New York has long regulated the sale of tickets to places of entertainment in the state through Article 25 of the New York Arts and Cultural Affairs Law (ACAL). This past July, Gov. Andrew Cuomo signed Senate Bill 8501-B, which amends and extends the current provisions of ACAL Article 25 until June 30, 2021. This article discusses the recent amendments, the majority of which become effective on Dec. 28, 2018. As discussed below, many of these reforms appear to be in direct response to concerns expressed in 2016 by the New York Attorney General (NYAG), yet the changes do not appear to be as sweeping as the NYAG had sought. Nor do they address any of ACAL's anti-resale restrictions that make New York one of the most ticket-broker friendly states in the United States.

ACAL Background

For years, ACAL restricted the resale market, going so far as to cap the price of resold tickets at $2 above face value. In 2007, with the Internet popularizing ticket resale and bringing it out of the shadows, so to speak, New York substantially amended ACAL in order to facilitate a more expansive resale market—including the removal of the $2 resale price cap. 2007 N.Y. Laws 2738.

In the ensuing years, the state legislature continued to revise New York's ticketing laws in response to developing concerns. Notably, in 2010, the legislature added provisions restricting service fees, paperless tickets, and the use of ticket purchasing software (“bots”). 2010 N.Y. Laws 781, 785; see also Anthony J. Dreyer, “Hold All Tickets: New York Adopts (Yet Another) Ticket Resale Law,” N.Y.L.J., July 28, 2010.

Yet the open resale market has led to numerous complaints that consumers are unable to purchase tickets at face value on the primary market, as resellers hoard increasingly valuable ticket inventory. This prompted the NYAG to survey the ticketing landscape in the State and issue recommendations for improvements to ACAL. Among the NYAG's findings were that resellers often were obtaining tickets through illegal bots, and some ticket sellers were adding “unclear and unreasonable 'service fees'” to the ticket price. The report concluded with a recommendation that the state legislature (1) mandate certain reforms and disclosures within the ticketing industry to increase transparency regarding ticket availability and service fees, (2) end a prohibition against non-transferable paperless tickets, (3) impose criminal penalties for bot use, and (4) reinstate caps on resale markups to ensure reasonable pricing. Eric T. Schneiderman, N.Y. State Attorney General, “Obstructed View: What's Blocking New Yorkers From Getting Tickets” (2016) (Obstructed View) at 4-6, 36-37. Although the bot recommendation was addressed in a 2016 law (as well as a federal law), many items in the NYAG's “checklist” remained. The 2018 ACAL amendments address some, but not all, of those remaining concerns.

Significant Changes for Primary Market Sales

The state has sought on multiple occasions to curb the addition of allegedly excessive and opaque service charges to a ticket's price, such as processing fees. The 2007 amendments required that fees added to a ticket's face value must be tied to “special services.” N.Y. Arts & Cult. Aff. Law §25.29 (as amended May 31, 2007). Three years later, the legislature imposed a requirement that any service charge imposed by ticket sellers be “reasonable.” N.Y. Arts & Cult. Aff. Law §25.29 (as amended July 2, 2010). The NYAG has since taken the position that “charges added to a ticket's face value violate State law if they are either (1) mandatory, general fees, unconnected to the provision of 'special services,' or alternatively, when (2) such fees reach levels that are no longer 'reasonable.'” Obstructed View, at 28.