It harms everyone in the Live Entertainment system from performers to free and soared ticket issuers to invest heavily in the server capacity to deal with the measures. Artificially generated what they produce and if it is listed as sold out seconds later consumers are frustrated. The secondary market is impacted by this practice like ebay supports legislation that the misuse of of bots harms all parts of the industry. The biggest impact is on the fans. Report by the new York Attorney general suggestedy least tens of thousands of tickets per year are acquired using ticket box. I believe that the vibrant secondary marketing place is nothing good for consumerssu they should be able to sell their tickets for those that are willing to pay extra is there right but it is estimated half of the tickets sold our balloon base value so that prospect cuts both ways but i take issue with of legislation that seeks to redress is the 6 practice of cutting in line when they are offered so regular consumers dont have a chance to pay face value with a robust discussion about many of those proposals. Advocated additional in that they advocated additional provisions but the legislation is nearlyco tailored to the impact ofob peoples lives with a strong bipartisan and bicameral support and it is my expectation that the next markup and i would encourage all of my colleagues to sponsor this bill is specifically think my colleagues thanks for your support and senator fisher thank you for your support as well im sorry the big 12 has trumped of big 12 again with our testifying witnesses laugh laugh yesterday they passed onon suspension similar bill. And i work with third to make the bill law. Thank y thanks mr. Chairman for your leadership to bring us together today with this hearing to support the better Online Ticket sales tax. The good step before only a modest step forward ticket scalping in this country. In one of my f and wine of my favorite shows of all time, hamilton my e with one of my favorite numbers in that show is the room where it happens. That is all that the fansey want to do is be in the room where happens to give them their access to be in that room could be a sports stadium or a music venue orate a show like camel tends to with anybody says says, that, th these are a victimless abuse is kidding themselves. This kind of abuse boys and girls to celebrate birthdays at the show that they have waited and it affects the music fans that they cannot access although sports fans in victory or defeat. I spent several years to save connecticut against scalpers to make the unseemly profits from the am legal practices. That is not a victimless of the use abuse in their hopes and aspirations with that appreciation of the great cultural richness of this nation my former colleague attorneygeneral has done an investigation and asked uh chairman for if of a prepared statement be submitted for the record. Showing that Tickets Remain more ad of reach than ever before. With that denial of access is with the illegal use of special software that consume, literally devoured at high speeds the moment they go on sale or before to purchase tickets at reasonable prices the use to pry loose consumers of the fair market. Is legi then you should believe in the legislation then you should support this legislation whether a megahit like hamilton or the of Football Games or the concert, the current epidemic is blocky your access it is maddening and frustrating to consumers li matter where they live for background or class and that is why i am strongly inrs favor of this first that and i have heard from our communities of performingmm arts with the theater ofec bout makes their serving subscribers more difficult to build relationships with the future patrons of the arts. It is in every Community Theater and a one to thank the Witnesses Today. Edges want to say to my colleagues i did not get to go c. Hamilton. But not at the price because the reason that i did not go , i did not want to pay 800 a ticket. That i and eight at the time that i tried all of the tickets are bought up put them into the everyday folks lives to go martin b. Anniversary to go see their Favorite Singer or what about that baird denied of what is going on and hint this is not the freemarkett the freemarket contending sitting greedy speculators. It is not right in my appreciate what you are doing. Mr. Ranking member and will introduce you to the producer of hamilton and maybe you can see the show. And i request for the record of the Opening Statement at this time stay in the room when that happens laugh laugh i hear the objection. For those that come here to testify i would introduce them with Witnesses Today the general counsel of stubhub and the producer of hamilton musical and also the commissioner of the big 12 conference. Thankyou chairman and senator nelson. I appreciate the opportunityth to thank all of the distinguished members for taking the time to cure from the of witnesses. This is a terrific opportunity to talk about a vexing situation that brings all of us with relatively diverse backgrounds together to talk about a common challenge. I will let the paragraph stand for themselves and from merchandise thisth revenue is vital to the operation at the highester level in a fairly autonomous manner there is a unique relationship with those seasonTicket Holders across multiple generations than to keep the value and cost because of the r because of the of reasonable level of the pricing for the cases. And many of those postseason games for which there are already a limited number of tickets. We do. And for what we do. And bill will keep to our fans. In reno when the supply is fixed. To see live events may the environments a school couldone r of of big game to bundle tickets together of the highly advantageous activities. But willing to pay a great deal more for the tickets to the anax face value that they will exploit the individual game ticket the where they are also ticketholders to profit fr in those individual Ticket Holders to profit from of Market Forces but the scalpers will use computer programs to pick up and five more tickets than individuals are allowed to buy mother is a sophisticated Computer Operator the