General Scheme of Sale of Tickets (Cultural, Entertainment, Sporting And Recreational Events) Bill 2020: Discussion

Written submissions on the general scheme of sale of tickets (cultural, entertainment, sporting and recreational events) Bill have been received from a large number of stakeholders which have been circulated to members. Today, the committee will hear from the Department of Enterprise, Trade and Employment on the Bill. I welcome Mr. John Newham, Ms Clare McNamara and Mr. Bill Cox, who are joining us remotely.

I must explain some limitations in parliamentary privilege and the practice of the Houses regarding references witnesses may make to another person in their evidence.

Witnesses who are physically present or who give evidence from within the parliamentary precincts are protected pursuant to both the Constitution and statute by absolute privilege. Witnesses and participants who give evidence from a location outside the parliamentary precincts are asked to note that they may not benefit from the same level of immunity from legal proceedings as a witness giving evidence from within the parliamentary precincts.

Witnesses are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way to make him, her or it identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of that person or entity. If statements are potentially defamatory in relation to the identification of somebody or an entity, they will be directed to discontinue their remarks. It is imperative that witnesses comply with any such direction.

I invite Mr. John Newham to make his opening statement.

Mr. John Newham

I thank the Chairman and the committee for the opportunity to discuss the scheme of the sale of tickets (cultural, entertainment, sporting and recreational events) Bill. Along with my colleagues, we very much welcome the opportunity to contribute to the committee’s scrutiny of the scheme and to assist it in any way we can.

In terms of the background to the Bill, it is useful to recall some important milestones. In response to growing public and political concern over the resale of event tickets for a multiple of their original sale price, our Department and the then Department of Transport, Tourism and Sport launched a public consultation on the issue on 20 January 2017. On 31 January 2017, Noel Rock and Deputy Stephen Donnelly introduced a Private Members’ Bill, the Prohibition of Above-cost Ticket Touting Bill 2017. On 1 March 2017, the Sale of Tickets (Cultural and Sporting Events) Bill 2017 was introduced by the chairman of the committee, Deputy Quinlivan. On 24 July 2018, the Government agreed to support on Second Stage the Private Members’ Bill introduced by Noel Rock and Deputy Stephen Donnelly and approved the drafting of a several amendments to it. The Bill then lapsed upon the dissolution of the Thirty-second Dáil.

All the Bills had, at their hearts, provisions to ensure fans were treated fairly. That overriding objective is carried through into this scheme of the Bill. The scheme now under scrutiny by the committee was approved for drafting by the Government on 29 September 2020. While it has its origin in the Private Members’ Bill supported by the previous Government, it differs from it in a number of respects.

I am limited to five minutes so please excuse me for not going through the scheme provision by provision. Instead, I will summarise. The scheme aims to promote fairer access to event tickets by prohibiting the sale, or advertising for sale, of tickets for a price exceeding the original sale price for events taking place in designated venues with a capacity of 1,000 or more. Applications for designation would be made by the operators of venues of this size who reasonably expect the venue to hold events that may give rise to above sale price resale. The Minister would also have a reserve power to designate venues, including venues with a capacity of less than 1,000, that have not been the subject of an application for designation. This approach of applying the prohibition to events in designated venues has been taken for two reasons. First, above-face-value resale affects a small proportion of events and it is good practice to limit regulation to where it is necessary. Second, the prohibition on above sale price resale can be more effectively monitored and enforced if it applies to events in a list of known venues.

Requiring primary ticket sellers to indicate if a ticket is for an event in a designated venue and secondary ticket sellers to indicate the original sale price of event tickets also assists enforcement. The prohibition would not apply to authorised ticket sales held to fund the activities of charitable organisations and amateur sports clubs. The ban on above-sale-price resale affects property rights so it is balanced by a prohibition, with some exceptions, of contract terms that preclude ticket holders from selling a ticket for a price at or below the original sale price. In line with a commitment given by Government to UEFA, the unauthorised sale of tickets for matches during Euro 2020 is prohibited.

