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The Ugly Truth: Why Legacy Ticketing Companies Love Fraud

by Jeff Ianello, EVP, SeatGeek Open Partnerships at SeatGeek. After more than a decade spent working on the team and league side of sports business, Jeff joined SeatGeek to help build the future of live event ticketing.

It’s five minutes until tipoff of a sold out game when my phone rings. If you’ve ever worked in a box office, you know that a phone call right before tipoff is never a good thing. If you haven’t, I can tell you that it almost always means there’s a problem.

All too often, that problem is that fans are walking up to customer service to tell them that their tickets couldn’t scan. They purchased from one of the largest ticket marketplaces in the world, but one who wasn’t partnered with our team. We explored further and found that these tickets were double sold. In some cases, the seller intentionally defrauded users by intentionally pushing the same ticket to multiple markets. Other times, it was merely an accident or a misunderstanding of marketplace policies.

Either way, the buyers got the short end of the stick. We received angry emails the next day from the fans who couldn’t get in. Twitter was ablaze. The fans’ feelings about our club, of whom they are lifelong supporters, were tarnished. On what should have been one of the most exciting nights of the year, I was left frustrated as an executive.

When I led ticketing for the Phoenix Suns, this was an altogether too familiar experience. In a 19,000 person building, only a handful of double sold tickets may occur each game, but when it happens, a fan’s night can be ruined. Even when marketplaces such as SeatGeek and StubHub provide replacements, some of the magic of the experience is lost and both the team and marketplace’s brands can be damaged. More importantly, the prospect of a bad experience looms the next time that fan thinks about buying a ticket. Will this be the one percent chance where the tickets won’t work? This friction causes some fans not to buy tickets. When that happens, we all lose.

After the Suns, I joined the NBA league office where I worked closely with every team’s ticketing department. The NBA, like other leagues, has multiple primary ticketing companies. Each primary ticketing company has their own “preferred” secondary site. Spectra and AXS partner with StubHub, Ticketmaster owns their own resale, and Veritix uses Flash Seats. Each “preferred” reseller carries “verified” tickets. When a customer buys through one of these preferred platforms, a new barcode is created. The old barcode is no longer valid, while the new one guarantees entry.

What I didn’t learn, but what I realized when I came to SeatGeek, is that none of this has to happen in an age of APIs. APIs are the glue that hold networks together; the way that information systems talk to one another to perform functions such as displaying airfares on travel sites, processing online credit card payments, or in this case, re-issuing a barcode when someone buys a resale ticket. All the legacy ticketing company has to do is expose this functionality to more than one party.

This led me to a realization even more insidious. Ticketing companies want fraud. It is only the existence of unverified tickets that makes verified tickets a valuable asset. Barcode verification can help prop up a ticketing company’s exchange or be an asset that can be sold for millions of dollars to the highest bidder. That status quo benefits ticketing companies at the expense of fans, marketplaces, and teams. They can’t keep that secret any longer.

As I talk to colleagues around the industry, there’s a growing frustration that barcode validation is being held hostage as a way to extract money. I expect in the next three years, the pendulum will swing the other way. Leagues will mandate that all barcodes must be re-issued across every site. Fans are the lifeblood of teams. Why would a team or league want their fans to buy fraudulent tickets when it is completely avoidable?

The time has come for teams and leagues to stand up for fans and demand that primary ticketing companies give up the fabricated spectre of unverified tickets. Instead, by making use of readily available technology to verify tickets for fans – regardless of where the purchase was made – we can all help ensure that when the lights go down, or the team steps out on the court, fans who’ve put their dollar down are there to enjoy the show.