hard earned money to benefit the students and athletes not those that seek to make a quick buck off of our supporters our conference asas some of the best sports fansns and the country but the bad actors that used to buy the tickets to have the inflated market sugh cut airline to profit of something they did nothing to create. I am aware that some of the pundits question of there is making that congress should do about this situation. Scalpe, of what ever they can do to gain the system. That is the step in the right direction. The this state attorney general of the civill Enforcement Actions of the practices to toward uh challenge of a lack of integrity of the online purchasers and to ensure that they have access to good tickets at face value. To encourage healthy competition on the field of play between the student athletes and in the internet ticket sites between the hardened fans as those faceless scalpers. Fait que weekend for your invitation to testify. When it comes time to question it is respectfully. Seller. So o congratulations to be a producer of a show thata can make political figure is interesting to the general public. We are delighted to work with you. Banks chairman and. To be in your presence of view and others i am honored to be in this room where happens today to participate in American Democratic process. I am the proud producer of hamilton but by way of introduction mike career has been defined by my passion of the american musical. I produce rent, and the 2009 revival of west side story and the unfortunate winner of tony awards. So in 1978. Thirteen years old and my father was a process server and a clerk at a local drug store. To of money available for entertainment. Ated my parents to to scrape together whenever funds that they could. We could not a seats were 10 and could not afford for the entire family. Well loan went to musicals. To go, s so my father stood in line for four hours at the theater so we could get tickets to have us the gift for the holidays for the entire family. With a determination by parents and the same american musicals of my childhood but the reason to be here today, my mission is to richard that young people of all ages, like senator dole said have the same opportunity laugh laugh to see Live Performances of what ever interests them whether musicals or plays or foreign films or big 10 conference games. E been unable o. Bal online marketplace for event tickets. The largest, it offers fans a safe and convenient place to get tickets to the games, concerts and theatre performances, they want to see, and an easy way to sell when they cant go. Today, some fans are frustrated with how tickets are 10e8d. They often face unreasonable licensing, and legislative restrictions when they attempt to buy or sell tickets. The rules, are too often unfair for a fan, and inconsistent. Like nearly every other industry a more open marketplace would mean lower prices, broader availability and access, and security for people like each of us, who want to attend live events. But the ticket marketplace is not transparent. The main focus is on bots, the software programs, to bypass, and skip ahead. Stubhub believes misuse harms all parts of the tickets history. Thats why we have supported it. At the u. S. State level and we commend the senators on their efforts to enact a federal anti bots bill. Still not all bots are malicious. They perform functions that are critical to the. Net. They are used by every portion of the internet, search engines, ticket bots are just one combo nent, in a suite of anti competitive. Rather than focus on bots, i hope for the fans sake, more di log in going forward. For most fans, a question is, why cant i get tickets when they go on sale . Ticket bots are part of the answer but only part. A lack of transparency, with the practice called ticket hold backs are also largely to blame. In a report on ticket sales the new York Attorney general found that less than half, 46 of concert tickets are made available for purchase to the general public. In some cases these hold backs are more extreme with reports of major headliners releasing 12 . The held back tickets reserved for presales, and for industry insiders, artists, agents, venues, brokers and promoters. Understanding the primary markets practices would be a helpful development and i hope that we ex baltimore the issue going forward. Even for the lucky few who are able to buy tickets there are restrictions imposed by primary ticketing providers, as a condition of the sale. I want to highlight a couple today. There are some tickets practices that are intended to make it more difficult for the purchaser to transfer freely the ticket. These restrictions through terms are inconvenient. They prohibit fans from buying tickets for a gift, or giving them away or used as donations f. A ticket buyer cannot attend it, block easy resale which sticks that fans. Restrictions are out take lied in the way that they can only occur on specific platforms, providers and these harm consumers. We encourage congress to to assist in the dialogue. It is worth floating there is no fell resting lacing regarding ticket industry. It has been at the state, local and my mills pal levels. We hope that they will engage in it, and, require all elements and stakeholders to participate in the examination or study. Stubhub supports fans. Thank you for the opportunity to testify. Thank you. Chairman and senators, i want to thank you for holding a hearing on the harmful events that bots have, on the industry. Very much appreciate it. From fans and artists. My name as many jeremy and im associate general counsel at pandora, our mission is to connect fans and artists. This why it was a natural fit when we acquired ticket fly last year. Since its found mooring it has partnered with more than 1600 pronotters, stage one, helping them sell more tickets and bring more fans to see live shows. Ticket flies software powers, digital marketing, for promote 2ers, help fans discover and purchase tickets, in just a few taps. Since selling its first ticket, the company has processed more than 1 billion, and, 3. 