Residents of Michigan could soon gain the liberty to sell tickets to sporting events and concerts at a price above its face value – a currently illegal, but largely tolerated practice known as scalping. State Rep. Tim Kelly (R-Saginaw) this week introduced House Bill 5108, a measure that would repeal an 82-year-old Michigan law outlawing scalping.
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“It is great to see Michigan is finally considering opening up its ticket market to competition. So-called ‘scalping laws’ undercut the thriving and already competitive secondary ticket market. These regulations hurt both sellers and buyers by unnecessarily distorting the free market.
“The current restrictions on the sale of tickets in Michigan are bad for ticket buyers and ticket sellers.”
“Resale markets exist for all kinds of things: cars, houses, jewelry, clothing, electronics, furniture, etc. Once we’ve bought something, it’s ours. If we want to resell it and someone wants to buy it from us, we should be free to make the deal.”
“Live entertainment is a multibillion-dollar industry that has become increasingly expensive, with tickets becoming harder for fans to afford. While many ticket agencies place much of the blame on scalpers and have pushed for anti-scalping laws, the reality is that the secondary market has actually improved the ticket market by creating competition and allowing ticket sellers the ability to accurately determine prices based on demand.
“The creation of an active and competitive secondary market makes anti-scalping laws unnecessary. Before the advent of the secondary market, ticket pricing was arbitrary. Now the dynamic nature of the secondary market allows ticket sellers to determine prices on a real time basis. Dynamic pricing is a mechanism that many venues and promoters are now beginning to embrace. Lowering these barriers will allow Michigan ticket owners the ability to sell their property as they see fit while creating a more competitive ticket market.”
“The scalping laws that have been on the books in my home state of Michigan since the 1930s ostensibly protect me from paying more than face value for those Springsteen tickets at the Palace of Auburn Hills. Thank you, but no: I do not need protection from legally enforced distortions of the law of supply and demand. No one is exploiting me if I outbid that couple from Garden City for choice seats to see the Boss as I’ve made that conscious choice on my own, intoxicated only by my desire to experience rock’n’roll bliss at whatever cost I can afford to pay.”
“As I learned from my professor, Armen Alchian, in the UCLA Ph.D. economics program back in 1967, resale markets are essential to the economically efficient functioning of the markets for new goods such as housing and automobiles, to mention just two.
“Imagine a world, for example, in which homeowners and auto owners were not allowed to resell their homes and cars. There would be many fewer homes and cars produced, bought, and sold. The same is true for tickets sold for the enjoyment of sporting and other events. Whether allowing this scope for maximum liberty and utility is good or bad thing, of course, is a moral judgment. But it is a judgment founded on the principle of individual liberty, which each of us should embrace.”
“Whether a ticket to an event, once purchased, is personal property or a license controlled by the ‘host’ is a question about which legal scholars can disagree. As a practical matter, however, the market allocates scarce resources more effectively than monopoly control with monopoly pricing, and so I salute this practical nod to market economics. The sub rosa issue, though, may actually be the ability of the state to collect tax revenue on resales, so we shall see how this fares in a state whose largest city has already filed for bankruptcy.”
“This proposal should be welcomed by all who prize human liberty. Sadly the principle on which it rests is now buried under thousands of other rulings that contradict it by courts all the way to the United States Supreme Court. Maybe this will be a new beginning for at least one vital element of a free society.”
Tibor R. Machan
Professor Emeritus of Philosophy
R. C. Hoiles Endowed Chair in Business Ethics and Free Enterprise
Argyros School of Business & Economics
“Allowing legal scalping does not hurt demand for tickets. Mostly, it shifts demand as speculators buy up tickets in advance. Also, while it’s easy to see the money speculators sometimes make, on average speculators tend to make only a fair rate of return. Finally, isn’t it a good thing that the free market redistributes money from those who can afford to spend big money on tickets to the ordinary fans who will pocket the cash and enjoy the game at home or at a sports bar?”
“It is sad how infrequently government recognizes and respects our right to private property. And how often it violates it. It is heartening to see this attempt to undo its assault on this right.”
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