Feb. 19, 2010 at 9:00 AM ET
VANCOUVER -- "I NEED TICKETS" screamed the signs hanging from the necks of the scalpers, in the style of a homeless person asking for a handout or a hitchhiker looking for a ride to Manitoba. They meandered in and out of the crowd in Vancouver's Robson Square, the center of Olympic fan activities in the host city.
You've seen this scene before, but its overtness – taking place right outside the official ticket pickup location -- was striking. Scalping must be legal in Canada, eh?
I love ticket scalpers. As people they are often slimier than moss-covered rocks. But as a student of markets and consumer behavior, they provide me with endless hours of amusement. Ticket scalping is one of the purest forms of a true marketplace you'll ever find -- buyers and sellers negotiating under extreme time pressure, both saddled with limited information and high risks, bidding on a commodity that is both perishable and scarce. Fifteen minutes before game time, this market is extremely efficient.
Event holders hate scalpers, of course. They say they are trying to protect consumers from fraud. Counterfeits happen, as do lies about seat location, but given the complete anonymity of the transactions, I'm constantly amazed at the relative lack of fraud in scalping. While related, scalping (a secondary ticket market) and fraud (counterfeit tickets) are really different problems. In reality, I think promoters are just jealous. When scalpers sell tickets at well above face value, they embarrass promoters by revealing that the tickets were underpriced.
Naturally, the more amateurish the ticket buyers, and the more professional the sellers, the more money the scalpers make. And the more anonymous the transaction -- say, the more distance between hometowns of buyer and seller -- the easier it is to run a scam.
That brings us to the subject of Olympic ticket sales, which create ideal conditions for all manner of scams and overpricing. The Olympics arrive only every four years and often play out in small venues, making tickets scarce and valuable. Buyers invest an outrageous amount of money and time just to get to the scene. If they come without tickets, the pressure to get some is immense. So they usually come hat in hand to scalpers. Moreover, would-be scammers who sell for local baseball or football games have at least a small chance of seeing their victims in the future. Olympian scams pose almost no risk to the criminal, who will probably be half a world away by the time the ruse is exposed.
Perhaps the largest Olympic ticket scam in history occurred two years ago. During the Beijing games, dozens of Olympic athlete families were scammed by a Web site, estimated to have stolen millions of dollars from would-be fans.
The Vancouver Olympic Committee set out to prevent a similar debacle, using the only trick that such agencies ever consider: making money off scalping. In Vancouver, neither scalping nor exchanging tickets is allowed. Resold tickets can be "deactivated" and made invalid for events, the Olympic committee warns. It says anyone who wants to sell tickets must use the "fan-to-fan" Internet marketplace set up by the Olympic committee. The good news: tickets are relatively easy to find. The bad news: the agency makes 10 percent off both the sale and the purchase of the tickets. Even worse: High demand tickets are being sold eBay auction style. This week, opening bids for tickets to the "preliminary round" Canada-U.S. hockey game were listed as high as $10,000 -- not including the $1,000 "marketplace" fee.
So how is state-sponsored scalping doing at tamping down illicit sales? I went to Vancouver without event tickets to have a look. Knowing about the ticket troubles in Beijing, I fully expected the organized Canadians to have beaten down the business. Far from it.
'Relaxed about things'
Placard-wearing sellers were easily found, yelling like carnival barkers at the crowd, just above the child skating rink and popular free rip-cord line set up for the Games revelers. Within earshot -- heck, close enough for a body check -- were uniformed sheriff's officers (provincial law enforcement) ignoring the activity. Tickets were going for double their face value, more in some cases. The scalpers showed no fear of law enforcement. It was easy to spot the ringleader, going from seller to seller, whispering something in their ears every few minutes.
Vancouver -- a city where people say "I'm sorry" for passing you on the sidewalk -- is trying its darnedest to be friendly for the World. Volunteers in blue jackets that say "Ask me" are everywhere. So I asked. Is scalping legal?
"No. But you know, we are a bit more relaxed about those things here," said one, who for obvious reasons didn't want to be named. But he then warned me about the counterfeit ticket problem, before asking why Americans don't know where Manitoba is.
Ten minutes later, I spotted two men and a woman wearing electric yellow sheriff's jackets, standing about 20 feet from a man selling tickets. I turned my back to him, quietly showed them my press pass, and inquired: "What is the law in British Columbia?" I discovered that I'd apparently stumbled on the Canadian equivalent of the Pentagon Papers.
"You'll have to ask the by-law people."
"You can't tell me what the law is?"
"You'll have to ask the by-law people."
"What if I don't ask you as a reporter, just as a person who might buy a ticket. Is it legal to do so?"
"You'll have to ask the by-law people."
Not among my best interviews.
I was about to ask the obvious question ("What's a by-law person?") when one of them spotted a polite way out of the conversation.
"Go ask him, that guy on the bike over there."
The guy on the bike was a Vancouver city cop. He also didn't want to be quoted. But he was serious.
"It's illegal to sell anything without a permit in the city of Vancouver," he told me. "You are subject to a $250 fine and seizure of the items you're selling."
The fine hardly seemed a big risk, given the potential financial rewards, but the officer assured me that he was not to be taken lightly.