7 million so far this year. The value of live events cannot be overstated. Concert, and comedy bring people together to make a real difference. Local bars and restaurants, and, taxi drivers and hotels, and, Retail Stores all see a direct benefit. At ticket fly and pandora we have seen the name you are of live hue spic. The international festival. The month long celebration, in addition to being a source of pride, the economic impactses are for the music and barbecue are as sounding. This year it, supported, more than 1,000 total local jobs. And 93,000 visitors and generated 7 2 million for the city of memphis. So whats the problem . Profit hungry bot operators are exploring it of working artists and robbing the fans, that is a sport them. A growing body of Research Shows how bots is keeping tickets out of the hands of fans, and, taking money from artists. These programs post as real fans, to circumvent limits and measures. They can seize large chunks within seconds. Far faster than any human being could ever type and click. Real fans are unable to get good tickets at facevalue. There are other costs, the same ticket can be resolved more than once. This can lead to longer lines and added confusing, and denial of entry. It also tarnishes the reputation of artists who shoulder the blame. There are stheaps can be taken at both the state and federal level that strike the right balance. Ensuring consumers can access tickets in an easy way and fair prices a win win for all. Breufting attendance at events and encouraging spend mooring and, resulting in increased revenues for artists, and unsung staff who work hard. With that in mind we welcome the better Online Tickets act or bots act. In order to increase fairness. We want to thank the senators for introducing this legislation to benefit fans, and artists. As i said at the beginning of my testimony, our goal is to connect fans with the artists they love, at the gym or driving to work. Thats why we support a music economy that works for everyone. Artist and fans, and, promote tors and why we urge the senate to take action to stop bots of fair access to tickets. Thank you, and i look forward to your questions. Thank you. All very much. Let me begin my questioning by making sure i have a understand of whats legal and whats illegal. In todays world, is it satisfactory to quote scalp a ticket, more than what the price is on the ticket . I assume theres answer to that question. Commissioner, is there something that prohibilityds that from happening . My guess is, this has lot to do with state law. It does. It is almost governed by state, counties, city ordinance, and, University Policy and it limits not whether they can be resolved but where they can be resolved. Youll see scalp either across the street, on private property rather than on state property. So, it is governed, in some cases, but not well enforced. That secondary market is really not my concern in this. Its been there for a long time. The market tnlds to be a level effect, and i think, the creation after artificial marketplace by purchase of an exor whattant number of ticket says a different matter. We have a number of very large events where the participating teams get a fairly large number of the tickets, and then, the remaining tickets, if bought up by bots are next to impossible to get at anything close to facevalue. Anybody need, or want to add to anything . I just mention that there are few states that still prohibit ticket resale, the enforcement is very spotty. The location restrictions that, the commissioner has mentioned. So, this legislation is not designed and wouldnt get to anyone who considers that a problem. Were not dealing with that issue. 9 goal here is to create the circumstance in which you cant acquire a huge magnitude. Tickets that are available, and therefore control or corner the market, with your your resale of your ticket says in. It makes exact sense. Im not here to prevent buying and selling. Im here to make a level playingfield so everybody has the same shot at that ticket. Mr. Seller you heard mr. Cohen talk about hold backs, maybe you can describe how the tickets for hamilton become available. Theres how many tickets that are there are seats for tickets, and what happens . First i want to define that i think that the issueds speaking to has more to do with the concert industry than theatre industry. Theyre not the same. That sir not an issue in our industry. If i have 2,000 seats on sale at the private bank theatre in chicago, i might have 130 tickets that are what we call house seats and those are the tickets that are controlled by the writer of the show, the director, the actors, for their personal use. Those are sold at facevalue. So its less than 10 of the house. Its a nonissue in the theatre. You indicated that had, hold back applies to this, but, you are, have ticket available for 10 for students and others, which i guess that would be a hold back, and i think that hold back goes with god. Mr. Cohen, you indicated that, there should be a broader discussion. Who is not at the table . If there was broader discussion to occur, who needs to be involved in that conversation . A couple of different people that are missing from the table. One would be our friends at ticketmaster. And i know that they have very strong opinions opinions and attacks by bot questions and they would be helpful. Different other parts of industry, the brokers have an absolute need and desire to be at the table to help work this issue out and to be part of the discussion. Do you have anything to add or subtract to what mr. Cohen was indicating, about a broader range of discussion . Our experience at ticket fly has been very different than the ags report, in that will total hold backs is less than 10 . Not very reflect tir. Thank you. If i may add something, ticketmaster is the vehicle through which we sell all of our hamilton tickets. We have worked on the bot issue over the last six months. In fact, over we had a huge group of ticket thats we put on sale february 1, we know that bots purchased over 70 of those tickets and working with ticketmaster and by identifying, bad actors and through them, exceeding the ticket limit we were able to refund over 5 Million Dollars of bot purchase tickets in the month of april. So we refunded them or i should