The Ticket Tout Trap: Why Price Caps Could Cripple the UK Events Industry
The UK government is poised to make a costly mistake. Intended to shield consumers from exorbitant ticket resale prices, proposed price caps on event tickets risk doing far more harm than good – potentially costing the UK economy £183 million, according to research by the Centre for Economics and Business Research (CEBR). This isn’t about defending scalpers; it’s about understanding how market forces, even imperfect ones, can deliver better outcomes than well-intentioned but misguided interventions.
The Illusion of Control: How Price Caps Backfire
The core problem isn’t simply high prices; it’s the frustration of missing out on events. Capping resale prices seems like a straightforward solution, but it fundamentally misunderstands the dynamics of supply and demand. Primary ticket markets often undervalue tickets to popular events, creating an immediate arbitrage opportunity exploited by bots and professional resellers. A secondary market, while sometimes frustrating, allows prices to reflect true demand, ensuring tickets flow to those who value them most.
CEBR’s research highlights five critical ways price caps could shrink the resale market:
- Reduced Incentive to Resell: If selling a ticket at a capped price isn’t worth the effort, fans will simply keep it unused.
- Decreased Motivation to Attend: Resale value signals event desirability. Caps remove this signal, potentially leading to more no-shows.
- Unregulated Sales: Caps will drive transactions to risky, unofficial platforms like social media, increasing the risk of fraud.
- Platform Constraints: Resale platforms may struggle to verify face value and comply with caps, potentially forcing them to exit the UK market.
- Price Floors & Unsold Inventory: Combining price caps with existing price floors creates a scenario where tickets simply won’t sell.
The Rising Tide of Ticket Fraud
Perhaps the most alarming consequence of price caps is the likely surge in ticket fraud. Official resale platforms offer consumer protections and guarantees. Pushing transactions into the shadows – onto platforms like Facebook Marketplace and WhatsApp – exposes fans to significant risk. The evidence is stark: markets with price caps, like Ireland and Victoria, Australia, experience significantly higher rates of ticket fraud. Bradshaw Advisory’s research reveals a 13.6% fraud rate in Ireland and Victoria, compared to just 3.8% in the UK. This means you’re over seven times more likely to be scammed for a ticket in Ireland than in the UK.
Recent reports from Lloyd’s Bank and Revolut paint a grim picture, with 90% of Oasis ticket scams originating from fake social media posts and 54% of all reported scams occurring on Meta platforms. This isn’t a theoretical risk; it’s a rapidly escalating problem.
Beyond Price Caps: The Interoperability Solution
The government’s intentions are laudable, but a focus on price controls is a distraction from the real problem: a broken ticketing system plagued by bots and a lack of transparency. Simply capping prices won’t eliminate touts; it will merely force them to adapt and operate in more dangerous environments.
A more effective solution lies in interoperability – a system similar to Open Banking. Establishing automated ticket verification processes between primary and secondary retailers would allow for the sharing of information to identify and block bot activity, verify ticket authenticity, and combat speculative selling. This would foster a multi-channel distribution system, giving fans more choices and reducing reliance on single, often-flawed platforms.
The Economic Ripple Effect
The impact extends far beyond the price of a ticket. CEBR’s research demonstrates that secondary market purchasers spend an average of £629 on ancillary goods and services – travel, accommodation, food – boosting the wider economy. Empty seats due to price caps translate directly into lost revenue for these businesses. To put the potential £183 million loss into perspective, it could have fully funded Team GB’s Paris 2024 Olympic campaign, exceeded the entire EFL Championship’s transfer spend, or sold out Wembley Stadium ten times over.
A Future of Verified Tickets and Secure Transactions
The debate over ticket resale isn’t about protecting scalpers; it’s about protecting fans and ensuring the long-term health of the live events industry. Price caps are a short-sighted solution that will likely exacerbate the problems they aim to solve. Instead, policymakers should focus on fostering innovation through interoperability, strengthening consumer protections against fraud, and addressing the root causes of ticket scarcity. The future of ticketing lies not in control, but in verification, transparency, and a secure, efficient marketplace for all.
What steps do you think are most crucial to improving the ticketing experience and combating fraud? Share your thoughts in the comments below!