"I have about 50 or 60 tickets right here," he said, pointing to his backpack. "Some guys lost a lot of money today."
At this point, I scanned the horizon. No scalpers were in sight. Clearly, they were afraid of this cop.
He also warned about counterfeiters.
"The guys from France of Germany are long gone by the time you are at your event and can't get in," he said.
Despite this policeman's welcome clarity, my confusion over the legality of ticket scalping grew even more as the day wore on. While I was hearing about confiscated tickets, the Vancouver organizing committee was busy telling reporters that scalping was indeed legal.
"It's important for those of you who may not be from (British Columbia) to know that scalping is not illegal here," committee spokeswoman Renee Marie-Valade said at a news conference, according to a transcript provided by NBC. "So we are certainly aware that people may be selling tickets. We keep a close eye out for it."
She then went to great pains to steer prospective customers to her agency's Web site.
" The best advice to any consumer who is still looking to buy a ticket … particularly if you are thinking about buying from someone that's offering them on the street is to be very, very wary of that because that ticket may end up leaving you disappointed at the entrance to the venue," she said.
Just how big a problem are counterfeits?
Joseph Rupolo of Long Island, N.Y., said he stopped his father on Tuesday, just moments before he was about to shell out $200 at Robson Square for fake tickets to a women's hockey game. Rupolo, an intern for the NBC Olympics team, had seen legitimate tickets at the office, with their trademark hologram logo. The tickets his father was about to buy were missing the logo.
"I checked the competition schedule later that day and found that Sweden wasn't even competing against Japan that evening," he said.
He then spent the afternoon pricing tickets on Craigslist and other online sources -- which are plentiful, if risky. A man named Cory offered to sell tickets to the men's hockey semifinal for $1,000.
"I have the hard copy tickets here in Vancouver and will exchange in person at my place or at a bank. I will provide full proof of purchase and validity upon exchange," he wrote in an e-mail.
Robert Broughton of New Westminster, British Columbia, told me he actually managed to successfully buy scalped tickets earlier this week in the Vancouver suburb of Richmond, but not without a bit of agony. First, he tried to attend the women's 3,000 meter speed skating race, but prices ranged from $250 to $400 each. He headed back to the train, where a seller hard-pitched him a ticket for $300, even though the event had already started.
But over at Thunderbird Arena, where women's hockey is being played, he managed to buy a spare ticket from an "amateur" seller for face value at $50 -- after milling about for nearly an hour.
His advice: "Don't waste your time talking to professional scalpers, especially ones with thick English accents. Their sole objective is to cheat you."
Yes, many scalpers are pros. In fact, Broughton recognized some of the sellers from 1994, when he attended the Lillehammer, Norway games.
For obvious reasons, there is no good data on the amount of scalping at Olympic Games, and no way to know if Vancouver is doing better or worse than other games. With 1.6 million tickets for sale this time around, there's plenty of opportunity for mischief – and last-minute ticket purchases. It's quite clear, however, that the Vancouver Olympic Committee's efforts to stamp out fraud and scalping by profiting off of it have not been an unqualified success.
Houston-based attorney Jim Moriarty, who was a ticket scam victim in Houston, now runs a Web site called Olympic Ticket Scam. He blames continued ticket problems on the International Olympic Committee's convoluted process for purchasing tickets and the fact that it makes tickets so scarce that athlete family members have trouble getting into events.
"There is a Code of Points used in the judging system for gymnastics. Where is the Code of Ethics for ticket distribution?" he asked in a recent post on his Web site. "There are volumes of rules and regulations for each Olympic sport; for judging; and for procedures. ... The specifics for distributing tickets? Not so clear."
Broughton, the Canadian fan who bought tickets from scalpers, also complained that Olympic tickets are kept artificially scarce, with many going to corporate partners, leaving few for local fans and travelers. As evidence for his complaint, he pointed to empty seats at many events.
"After the game started, there were at least 500 empty seats at a supposedly sold-out event," he complained. "I'm still steamed about all the empty seats at the women's ice hockey game on Sunday. I would love to hear a reporter ask the' People In Charge' who holds these tickets, so that we all know that they were inconsiderate enough to leave them in a desk drawer."
Reporters did ask Marie-Valade about the empty seat problem. She said the committee had a "ticket SWAT team" looking into the problem, and offered this explanation.
"It's a complex environment because we have tickets that are sold to the public. Typically, what we are seeing is those seats that are sold the public are being used. Some of the blocs that you are seeing may in fact be not used through a variety of different programs that we have," she said. "We have an obligation to provide seats to athletes who may or may not be able to come watch the sports. There are a range of Olympic Family programs that provide seating. We are always looking at those and there's a whole team of people who go to each sport event and look at where the empty seats are and come back and analyze what we can do for the next one to make sure those seats are filled. "
Readers of Ron Paul would say that attempts to regulate ticket sales have predictably failed, and that a thriving black market has developed -- as always happens when any agency seeks to artificially control the distribution of goods and services. There is little argument that capitalism is alive and well in Vancouver. Right next to the scalpers were tables of women selling the must-have fashion accessory of these games -- poofy red mittens that say "Canada" and include the familiar maple leaf. They sold for $23 on Robson Square. At the drugstore five blocks away, they cost $12.99.