ticket scams

Billy Martin didn't know he'd been scammed until he tried to get into Bank of America Stadium to watch the Carolina Panthers play the Dallas Cowboys in 2006.

The scalped tickets Martin purchased on the street were rejected at the gate as counterfeit. He was denied admission.

“We paid (more than 400) dollars to grill out some hot dogs that day,” said Martin, a certified occupational therapy assistant who lives in Nebo, in McDowell County northwest of Charlotte.

A bill in the North Carolina General Assembly, with support from the state's professional sports franchises, aims to protect consumers such as Martin. The bill would permit and tax resale of tickets on the Internet at prices above face value – a practice called scalping. The bill requires vendors to refund tickets if they are counterfeit or not delivered on time.

Despite the consumer-focused intent, an attorney with one North Carolina public interest group said the legislation would significantly decrease consumer protection.

The Senate has approved Bill 1407. The House Committee on Commerce, Small Business and Entrepreneurship voted 15-6 in favor of the bill Thursday, forwarding it to the House Finance Committee.

Legislators would like to conclude the current session by July 18, so there is time for the bill to pass the full House within the next week. But disagreement over the 3 percent tax on the difference between the resale price and face value could derail the bill.

Currently, selling tickets for more than $3 above face value is illegal in North Carolina – though many online vendors already violate that law. The new bill permits scalping online.

That would allow ticket sites such as StubHub and TicketsNow to profit legally in North Carolina. Opponents argue that legalized scalping in any form allows resellers to hoard tickets and price ordinary fans out of the best seats at the most popular events.

“North Carolinians shouldn't have to pay a scalping premium for entertainment that in many cases they're already subsidizing via tax revenue or public buildings,” said Shana Becker, attorney for the North Carolina Public Interest Research Group.

A provision in the bill prohibiting “ticket purchasing software” aims to prevent brokers from using sophisticated computer programs to gobble up huge quantities of tickets to be scalped online.

Support from the pros

The Carolina Panthers, Charlotte Bobcats, Carolina Hurricanes and Lowe's Motor Speedway support the bill. The legislation allows event organizers to opt out and prohibit sales above face value for their events if they choose.

In past years, the Hurricanes vigorously resisted the secondary ticket market. They supported attorney general Roy Cooper in 2002, when he sued brokers who were scalping Stanley Cup finals tickets.

William Traurig, general counsel for the Hurricanes and the RBC Center, said law enforcement doesn't have the resources to enforce the existing scalping laws.

The bill's sponsor, Sen. Fletcher Hartsell, R-Cabarrus/Iredell, said the Internet is so amorphous that it prevents enforcement.

Many Internet resellers scalp tickets for North Carolina events and haven't been prosecuted. The Hurricanes' Traurig said the new proposal isn't perfect but protects against bogus tickets.

“It gives people who do want to make a buck an opportunity which we're not that thrilled about,” Traurig said, “but the people who want to go (to the game) will know their tickets are going to be good.”

Duke University distributes the most coveted college ticket in the state when rival North Carolina visits cozy Cameron Indoor Stadium for basketball. Duke spokesman Jon Jackson said only that school officials believe scalping has no place in college athletics and that individual schools are best left in charge of allocating tickets.

Tears over Hannah Montana

Last fall, Lyn Peraldo was horrified as she waited in line at the Greensboro Coliseum for tickets to a Hannah Montana concert to celebrate her daughter's seventh birthday.

Within minutes the show was sold out. Peraldo saw tears in little girls' eyes and angst on the faces of parents who wouldn't be able to pay scalpers' prices.

Peraldo, who lives in Greensboro, quickly secured four tickets from online broker TicketsNow. She said she paid $225 for each ticket, plus a $125 service fee. (Face value was $56 for each ticket).

Then she filed a lawsuit against TicketsNow, claiming it violated the state's anti-scalping law. Her husband, lawyer Jeff Peraldo, sued StubHub on behalf of another client over tickets to the same concert. Both suits are pending. A StubHub spokesman said that his company acts as a third party between seller and buyer, and therefore is not liable. Efforts to reach TicketsNow were unsuccessful.

