Putting an end to scalping: Why blockchain is the way forward for ticketing

Despite being a widespread issue, scalping is difficult to control — but could blockchain help?

Ticket scalping is a major issue in Australia. From sporting events to motor racing to music festivals and concerts, demand for events is so high that scalpers are getting away with on-selling tickets at exorbitant prices. And despite being illegal, event organisers have difficulty policing the issue. But it turns out that blockchain technology – the transactional technology usually associated with Bitcoin – might just be the solution event organisers have been looking for. By providing transparent and traceable pricing across sales, blockchain may be the ticket to putting an end to scalping altogether.

Earlier this year, $165 tickets to an Ed Sheeran concert in Australia were being on-sold by scalpers for anywhere between $330 to $675, while VIP tickets to a Justin Bieber concert were being sold for $2,555 - a massive 374 per cent mark-up on the original price. In sports, tickets to the recent NRL and AFL finals were selling for more than three times their original price, and upcoming Ashes tickets are already being sold by scalpers – despite having not yet gone on sale to the public. Event goers are finding it harder to buy tickets as scalpers consistently beat them to the punch, on-selling tickets to those willing to pay top dollar.

The war on scalping

Despite being a widespread issue, scalping is difficult to control. Last year, the US Congress passed legislation banning the use of scalper bots - software that buys up all the tickets as soon as they go on sale. Senator Nick Xenophon has made moves to introduce the same rules in Australia, but even if they were passed, it’s unlikely these rules would eradiate scalping altogether.

The Australian Government introduced a legislation in 2012 which allows the Government to declare certain events ‘major events’, raising the fine for scalping up to $25,000. But to date, no one has been prosecuted.

In a desperate attempt to keep fans happy, artist have tried to implement anti-scalping measures themselves. In 2009, Miley Cyrus used a 'paperless ticketing system' to ensure that only fans who had bought the tickets could get into the event. However, because many of her fans were too young to own credit cards, their parents had to come along to prove their identity. This was cumbersome, resulting in sluggish sales and putting off other artists from following suit.

This year, Glastonbury music festival has gone as far as printing pictures of the ticket holders on every ticket in an attempt to verify ownership. The problem with this, however, is the difficulty genuine ticket holders face who are no longer able to attend an event and want to resell.

Solving the trust issue

One of the biggest issues facing the ticketing industry is trust. Consumers don’t trust event organisers to ensure ticket sales are fair, nor do they trust the authorities to convict scalpers. Event goers wanting to purchase resale tickets can’t trust whether they’re buying genuine tickets, and don’t know whether they’ll be allowed into a venue with the ticket they’ve purchased. It’s such a complicated issue with so many variables, that the ticketing sector has become untrustworthy on multiple fronts. 

One of the key features of blockchain is being able to build trust across multiple parties, without having an intermediary. This is where blockchain comes in; because the key ingredient in blockchain is its ability to build trust (across multiple parties). Bitcoin’s success can largely be attributed to its implementation of blockchain to create transparent and traceable pricing. Blockchain allowed Bitcoin to solve the double spending issue, meaning a single token could only be used once, ensuring that the users of the currency feel confident in its use. It provided a legitimacy and authenticity to an unknown, alternative currency, ultimately resulting in Bitcoin’s rapid growth.

If blockchain can help legitimise an alternative currency by ensuring trust, surely the same could be said for the ticketing industry. Blockchain’s ability to identify individual tickets in the same way it can identify individual Bitcoins will help to legitimise and regulate ticket sales.

Blockchain ticketing

Blockchain technology in ticketing is already being explored. A number of companies are already implementing blockchain to help identify and verify ticket ownership through embedded QR codes or barcodes that can be scanned to easily identify ticket holders.

But where blockchain can really help to curb scalping is through setting resale limits. Event organisers can choose whether or not tickets can be resold, and also set limits on the price range for resale, ensuring tickets are no longer sold at over inflated prices. One U.S. startup is also using blockchain to prevent ticket fraud, such as hiding the barcode until two hours before the event, or until the ticket holder is within a certain distance from the venue, making it impossible to print and sell fake tickets.

Even Bitcoin is getting in on the action, having recently launched BitTicket as a means of keeping scalpers in check. BitTicket was created as a way to provide a secure and transparent system, with every ticket sale publicly verifiable on the blockchain. It also has inbuilt anti-fraud sales rules to ensure secondary sites are unable to sell tickets at inflated prices. If the resale rules are broken by secondary ticket websites or scalpers, the fraudulent accounts are frozen and the tickets are made invalid.

Ticket scalping has been a major issue in Australia for far too long. Scalpers have been making enormous sums of money on illegal ticket sales, largely because it’s been too difficult to regulate. But now, it seems technology has caught up. By implementing blockchain technology, event organisers can not only identify ticket holders more easily, but they can completely eliminate scalpers by blocking their ability to inflate prices. Because if there’s no longer a profit to be made, the business of ticket scalping simply doesn’t exist.

Kevin Griffen is the Managing Director, Australasia for Orange Business Services.  He is a member of the Orange Leadership Team Asia Pacific and his experience spans 30 years in the communications and IT Industry.

 

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