Other provisions deal with the powers of the Garda Síochána to enforce the provisions of the legislation, offences and penalties and defences, including the defences relating to secondary ticket marketplaces necessitated by the electronic commerce directive. It was intended to include a prohibition on the use of bot software to purchase tickets, but a provision of this type now forms part of an EU directive and will be implemented along with the other provisions of the directive in the scheme of a Bill to be submitted to Government early next year. Of course, the development of this scheme arose during the Covid-19 pandemic. While we hope that it may be possible for events to take place without restrictions in the not too distant future, the need to control the spread of Covid-19 may require attendances to be limited for some time. Limitations on attendance might increase the competition for tickets and could create both incentive and opportunity for the resale of tickets at inflated prices. The proposed Bill will help ensure that this does not happen.

To conclude, the approach recognises that profiteering enriches opportunists with no interest or involvement in music or sport at the expense of sports and music fans, sporting bodies, artists and promoters. We are happy to discuss the provisions of the scheme in more detail and to respond to questions from members of the committee.

I will invite members to discuss the issue with the witnesses. Each member will have seven minutes in the first round before we go into a second round. I call Deputy Bruton.

I welcome Mr. Newham and his team. Why does he not have a margin of plus or minus in order that there could be flexibility in responding to disappointing demand for a concert or whatever? Consumers in particular would benefit from below-cost selling of tickets that were not moving. Is he creating something very inflexible in this? Second, what does face value mean in the digital world? People can change the face value almost at will, so how will it be possible to keep track of what represents face value?

The committee has received a representation from a company called Viagogo, which is based in Limerick. That company is engaged in market facilitation in respect of events. What it is trying to secure is market clearance so that, like Ryanair, every seat is filled, so to speak. It has flexibility to try to fill all the seats. Will that business model go with this, and what would be the consequences?

Does designation envisage opt out? Could venues decide that they are not going to apply this and get some type of agreement from the Minister that they will opt out?

My final question is on the effectiveness of enforcement. It is widely alleged that appointments with the immigration service are being auctioned on line and it seems to persist. I am sure it is already unlawful, but enforcement appears to be difficult against online operations such as this. What are the procedures for enforcement in such a fluid environment as that relating to the Internet?

Mr. John Newham

I will take the questions in reverse order and introduce my colleagues to deal with some of the details. To begin with enforcement, the provisions in the Bill introduce the ability for fans or any person to make complaints to the Garda when they see online resale of tickets at inflated prices. There is an opportunity for them to make their complaint and for the Garda to act appropriately.

Regarding the question about designation, I take the Deputy's point. However, it is generally in the interests of venues and promoters to opt in. After all, they are generally part of the cohort of people who do not want the tickets to be resold at inflated prices. Of course, some venues may opt out if they do not foresee having concerts or the like that they believe would fall under this scheme. There are provisions in the legislation for the Minister to designate.

I will ask Clare McNamara to answer some of the other questions.

Ms Clare McNamara

I will start with the question about why there is no margin. One of the Private Members' Bills that preceded this Bill included a 10% margin. In other words, allowing tickets to be sold for 10% more than the face value. Ultimately, we believed it was much simpler to just deal with the face value of the ticket. It would make it more complex to introduce the concept of a margin.

In the context of face value in a digital world, that is an interesting point. It is certainly one we can examine, but I do not believe even digital tickets are easy to tamper with in terms of changing the price on them. This issue has not been raised with us previously so we are happy to look into it as part of the drafting process to see if it is possible. I do not believe it is possible, but we can talk to promoters and the industry to see if it would be feasible.

We are aware that this is the business Viagogo is in. Viagogo has reduced its workforce quite significantly over time. It reduced its global workforce by approximately 60% this year, which is probably linked to Covid. Is this business model going to go? One of the ramifications of this legislation is that this business model will certainly be a difficult one if it is going to stay in the business of selling tickets at above the face value price. I hope that has covered the Deputy's questions.

That has covered my questions. However, there appears to be some value in market clearance operations. Obviously, Ryanair has made its mark by being able to deliver lower cost by having this model of flexible pricing and so forth. What analysis has been done of the costs and benefits of getting rid of that type of market clearance approach?

Ms Clare McNamara

I defer to my colleague Mr. Bill Cox to respond on that.