Like the NCPIRG's Becker, the Peraldos wish authorities would enforce the existing law. But Lyn Peraldo is resigned to the idea that law enforcement doesn't have the resources to make sure little girls whose parents can't afford to pay scalpers get a shot at Hannah Montana tickets.

With that in mind, Peraldo is encouraged about the pending bill.

“The legislation has addressed the main concerns,” she said.

Could prices be reduced?

StubHub corporate communications director Sean Pate said that in many cases, the secondary ticket market actually reduces prices. StubHub charges fees to buyers and sellers as a third party in online ticket exchanges.

Pate said StubHub is useful when a Bobcats season ticket holder, for example, can't attend some of the 41 home games on the schedule. StubHub allows the season ticket holder to get money for the ticket and guarantees the buyer will get into the game.

Meanwhile, the Bobcats don't lose revenue for concessions and parking for tickets that might have gone unused. The creation of a safe, secondary market has meant that tickets for some events sell for less than face value.

“The movement of this bill is an extremely positive development for fans in the state of North Carolina,” Pate said. “The previous statute … has handcuffed those who wished to sell their tickets at a market price in very much the same way they would sell their homes or their cars or their old baseball cards.”

State would get tax money

Pate declined to comment on the portion of the bill that calls for a 3 percent tax on the amount paid above the face value of the ticket. A representative of StubHub and parent company eBay argued against the tax, to no avail, in the House committee meeting Thursday.

The city of Chicago is suing StubHub and eBay for failing to collect an 8 percent amusement tax on tickets. But ticket resellers have benefited in the past few years when states such as Colorado, Missouri and New York weakened or eliminated anti-scalping laws.

North Carolina's bill is generating debate in the House. Rep. R. Van Braxton, D-Greene/Lenoir/Wayne, expressed reservations during Thursday's committee meeting.

“My big concern is that a family cannot buy tickets to a Hannah Montana concert because the scalpers have bought all the tickets up,” Braxton said. “The way this bill looks in the first place, it looks like it would enhance that … It would make it legal.”

Meanwhile, Billy Martin says he has learned after getting scammed at the Panthers/Cowboys game two years ago. He just clicks on the Internet and buys from StubHub.

Billy Martin didn't know he'd been scammed until he tried to get into Bank of America Stadium to watch the Carolina Panthers play the Dallas Cowboys in 2006.

The scalped tickets Martin purchased on the street were rejected at the gate as counterfeit. He was denied admission.

“We paid (more than 400) dollars to grill out some hot dogs that day,” said Martin, a certified occupational therapy assistant who lives in Nebo, in McDowell County northwest of Charlotte.

A bill in the North Carolina General Assembly, with support from the state's professional sports franchises, aims to protect consumers such as Martin. The bill would permit and tax resale of tickets on the Internet at prices above face value – a practice called scalping. The bill requires vendors to refund tickets if they are counterfeit or not delivered on time.

Despite the consumer-focused intent, an attorney with one North Carolina public interest group said the legislation would significantly decrease consumer protection.

The Senate has approved Bill 1407. The House Committee on Commerce, Small Business and Entrepreneurship voted 15-6 in favor of the bill Thursday, forwarding it to the House Finance Committee.

Legislators would like to conclude the current session by July 18, so there is time for the bill to pass the full House within the next week. But disagreement over the 3 percent tax on the difference between the resale price and face value could derail the bill.

Currently, selling tickets for more than $3 above face value is illegal in North Carolina – though many online vendors already violate that law. The new bill permits scalping online.

That would allow ticket sites such as StubHub and TicketsNow to profit legally in North Carolina. Opponents argue that legalized scalping in any form allows resellers to hoard tickets and price ordinary fans out of the best seats at the most popular events.

“North Carolinians shouldn't have to pay a scalping premium for entertainment that in many cases they're already subsidizing via tax revenue or public buildings,” said Shana Becker, attorney for the North Carolina Public Interest Research Group.

A provision in the bill prohibiting “ticket purchasing software” aims to prevent brokers from using sophisticated computer programs to gobble up huge quantities of tickets to be scalped online.

Support from the pros

The Carolina Panthers, Charlotte Bobcats, Carolina Hurricanes and Lowe's Motor Speedway support the bill. The legislation allows event organizers to opt out and prohibit sales above face value for their events if they choose.

