A ticket scalper spills his secrets

MoneySense takes a look into how ticket scalpers make a profit.

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by Romana King
January 24th, 2012

From the December/January 2012 issue of the magazine.

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You really want to get tickets to the big game, but it’s sold out. So you show up at the stadium looking to buy seats from a scalper. The first guy you see offers you premium tickets, and there’s no mark-up on the printed price! How on earth does he make money?

Wonder no more. A ticket scalper we’ll call Alan, who has 25 years of experience in the business, recently met with one of our reporters to reveal the strange economics of ticket resellers.

Here’s how it works: First, a large corporate client calls a ticket broker—a company that specializes in bulk orders of tickets for entertainment and sporting events—and orders a block of tickets to entertain clients.

The broker then calls his roster of scalpers to buy the tickets for the client. The scalpers, in turn, call their “diggers”—people who stand in lines, work the phones and use the Internet to buy the physical tickets from the distributors, such as Ticketmaster. The diggers, scalper and broker all get paid a fee for their role.

As the event approaches, the corporate client often ends up with extra tickets that aren’t needed—these go back to the broker. The broker passes these surplus tickets back to the scalper, who takes them down to the game and sells them to you.

If an event is hot, the tickets will be sold for above face value. However, if the event is not well attended, tickets could sell at below the original price. Sometimes the prices are drastically reduced, so don’t be shy about haggling. In any case, the scalper, the broker and the corporate client each get one-third of the tickets’ actual sale price, plus the scalper made money buying the tickets in the first place.

Is it legal? Many jurisdictions in Canada have legislation forbidding ticket reselling, but low fines and sporadic enforcement mean that few scalpers are deterred.

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