Mr. Bill Cox

There is nothing to stop somebody selling a ticket at or below the original sale price. To that extent, we do not believe this Bill will impede market clearance. The Bill simply says that one cannot sell the ticket for more than the original sale price. It does not use the term "face value". It prohibits a resale above the original sale price, which is the price for which the ticket or ticket package was originally sold by the primary ticket seller. We believe there is a lot of inbuilt flexibility. On secondary ticket marketplaces currently, a quarter to half of tickets are probably sold at or below the original sale price.

Forgive me, but I thought that in the presentation there was some reference to banning below-cost selling?

Mr. Bill Cox

No. I think there is a misunderstanding there. The contract terms for some events in the past have said that ticket holders cannot sell their ticket at below the sale price. In the Bill we are saying that those contract terms should be prohibited and that there should be no restriction on the ability of people to resell a ticket at or below the original sale price.

Mr. John Newham

I am sorry Deputy, I am reading again what I have just read out. It is unclear but it is actually with regard to intervening with the contractual conditions around the ticket price and removing the ability of the promoters to exclude a resale at a lower ticket price, as part of the contractual terms.

I thank the officials very much for being here today. How will the legislation impact dynamic pricing, or vice versa? Will that still be allowed, possibly? Will the officials give us a definition of what they understand dynamic pricing to be? How will the legislation affect season tickets, group tickets and multiple event tickets? Deputy Bruton referred to the offshore websites. This issue has arisen in other areas also. Will enforcement be possible if it is offshore? What is happening in other European Union countries in this regard? Is similar type of legislation in force in other jurisdictions? On the multiple venue events that are owned by one owner, such as the GAA for example, will each one be designated separately? A lot of this also has to do with greenfield sites that are used for festivals and so on. Is it the owner of the site or the organiser of the event who would be the person responsible? Will event organisers be able to cancel tickets sold on secondary markets?

Ms Clare McNamara

I thank Deputy Stanton. I will try to work my way through the questions. There is nothing in the Bill that will stop dynamic pricing because that is a matter for the primary ticket seller. The Bill seeks to stop the secondary resale of tickets at a price above the original sale price. Dynamic pricing is set by the primary seller and there is nothing in the Bill to stop that. In the context of multiple event tickets or season tickets, the same applies. There is nothing in the Bill that prevents the sale of tickets for multiple events or seasonal tickets by a primary seller. Again, the Bill seeks to stop the resale of those tickets at a price above the original sale price.

On the enforcement and offshore websites, we are aware that this is a complex area. There is no doubt that the borderless nature of the Internet makes it very difficult to enforce restrictions on online activity, such as those in the Bill against businesses or individuals based in other countries. Deputy Stanton asked about legislation in other EU member states. I believe a small number of member states have similar legislation in place. Having spoken with officials in those countries and in EEA countries that prohibit or limit the resale of tickets above the original price, they have all acknowledged that while their legislation was reasonably effective in curtailing such resale within their national borders, it was less effective when it came to preventing resale by secondary sellers in other countries. It is a really complex area. There are other ways of dealing with it such as under the unfair commercial practices directive, which makes it a prohibited commercial practice to state or otherwise create the impression that one is selling something legally when it actually cannot be sold legally. This provision was used by the Norwegian authorities to prosecute a Norwegian reseller for selling tickets to the London Olympics, in contravention of the London Olympic Games and Paralympic Games Act 2006. The prosecution was appealed but it was upheld by the Court of Justice of the European Free Trade Association, EFTA, in December 2019. That, however, is a complex way of enforcing it. We recognise that this is not going to be an easy one to enforce when it comes to dealing with offshore sales.

The Deputy also asked about greenfield sites such as those for festivals. The organiser of the event is responsible for the sale of the tickets and is the primary seller. I am not quite sure that I understood the Deputy's question on multiple venue events.

I might come in on that again. I meant, for instance, how the GAA owns more than one venue. Is each venue designated or how does that work?

Ms Clare McNamara

It would be each venue. If the GAA, for example, has applied for designation of the venues, then they are on the list of designated venues and the Act would apply to them.

Are there implications for private property rights in the legislation? Perhaps the officials will let us know what their understanding of dynamic pricing is. As I understand it, this has to do with demand in the market and that the primary seller can adjust the price of the tickets up or down depending on the demand. Is this going to be difficult to manage, monitor or control with legislation such as this, especially if the prices keep changing? I am aware that it is different with airline tickets, where dynamic pricing happens all the time. Could something similar happen with venues? How will that aspect be managed if the price can keep changing depending on demand?

