ALBANY, N.Y. (CN) — In a win for cash-strapped ticket buyers, the New York Senate passed legislation on Tuesday that would criminalize automated ticket-buying software.
The new law would also require ticket resellers like StubHub and Ticketmaster to clearly state the original ticket face value prices alongside resale prices, so customers know how much their tickets are being marked up.
New York Sen. Daniel Squadron, a Democrat, the bill's sponsor, praised the passage of the legislation.
"We know that when fans are pitted against bots and special interests, they never come out on top," Squadron said in a statement.
Squadron was one of two state senators to vote against extending the state's current ticket resale law earlier this month.
He co-sponsored the bill along with Republican Sen. Phil Boyle in an effort to crack down on automated ticket "bot software," which combs tickets and allows companies to buy potentially thousands of tickets within seconds.
Such software is technically illegal in most cases under the state law, but enforcement has proven lax and brings only monetary penalties. In some cases, popular music events such as recent Bruce Springsteen and Beyonce concerts sold out within minutes due to the bot software.
The bill was largely influenced by New York State Attorney General Eric Schneiderman, who has investigated the ticket reselling industry over the past year.
"Ordinary New Yorkers deserve a fair shot to see their favorite performers and teams, and protection from those that use illegal software to rig the system," Schneiderman said in a statement after the bill passed the Senate.
In a January report, Schneiderman's office suggested that more than half of all tickets to concerts were set aside for resale purposes.
The report also found that a small group of ticket brokers have been able to corner the market on certain events. In a two-year period, for example, 12 different brokers were able to purchase more than $3 million worth of tickets using various credit cards, the report found.
The proposed legislation now heads before the New York Assembly, and if it passes it would go to the governor for final approval.
Ticket reselling in New York took off after the state amended its Arts and Cultural Affairs Law in 2007 to bar venues from revoking season tickets if those tickets were resold. The amendment essentially allowed scalping, as ticket resellers were not restricted in how much they charged for ticket resales.
However, backlash over high ticket prices forced the state to change its policies again. Last week, New York Gov. Andrew Cuomo temporarily renewed the current anti-scalping laws but has called for additional protections against bot software.
Many ticket resellers and brokers, including the National Association of Ticket Brokers and StubHub, have condemned the use of bots and have lauded Schneiderman's investigation.
However, other resellers have fought back against industry attempts to cut down on scalping.
Earlier this month, a lawsuit by ticket resellers S4K Entertainment Group and J.A.J. Executive Services alleged that Madison Square Garden (MSG) "has declared war" on the industry by restricting customers to be able to purchase or control no more than eight season tickets to Knicks and Rangers games.
Account holders who exceed that number face possible revocation of their opportunity to renew their seats, the lawsuit claimed.
"MSG's about-face seeks to destroy ticket resellers by depriving them of inventory under the pretext of 'ensuring that s many of [their] valued fans as possible have the ability to purchase tickets,'" the May 5 complaint states.
A spokeswoman for MSG said at the time that the lawsuit was "without merit" and said the Garden's ticket policy was designed to give more fans access to Knicks and Rangers games.
Ticketmaster and StubHub did not immediately respond to requests for comment on Tuesday's legislation passage.
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