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Ticket speculation is big business. Fans want to buy tickets within their means, while scalpers want to get the highest value for tickets. These competing interests can mean disruption of the primary marketplace, particularly with the advent of online ticket speculation.

In Canada, scalping on the street raised the ire of professional sports organizations, who felt that it was bad for business. In Toronto Blue Jays Baseball Club v. Tri-Tickets Inc., [1991] O.J. 2002, the Jays attempted to obtain an injunction against a ticket resale outfit known to be scalping tickets in contravention of conditions applying to the tickets.

The conditions provided that ticket holders agreed to observe all applicable regulations and by-laws, and could be refused admission or removed from the event if they did not, without compensation. Tickets specified they could not be resold at a premium.

The court refused the injunction. Tri-Tickets had acted in contravention of the ticket-front conditions, but the Jays could show “no tangible loss”, particularly against the backdrop of revenues from more than four million fans.

Demonstrable damage as a prerequisite for this type of injunction may mean that event organizers cannot stop online ticket speculation any more than they could in-person resale. When an event is popular, primary revenues burgeon alongside resale revenues. On the other hand, individuals who purchase from scalpers may lack the financial means and legal position to seek relief, preferring to attend the event and hide the sting of paying above face value.

Since Tri-Tickets, the electronic marketplace for scalped tickets has exploded. Sources say the U.S.-based resale of sports and entertainment tickets is a $10 billion business, with online sales making up $3 billion, and rising, annually.

The parent company of at least one large ticket sales company purchased a secondary marketplace online ticket sales company. This incensed the ticket-buying public, who speculated that the primary market organization might preferentially sell to their secondary marketplace compatriot.

Both companies maintain that they keep separate operations. The primary seller continues to use security measures designed to quell automated mass purchases, and to stagger timing of release for tickets. Notwithstanding these techniques, popular events sometimes sell out in mere minutes.

In the U.S. decision Ticketmaster v. RMG C.D. Cal. 10/16/2007, Ticketmaster obtained an interim injunction against RMG, a company that sold software that would automate ticket purchases through the Ticketmaster website, thereby creating a shortage for individual consumers. RMG argued that Ticketmaster was not harmed by automated sell-outs, because Ticketmaster received full revenues.

On a different analysis than that in Tri-Tickets, the court held that there was demonstrable harm to Ticketmaster through loss of consumer goodwill and potential loss of business due to the perception that the situation was unfair to individual buyers. Such an analysis may permit civil injunctive relief to form one control on disruption of the marketplace by automation-assisted scalping.

In addition to injunctive relief, some legislatures have tried to regulate scalped ticket sales. In Tri-Tickets, the court reasoned that an injunction was not warranted because there was a quasi-criminal statute governing the scalping conduct. In several provinces, such legislation does not exist and so would not bar the availability of civil relief, if evidence of damage could be shown.

Alberta and Manitoba have legislation making the sale of such tickets an offence punishable by a modest fine. Ontario’s Ticket Speculation Act provides that anyone who sells tickets above face value can be slapped with a fine of up to $5,000. The Act also captures those who purchase or offer to purchase such tickets.

The maximum fine may not be enough to deter scalpers, given sporadic enforcement of the statute, and potential profits in this secondary marketplace. Several provinces, including B.C., do not have such statutes at all.

Online ticket speculation has benefits to consumers. When facilitated through reputable sites, it can mean that tickets are available for tourists and procrastinators. Perhaps as a gesture to the tourism value, Ontario’s Ticket Speculation Act provides for some sanctioned resale of tickets, by specific agents, at small premiums over face value.

Online secondary ticket sellers contend that their services improve on that of the street-side scalper. Guarantees that the ticket will be genuine, and built-in remedies against the ticket broker are designed to protect consumers against counterfeiting. Such brokers do not hold an inventory of tickets, but merely bring together buyer and seller (presumably to get around legislation making it an offence to sell).

With Vancouver’s 2010 Olympics around the corner, there have been calls for further regulation of the ticket resale industry. Canadian scalping to date has been the subject of an under-enforced potpourri of measures, with online innovation outstripping controls.

In light of that, Olympic organizers may consider government assistance in providing specific, time-limited powers, or may turn to self-imposed steps such as dynamic pricing and lotteries to stem this online trade.

Julie Gibson is an associate with Harper Grey LLP in Vancouver, practising commercial and civil litigation and administrative law.