Mr. John Newham

With dynamic pricing, what promoters do is generally not as fluid as that. Promoters will offer different tickets that entitle the concertgoer to a different quality of experience at the venue, whether it is additional food or access nearer the stage and so on. The key thing with those tickets is that they are sold at a specific price and a tiered pricing system. It would be very unusual for promoters to have a computer system that changed the price of seats depending on the pattern of demand, for example as in the case of an airline like Ryanair. Normally, for concerts and venues the dynamic ticket pricing is around segregating the range of tickets at different prices for different experiences at the venue. That situation presented by the Deputy generally, to the best of my knowledge, would not arise.

My final question was on private property rights.

Ms Clare McNamara

Ultimately, the rights a person has under a contract are property rights, which are guaranteed under the Constitution. We are satisfied that the prohibition on above-sale-price resale of tickets is a justifiable and proportionate restriction on the right of ticket holders to sell tickets at a price above the original sale price. This is why we have sought to balance that restriction with the provision prohibiting the contract terms that prevent a ticket holder from selling below the sale price. As my colleague Mr. Newham said earlier, some event organisers would have done that in the past whereby part of the contract for the ticket prevented the ticket holder from selling below the original cost. We felt we needed to balance this issue by preventing that from happening, except in very exceptional circumstances.

I thank the witnesses for their presentations and their work on this issue. Why have they gone for the approach of designated venues with a capacity of 1,000 or the Minister deciding? Why not just say outright, across the board, that people cannot sell tickets above the original purchase price, full stop? There would then be clarity for everybody involved.

Ms Clare McNamara

That is a good question. I will deal with the designated venues aspect of it first. This approach has been taken principally for the reasons set out in Mr. Newham's opening statement. First, the evidence available to the Department suggests that above-sale-price resale affects only a very small proportion of the thousands of ticketed events that take place in a normal year, so it is good regulatory practice to regulate only where it is necessary. Second, the monitoring of compliance with this legislation would be much easier and more effective if the prohibition on above-sale-price resale prices applied only to tickets available in a publicly available list of known venues. On the balance of looking at administrative burdens on businesses, it is worth noting that the Act will impose certain information requirements on the primary ticket sellers and it would be disproportionate to require small venues to comply with those requirements, especially given that they might never host any event that gives rise to above-sale-price resale.

On the threshold, the evidence available to the Department suggests that above-sale-price resales occur wholly or mainly in venues with a capacity of 1,000 or more. A small number of venues with a capacity below that threshold might occasionally hold events that see some level of resale. That is why head 17 of the Bill provides that the Minister can designate a venue which has not been the subject of an application for designation. That is intended to cover venues with a capacity below 1,000 as well as venues with a capacity above that figure where the operators have not applied for designation. I hope that answers the Deputy's question.

I have a follow-up question. Let us say that I am a venue operator and I have a venue with a capacity of 950. Why can I not at least apply for designation? Such venues are currently only covered by the last head to which Ms McNamara referred, which is the same one that allows the Minister to decide to cover a venue with a capacity of 2,000 even if there has not been an application. Why not allow a provision whereby someone could apply for designation in any case?

Ms Clare McNamara

I will defer to my colleague Mr. Cox to answer that question.

Mr. Bill Cox

We did a survey of venues and capacity and we did not find that many with a capacity close to 1,000 that, to our knowledge, give rise to events that feature some level of resale. Once one goes with a designation provision there has to be some threshold and we felt, on balance, that 1,000 was the most realistic figure, with a back-up provision for the Minister to designate venues below that capacity. This is ultimately a judgment call and we feel this is a justifiable approach but we will take on board the Deputy's point and give some consideration to permitting venue operators with a capacity below that threshold to apply.

Mr. John Newham

As a practical step, such a venue owner could request the Minister to designate. The Minister would then designate upon that request if he or she so decided.

Would this apply to season tickets and so on? Let us take a football season ticket, which is for multiple events happening at 20 or more different venues. Would this measure apply there or does that create a complication?

