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For ticket resellers and fans, the game may be changing

Scalpers routinely resell tickets outside Fenway Park. Scalpers routinely resell tickets outside Fenway Park. (Barry Chin/Globe Staff)
By Shira Springer
Globe Staff / September 6, 2011

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Newlyweds Michael and Samantha Bono postponed their honeymoon to attend a Red Sox-Yankees game last month. Ten minutes before the first pitch, the couple exited the Ace Ticket store around the corner from Fenway Park with a pair of tickets. They paid $135 apiece for $28 bleacher seats. And they were happy.

“In a strange way, I felt I was getting a good deal, which is disgusting,’’ Samantha Bono said.

“Yeah, but that’s how it is,’’ her husband added.

The secondary ticket market - the multibillion dollar industry in which brokers, online listing services, scalpers, and individuals resell tickets - is risky, expensive, confusing, controversial.

And, probably to the surprise of many fans, it is widely conducted in violation of the spirit of a nearly forgotten Massachusetts law dating to 1924 that was designed to hold down ticket costs.

That law limits ticket prices to $2 above face value, plus attributable service charges. The question is what is truly attributable. High-volume ticket resellers routinely factor in the cost of procuring tickets, operating offices, advertising, and paying employees.

Thus a ticket for the $28 seats can end up selling not for $30 but for $130 - with resellers maintaining that the extra $100 is to cover their cost of doing business.

Massachusetts is one of five states with laws strictly limiting what resellers can charge. But with hundreds, maybe thousands, of outlets reselling tickets online and offline, the law is difficult to enforce. Plus, ticket scalping is viewed as a victimless crime.

But by this time next year, legislation under consideration on Beacon Hill could, if passed, make the secondary market in Massachusetts a much different place for fans and licensed resellers. Some overhaul of ticket reselling regulations appears to have legislative support, but it is unclear what form it might take, or whether it would pass. Hearings are scheduled for this month.

One of the bills comes from state Representative Michael Moran, Democrat of Brighton, who has proposed legislation to make the secondary market fully legal - and perhaps more fan-friendly.

The proposed law would remove most restrictions on reselling tickets, effectively uncapping the secondary market, and institute greater consumer protections regarding refund and cancellation policies.

And with ticket transferability increasingly at issue, particularly as paperless tickets become more common, the proposed bill outlines the rights of ticket purchasers to resell tickets how and where they choose. Moran calls the bill “pro-consumer.’’

Knowing the risk of raising expectations among Boston sports fans, however, Moran, whose district includes Ace Ticket headquarters, emphasizes that the bill “is not about getting cheaper Red Sox tickets. All it is saying is that the secondary market should exist.’’

That is good news for Ace Ticket and StubHub, official Red Sox ticket resellers, and others in the reselling business. Ace Ticket’s chief executive, Jim Holzman, supports the bill and views it as potentially “another wall coming down in people accepting what we do.’’

Ace Ticket is licensed by the Department of Public Safety. So far this year, the department has received one formal complaint about ticket resellers. Five such complaints were submitted in 2010, most alleging overcharging. The Department of Public Safety has never disciplined a reseller.

Another proponent of the proposed legislation is the Fan Freedom Project, a consumer advocacy group initially financed by StubHub and backed by the National Consumers League. Fan Freedom Project, according to its president, Jon Potter, “protects the rights of ticket holders’’ and “supports transparency, transferability, and a competitive marketplace.’’ The easier to resell tickets - the more options available, the less risky the landscape - the lower the premium resellers can charge.

“We believe in [competitive] marketplace pricing because, many times, it leads to prices below face [value],’’ Potter said.

A second bill comes from state Senator Jack Hart, Democrat of Boston. In January, he refiled a bill that would prohibit resellers from charging more than 50 percent above face value, despite attributable service charges. Hart, however, would be open to restrictions that fall somewhere between 50 and 100 percent above face value. That bill may have a hearing this month, too.

Hart said his bill is designed “so the average family can go to a ballgame and it doesn’t become an elitist fan base’’ at games.

