BUSINESS
12/13/2017 19:37 EST | Updated 12/13/2017 19:37 EST

Ontario Passes Laws Banning Scalper Bots To Protect Ticket Buyers

The law also bans selling tickets at more than 50 per cent above the original price.

THE CANADIAN PRESS/Jonathan Hayward
A Winnipeg Jets fan looks for tickets for the Jets inaugural game against the Montreal Canadiens at the MTS Centre in Winnipeg on Oct. 9, 2011.

TORONTO — Scalper bots are now banned in Ontario, as a bill to protect ticket buyers passed Wednesday, though the ticket industry warns some parts of the legislation may actually put fans at a disadvantage.

The provisions in a new Ticket Sales Act are contained in omnibus consumer protection legislation that also includes strengthening rules around home warranties, real estate practices and travel services in Ontario.

Changes to ticket selling laws include banning so-called scalper bots, which buy a large number of tickets online for an event and then resell them at a large profit.

Kevin Van Paassen/The Globe and Mail
A scalper shows off a handful of tickets he claimed were "cheaper than the box office" at a Toronto Blue Jays versus Boston Red Sox game at the Rogers Centre in Toronto on April 28, 2010.

The ticket sales and events industry largely welcomed the ban, with Ticketmaster, a major ticket seller, saying it is in an "arms race" to develop new tools to combat the bots. In North America the company blocked five billion bots last year, an executive told the legislative committee considering the bill last month.

"There are only two types of buyers: There are fans and there are cheaters," Patti-Anne Tarlton from Ticketmaster Canada told the committee. "It's no secret that there's a vast network of cheaters, both domestic and globally, who are seeking to manipulate and game our system. The goal is for them to beat fans at on-sale and to cheat fans at resale."

Ontario Attorney General Yasir Naqvi has acknowledged that enforcement may be difficult when it comes to bots that often operate from outside Canada, so he said the law aims to undercut both profit incentive and resale abilities.

"One of the most effective ways we're doing it is by taking away the financial incentive, by putting a 50 per cent cap on resale prices in the resale market," he said.

THE CANADIAN PRESS/J.P. Moczulski
Two ticket scalpers try to make a wholesale deal on tickets outside the Air Canada Centre several hours before game three of the Maple Leafs - Carolina Hurricanes playoff game in Toronto on May 21, 2002.

The law bans tickets from being resold at more than 50 per cent above the face value and makes it illegal to knowingly resell tickets that were purchased by bots.

Ticket sellers will also have to display an itemized list of all fees, taxes and service charges, and resellers would have to disclose the face value of the ticket.

Resales will be driven off of secure channels into places where consumers are exposed to counterfeit and fraud, with zero protections.Jeff Poirier, Stubhub

Ticket resale site StubHub welcomed the scalper bot ban but warned that artificially controlling a global market "will lead to unintended consequences."

"Resales will be driven off of secure channels into places where consumers are exposed to counterfeit and fraud, with zero protections," StubHub's Jeff Poirier told the committee.

Stubhub said bots are not the only reason fans have trouble accessing tickets, saying primary ticket sellers often hold back large percentages of tickets during general sales. The company took issue Wednesday with a provision the Liberal government changed in the bill that Stubhub said would have made those sales processes more transparent.

The legislation originally required ticket sellers to disclose both an event's maximum capacity and the number of tickets going on sale, which would have shown customers how many tickets may have been held back. But the government changed that to now only require sellers to disclose the maximum event capacity and the distribution method of the tickets.

Ben Nelms / Reuters
A scalper tries to sell tickets ahead of the CFL's 102nd Grey Cup football championship between the Calgary Stampeders and the Hamilton Tiger Cats in Vancouver on Nov. 30, 2014.

Naqvi defended the move as a way to encourage artists to perform at venues outside of the largest cities, citing feedback from artists and cultural organizations.

Ticketmaster's Tarlton told the committee that the initial provision would have exposed ticket availability, which could embarrass a performer who hasn't sold enough tickets.

"When people see that, they'll say, 'Oh, that's not that exciting an event. I won't take the time to go,'" she said.

Progressive Conservative Vic Fedeli said with that change to the legislation, an act that is supposed to make ticket sales more transparent has made them even less transparent than before.

When people see that, they'll say, 'Oh, that's not that exciting an event. I won't take the time to go.Patti-Anne Tarlton, Ticketmaster

NDP Leader Andrea Horwath said her party voted against the bill because it hasn't fixed all of the ticket sales problems on the government's third attempt to tackle the issue.

The opposition parties blame the Liberals for the growing online resale market because the Liberals changed their Ticket Speculation Act to make it legal to resell tickets above their original face value.

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