Ms Clare McNamara

It would apply because the season ticket is sold by the primary seller. What this legislation prohibits is the selling on of that ticket by a secondary seller at a price above the original sale price.

Maybe this is a hypothetical situation that does not exist in reality but what if, of the 20 venues the season ticket covers, 18 are designated but for some reason two are not? They could be very small stadiums. Would that create a complication? Is it the case that as long as one of the multiple venues covered by the season ticket is designated it would be covered?

Mr. John Newham

That is an interesting question and we would need to think about it a little bit. One of the factors we need to consider is what the likelihood of such a situation is. A set number of tickets would have been sold to a set number of people and not all venues are capable of dealing with that number. We will consider that angle.

The unauthorised sale of tickets for matches during Euro 2020 being prohibited was mentioned in the opening statement. I presume that is separate from this legislation. Was that covered by primary legislation or secondary legislation?

Ms Clare McNamara

It is covered in this Bill. There is a provision specifically covering Euro 2020.

I thank the witnesses.

I thank our guests. I am one of many parents who have been frustrated over the years with young children going to music events and so on. If people are not fortunate enough to be able to purchase tickets online in the early draft they end up going to the secondary market and get scalped for tickets. At sports matches, how is it that so many ticket touts can lay their hands on tickets when supply is tight and when members of the general public cannot get them? While the aspirations of this Bill are laudable and to be commended, there is a danger in getting into a market where supply and demand is at the core. If we could have very visible supply, we would then control the possibility of scalping and retail extortion by secondary selling. How have the witnesses looked at ticket touting and how ticket touts have been able to get tickets for sporting occasions and concert events, particularly in Dublin?

Ms Clare McNamara

I mentioned this at the very start and Mr. Newham covered it in his opening statement. First, the research we have done into this matter shows that there are actually very few events in which above price ticket resales happen. Those would be events or concerts by very popular artists, for example, but the percentage is very low. In many cases, ticket touts get their hands on the tickets by going online and buying them with the specific purpose of reselling them, but ticket touting can take many forms. Some people make a business of this and make millions. There was a case in Leeds last year of two people who had made something like £3.5 million over a two-year period just through ticket touting. There are also people who do it on a small scale. In some cases people purchase tickets for an event but cannot go and then use the opportunity to try to sell those tickets at a higher price. What we are trying to do in this Bill is prevent that secondary selling at a price above the original cost, as best we can.

Primary tickets are largely offered and bought online. There are very specialist software programmes and bots that are being used to block buy tickets. A large amount of tickets that end up in the secondary resale area have been bought for that purpose. What has the Department proposed on this? How will the legislation cut across this process because it seems to be the main area where the secondary extortionate selling is taking place?

Ms Clare McNamara

That is a very good point. We are aware that bots are used to buy tickets. We had originally included a bot provision in the legislation, however in November 2019, the European Union adopted a directive in the consumer rights area about better enforcement and modernisation of consumer rights legislation. The directive says member states must adopt a bot provision. As there are additional requirements applying to the provisions of EU consumer protection law in areas such as consumer protection co-operation and on penalties which do not apply in the provisions of purely domestic legislation, we felt it was preferable to include the provision on bots in our transposition of that directive. We will come to the Government with a scheme of the consolidated consumer rights Bill early in the new year. That will cover the bots provision and the organised purchase of tickets via bots.

Further work probably needs to be done in that area before this legislation is pushed through, particularly because of its effect on a company such as Viagogo.

Tickets are sold in short tranches to try to slow down the roll-out to create the idea that there is an unknown quantity. Is there anything in the legislation to force transparency so that people know how many tickets are circulating unsold before events? That is a major market driver which is being used by people selling on secondary websites to inflate prices.

Mr. John Newham

Especially in large events, the practice is that promoters might see what demand is. They may book a venue for one night and find the tickets sell out, and put on another night and sell out and then put on another night and find that they have only reached half capacity. It is not always apparent from the outset what promoters' intentions are in those large events. The transparency that the Deputy seeks might not be possible in the business context. I do take his point. Returning to the Deputy's first point, there is a palpable sense of unfairness if one is a fan and one sees these ticket are available but they are unable to get their hands on them. Where the Bill addresses this is that those tickets will be available but not at inflated prices.

