Why Ontario’s proposed ticket resale cap could make it harder — not easier — to buy tickets

Humber Polytechnic Music Business Professor Thom McKercher on the ban of resale tickets and fears that it may become another ‘rule with no teeth behind it.’

The province’s plan to protect buyers from exorbitant resale ticket prices could leave them worse off, with experts warning that banning the sale of tickets for more than face value could drive more tickets to third-party markets.

The Doug Ford government announced earlier this month its plans to outlaw the resale of tickets for more than their original value ahead of the FIFA World Cup. The premier called ticket scalpers out directly, saying their “days of ripping off are done.”

Ford first indicated he would review resale tickets after the Toronto Blue Jays’ improbable deep season run, where prices soared out of the park. Some tickets for Game 7 were listed for as much as $16,000 on resale platforms.

“When you have one player in the market that controls the tickets, that’s not right for the people,” Ford told reporters in October.

The ministry of public and business service delivery and procurement confirmed to CTV News Toronto that the government’s proposed amendments to the Ticket Sales Act of 2017 would prohibit the resale of tickets to concerts, sports, and other live events in the province for more than the original all-in purchase price. That price includes fees, service changes, and applicable taxes, the ministry notes.

“The rules, once passed, will take effect immediately and apply across all resale platforms, ensuring a consistent, province-wide approach. These changes are putting fans first,” Giulia Paikin, press secretary to the minister’s office, said in a statement.

The new framework means that if a fan bought a concert ticket for $600 and resold it to someone else for $1,200, that other person would have to resell it at the original price of $600.

‘There has to be an incentive’

But these proposed changes might do more harm to the average consumer, as it could darken the resale market by paving the way for more scammers and unregulated marketplaces, experts say.

Richard Powers, associate professor at Rotman School of Management, outlined the trickle-down effects implementing this cap would have, as it could create a lack of incentive for legitimate resale platforms, like Ticketmaster and StubHub.

“There has to be an incentive. They have to be still making a profit,” Powers said in an interview with CTV News Toronto. “Why else would they do it? … It is certainly going to push sales over to the black market, if you want to call it, or the unregulated market.”

For its part, Live Nation Entertainment, the parent company to Ticketmaster, expressed support for the changes as it is in favour of promoting “fair, transparent ticketing.”

Powers questioned how the province would monitor platforms like Facebook Marketplace and Kijiji, since the owner of those companies are based outside of Ontario.

“My point is, as long as demand outstrips supply, a viable second market will always exist, and the legislation may curb legal resellers, but it’s not going to curb the black market,” Powers said.

This could clear the way for scammers, Powers noted.

“The advantage that consumers had with the secondary market—the legal secondary market—is that it was legal and it was harder to scam,” Powers said. “Once you get into Kijiji and all those, you don’t have those protections at all.”

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The province scrapped a law in 2019 that would have limited resale prices at 50 per cent above face value, calling it “unenforceable.” Both experts CTV News Toronto spoke with questioned how the province does plan to enforce implementing these price caps.

“I mean in theory, it’s great,” Vijay Setlur, marketing instructor at York University’s Schulich School of Business, said in an interview. “What mechanisms are in place to enforce this, and find people, and deal with the violators?”

Ontario included its plans to outlaw overpriced resale tickets in its budget, revealed Thursday, where the province said it will address “longstanding concerns about unfair resale practices.”

“Recent high-demand events have highlighted how quickly tickets can be purchased and relisted at significantly higher prices,” the budget reads.

Since this legislation is included in this year’s budget, the policy will be implemented prior to the FIFA World Cup in Toronto later this summer. Setlur questioned how Ontario’s legislation would play into FIFA’s personal resale platform.

“All the ticketing has been handled through their (FIFA’s) own platform, and they also have their own resale platform,” Setlur said. “If the government is going to go into that platform, I mean, I don’t know how that’s going to work because that platform belongs to the primary channel, it’s not Ontario.”

While FIFA did not directly comment on how it will adjust its resale platform once this legislation is in place, a spokesperson said its marketplace has to adhere to local policies.

“This initiative (FIFA Resale Marketplace) is designed to protect fans from invalid or unauthorized resale/exchange and is subject to federal and local regulations, as well as the applicable terms and conditions,” FIFA said. “This initiative is aimed at safeguarding fans against invalid or unauthorized resale/exchange and is available to fans subject to federal and local regulations.”

British Columbia, who is also hosting World Cup matches in Vancouver this summer, is keeping an eye on how Ontario’s amendments play out before implementing a ban themselves on for-profit resales.

Though not a host country in the upcoming tournament, the United Kingdom announced late last year it is preventing resellers from selling tickets for live events above the original cost.

Additionally, resellers can only sell the same number of tickets that they were initially allowed to purchase. If they were limited to buying four tickets to a concert, for example, that is the same number of tickets that can be resold.

With files from CTV News Toronto’s Phil Tsekouras and CP24’s Joshua Freeman