In past years, the Hurricanes vigorously resisted the secondary ticket market. They supported attorney general Roy Cooper in 2002, when he sued brokers who were scalping Stanley Cup finals tickets.

William Traurig, general counsel for the Hurricanes and the RBC Center, said law enforcement doesn't have the resources to enforce the existing scalping laws.

The bill's sponsor, Sen. Fletcher Hartsell, R-Cabarrus/Iredell, said the Internet is so amorphous that it prevents enforcement.

Many Internet resellers scalp tickets for North Carolina events and haven't been prosecuted. The Hurricanes' Traurig said the new proposal isn't perfect but protects against bogus tickets.

“It gives people who do want to make a buck an opportunity which we're not that thrilled about,” Traurig said, “but the people who want to go (to the game) will know their tickets are going to be good.”

Duke University distributes the most coveted college ticket in the state when rival North Carolina visits cozy Cameron Indoor Stadium for basketball. Duke spokesman Jon Jackson said only that school officials believe scalping has no place in college athletics and that individual schools are best left in charge of allocating tickets.

Tears over Hannah Montana

Last fall, Lyn Peraldo was horrified as she waited in line at the Greensboro Coliseum for tickets to a Hannah Montana concert to celebrate her daughter's seventh birthday.

Within minutes the show was sold out. Peraldo saw tears in little girls' eyes and angst on the faces of parents who wouldn't be able to pay scalpers' prices.

Peraldo, who lives in Greensboro, quickly secured four tickets from online broker TicketsNow. She said she paid $225 for each ticket, plus a $125 service fee. (Face value was $56 for each ticket).

Then she filed a lawsuit against TicketsNow, claiming it violated the state's anti-scalping law. Her husband, lawyer Jeff Peraldo, sued StubHub on behalf of another client over tickets to the same concert. Both suits are pending. A StubHub spokesman said that his company acts as a third party between seller and buyer, and therefore is not liable. Efforts to reach TicketsNow were unsuccessful.

Like the NCPIRG's Becker, the Peraldos wish authorities would enforce the existing law. But Lyn Peraldo is resigned to the idea that law enforcement doesn't have the resources to make sure little girls whose parents can't afford to pay scalpers get a shot at Hannah Montana tickets.

With that in mind, Peraldo is encouraged about the pending bill.

“The legislation has addressed the main concerns,” she said.

Could prices be reduced?

StubHub corporate communications director Sean Pate said that in many cases, the secondary ticket market actually reduces prices. StubHub charges fees to buyers and sellers as a third party in online ticket exchanges.

Pate said StubHub is useful when a Bobcats season ticket holder, for example, can't attend some of the 41 home games on the schedule. StubHub allows the season ticket holder to get money for the ticket and guarantees the buyer will get into the game.

Meanwhile, the Bobcats don't lose revenue for concessions and parking for tickets that might have gone unused. The creation of a safe, secondary market has meant that tickets for some events sell for less than face value.

“The movement of this bill is an extremely positive development for fans in the state of North Carolina,” Pate said. “The previous statute … has handcuffed those who wished to sell their tickets at a market price in very much the same way they would sell their homes or their cars or their old baseball cards.”

State would get tax money

Pate declined to comment on the portion of the bill that calls for a 3 percent tax on the amount paid above the face value of the ticket. A representative of StubHub and parent company eBay argued against the tax, to no avail, in the House committee meeting Thursday.

The city of Chicago is suing StubHub and eBay for failing to collect an 8 percent amusement tax on tickets. But ticket resellers have benefited in the past few years when states such as Colorado, Missouri and New York weakened or eliminated anti-scalping laws.

North Carolina's bill is generating debate in the House. Rep. R. Van Braxton, D-Greene/Lenoir/Wayne, expressed reservations during Thursday's committee meeting.

“My big concern is that a family cannot buy tickets to a Hannah Montana concert because the scalpers have bought all the tickets up,” Braxton said. “The way this bill looks in the first place, it looks like it would enhance that … It would make it legal.”

Meanwhile, Billy Martin says he has learned after getting scammed at the Panthers/Cowboys game two years ago. He just clicks on the Internet and buys from StubHub.

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