Rewriting the ticket laws is not a new idea. Lawmakers tried in 2007. A bill that would have eliminated price caps and called for greater consumer protections passed the House. But allegations of improper lobbying sidetracked the measure, and it died in the Senate the following year.

This year, there appears to be more interest in doing away with the antiquated state law.

Red Sox fans pay the highest average face-value ticket price in the major leagues ($53.38), according to the Fan Cost Index. And the successes of the Red Sox, Patriots, Celtics, and Bruins generate the high demand that leads to high prices on the secondary market. But there is the prospect of prices declining with a more open marketplace.

In the three years since Ace Ticket partnered with the Red Sox as the team’s official offline ticket reseller, Holzman, Ace’s CEO, said his Sox ticket prices have been lower because of greater supply.

“It’s almost like there’s an old Blue Law sitting on the books that shouldn’t be there,’’ Holzman said.

“It’s been frustrating over the years to have kind of a gray area, versus having a law that says, ‘If somebody wants to buy a ticket, they can buy it from you.’ And let’s make sure the people who are doing this business, such as myself, are paying taxes and being responsible, not on a street corner, not doing counterfeits.’’

Still, in Massachusetts the secondary market can be as much a gamble for resellers as for buyers.

“People think because of me tickets are hard to get and prices are high, but it’s supply-and-demand economics,’’ Holzman said. “As people find out more about the industry, they realize we fill a need.’’

The Red Sox saw a need, naming Ace Ticket the team’s official offline reseller in March 2008. “The secondary market is a fan amenity,’’ said Red Sox chief operating officer Sam Kennedy.

Noting that the majority of resold tickets come from season ticket holders, senior vice president of ticketing Ron Bumgarner said the secondary market “is a mechanism that allows a greater variety of fans to be able to attend games at Fenway Park.’’

The Red Sox enjoy a separate sponsorship and advertising partnership with Ace Ticket. Still, the relationship between team and broker confuses some fans and troubles some observers, such as Hart, the senator.

The Red Sox’ deal with Ace Ticket, Kennedy said, allows the broker to use team marks in its advertising, post signs at Fenway Park, and receive a limited amount of “hospitality,’’ including high-end luxury seating. The Red Sox, Kennedy said, “do not participate in the secondary market offline with Ace Ticket’’ and “do not have a revenue-share arrangement on tickets they resell.’’

In a deal brokered by the league, StubHub is baseball’s official online reseller. “Revenues generated through StubHub are distributed back to the clubs,’’ said Kennedy, though he declined to discuss details.

“Do we like to see exorbitant prices on the secondary market? No,’’ Bumgarner said. “But if our season ticket holders need to resell their tickets to a game they can’t attend, we want them to be able to do that . . . We felt the need to give them a safe and secure and fraud-free way to resell tickets.’’

The Patriots take a different approach, operating a private ticket marketplace via TicketMaster for season ticket holders and fans on the season ticket holder wait list. Private marketplace tickets sell at face value.

The Patriots sued StubHub in November 2006 for allegedly encouraging fans to violate the state’s antiscalping laws and ignore the team’s stand against reselling tickets for profit. The Patriots have revoked the tickets of season ticket holders caught reselling their passes for profit on the secondary market.

“It’s important that we know the people who are in our seats from a customer experience perspective,’’ said the Patriots’ vice president of customer marketing, Jessica Gelman. “And we don’t want to break the law.’’

Moran’s bill includes refund provisions and requires people who resell more than 80 tickets per year to maintain a toll-free number for “complaints and inquiries.’’ As the bill makes its way through the legislative process, Moran expects additional consumer protections will be discussed. Such measures could give the bill, viewed by some as pro-broker, wider appeal.

Fans say it is needed. “I had a friend who was the fourth person to buy bad Bruins tickets with everybody trying to resell them to make their money back,’’ said Josh Avery of Boston. He would like safeguards so he never falls victim to a scam. “That’s my biggest fear.’’

Shira Springer can be reached at springer@globe.com.