I understand largely where the Department is trying to go with the Bill. I am concerned, as I am sure are other Deputies, about interfering in supply and demand. It will cut across the business model of some of the secondary sellers.

How will foreign websites and domains be controlled from trading in tickets under the legislation? In the case of ticket touting on the road outside matches and so on, do the officials honestly believe there will be enforcement to stop that?

Mr. John Newham

For selling outside matches and large events, the enforcers - the gardaí - do attend those. If anyone comes across a ticket tout who is selling at an inflated price, there probably will be a garda nearby to complain to.

I have been at many matches. I do not think that I have ever seen a garda challenging a ticket tout and I have often seen ticket touts scalping tickets quite openly close to gardaí.

Mr. John Newham

I do not disagree, I have been there myself. This legislation will give the powers to An Garda Síochána to make that challenge.

I also raised foreign domain websites which can trade in tickets.

Mr. John Newham

That is a challenge and one which other EU countries which have introduced legislation of this nature have encountered. It is something we need to consider a little more. Unfortunately there is not a lot one can do about foreign companies selling these tickets. There may be something that can be done around greater publicity so that people do not find they face problems gaining access when they arrive.

Ticket sales are becoming more sophisticated. There is much more use of electronic tickets where the promoters or venue operators can check the tickets as people enter. The market is becoming more sophisticated, especially for international concert goers or fans who are becoming more aware that they may encounter problems accessing the venue if they buy from secondary sellers.

I introduced a Bill in 2017 on this. The matter is one of great concern to me and I did a lot of work around the issue.

Will the officials confirm that a condition of Ireland's Euro 2020 bid was that ticket touting legislation would be enacted? When is the deadline? It is bizarre to be talking about Euro 2020 at the end of December but it has been a bizarre year. When does the Department envisage that Ireland will be compliant with UEFA's request?

Ms Clare McNamara

UEFA has indicated that Euro 2020 will now be held in June or July 2021, but will still be known as Euro 2020. Our deadline is for it to be in place before those tickets go on sale. Our Secretary General gave a commitment in March, or rather restated the commitment previously given, that we would bring in the legislation in time for the sale of those tickets. That is why this is a piece of priority legislation for the Government.

If the games are going ahead in July, I assume the tickets will go on sale much earlier. When does the Department intend to have the legislation in place?

Ms Clare McNamara

It is priority legislation. We have been working very closely with the drafters since the Government approved drafting this as a piece of priority legislation at the end of September this year. We would be hopeful to come to Government seeking publication of the Bill very early in the new year.

The issue of bots has been raised and the officials have addressed it. I was concerned about it being left out of the Bill but the directive is coming down the line. Are the officials happy enough that the EU directive will cover it and be in time?

Ms Clare McNamara

Yes, we are happy. The bot provision in the directive is very similar to what we would have included in the legislation.

In fact, the bot provision in that directive is very similar to what we would have been including in this legislation. The only difference is that because it is part of consumer rights legislation, it is stronger in respect of penalties and co-operation with other member states, but we are confident that the bot issue will be covered. We expect to go to Government early in the new year with the general scheme of that Bill.

I have a final question. In the Bill I proposed, it was possible for a person to resell their ticket for up to 10% more than the face value. The reason for that is because people buy tickets and genuinely are unable to attend events. For example, people may get tickets for Christmas or they may buy them and subsequently something comes up, such as a family event, and they cannot attend. The reason behind the 10% element was to ensure that in the case that someone who had bought the ticket and had genuinely intended to go to an event, did not suffer any consequences. If a person is selling a ticket on, they might have to post it to the buyer, or pay for delivery. Is there not a compelling argument for preventing those who have genuinely bought a ticket and intended to attend the event, from being left out of pocket?

Mr. John Newham

I note the Deputy's point about the costs incurred. Frankly, it was more about keeping it simple and transparency, so that, for example, if people see a price on a ticket, or are aware that a ticket for a particular concert costs €100, they know that is the price. We decided to keep it at the sale price for simplicity.

I thank Ms McNamara, Mr. Cox and Mr. Newham for attending, and the officials for assisting the committee today.

The joint committee adjourned at 11.02 a.m. until 10 a.m. on Wednesday, 16 December 2020.