say, they put much, much more advanced anti bot software and we put them back on sale with through our system and getting the message out, try again and we got our success rate closer to 70 . Ticketmaster has worked hard. Is there a standard description of the individuals or businesses that are using bots . Who is the culprit here . I think that theyre how many people participate in this kind of market . We dont know how many. But some of them are overseas. Connecticut, florida. But, we know that there are a variety of companies that each have the software and then give it away or sell the software to other bad actors. These are, theyre like spoke brokers. Theyre using as their form of making a living the buying and selling of tickets to make a buck. With your permission im going yield to my friend, senator booker who has a scheduleing conflict, hes going to sing rap his question. [laughter] thoorng you. Im grateful and to the chair. Im from new jersey, theres a champion on this issue, congressman who has been for years and years before i came to the senate, this is something he was very upset about, often seen with one of new jersey patron sons, Bruce Springsteen. So he has a bill in the house, that i think some of you are familiar with . Yes. He talked to a lot of he focuses on the hold backs and i want to invoke press on some of the issues hes concerned with. And has enlightened me o. It has to do with transparency requirements. Im curious, these are some of the things that the bots act does not have. Are these important to mitigate the harms that happen to to the consumer . We think it would be. We think that the ability to be more transparent in the market would have the greatest impact on the market. Because, it is true that, the hold back issue, we dont know, we dont know, that was one of the things that consumers would benefit from. When theres an on sale. How many have been placed on sale . So there is a way in which we worked with the congressman to try to come up with some of those solutions, and are willing to continue to work on that. Theres an element of which its embarrassing, that they are only putting 10 on sale. Well we have examples of that being true. In australia, they have a ticket law in which they will only restrict resale if the promote tor provides the manifest to the government, and then, that is distributed public limit only six events a year, in a sports crazy place that use the law to do anything to stop or limit resole. What about the argument against, shouldnt somebody be able to obscure their behavior for hold backs or how many ticket theyre putting on sale . This is my private venue, and if i was singing, why couldnt i just hold back those ticket says in. There are ways, in which you can do that. Thats fine as we speak today. The 930 club here in washington, dc uses a credit card entry system for green day tickets and the only people that will get in will be the people that bring their credit card to that show. Any other elements that you think are critical . Theres a variety. But im happy to provide that to the committee. Thank you. Im grateful for the time, to allow knee slip ahead. Thank you. I now call on the senator for r from missouri. I want to talk about prosecution. I think the bill is just Civil Penalties and i believe in the deterrent effect, for jailtime for people who are committing a crime that is just making them money. At the end of the day, whats motivating people to use bot is just money. Theyre making a lot of money. In fact, they are stealing money from legitimate customers who want to buy tickets to events. Since we started this hearing, with a quote from hamilton, i will quote the king and say when push comes to shove i will send a fully armed battalion to remind you of my love. It seems to me, a fully armed battalion, is one that would include the threat of criminal prosecution. Are any of you aware of any criminal prosecution that have occurred in the 139 states . Tom my understanding, there are no states until new york, in june, changed their law to criminalize the use of bot. So no prosecutions yet in new york. We are working with the new York Attorney general, and, to see if there are some that can be criminally prosecuted. I agree. I think that criminal prosecution is the most effective way to do it. Well see is at the state level. And then, whether it is appropriate at the federal level. In the other 12 states, i know of no case. But i cant state for sure. Are you aware of any model legislation. I do have a hard time imagining that u. S. Attorney offices are going to prioritize it, because, knowing the nature of where crime is prosecuted, crimes like to are not secluded. At the state level. Are you aware of any model state legislation that might assist states in putting these loose their books . I do know there has been model legislation drafted. We participated, in it. For bots and the ticket industry. So we have both forms. I dont mean to pick on someone who is not here, but, lets talk about, the ticket receives that are making money coming and going. See if i have this right, ridernazation owns ticketmaster and tickets now. So, someone can use a bot, and buy a large inventory of tickets, to a concert, and then they can turnaround and place those tickets for sale on ticket now, correct . Yes. They can place them on our platform. I was like to pick some somebody who wasnt here. So, livenazation is making money. Theyre making fees, and then making a fee on the second sale also. Thats true. So, why dont we why cant you put in something your resale that would limit the number of tickets that could be placed for sale . You can adopt limits, and there are examples in which we have done that, and rare occasions. You can prohibit, you can run a lottery system every time to do the original distribution to reduce pieces. Its good to know that there are ways in which the bots have been reduced, through some technology. The ticketmaster. What im saying you comdo a lot of these things, under current law and steps are being taken. This is another step that could be useful, but im just thinking there might be ways to fix this problem without government. But there seems to be a financial incentive to sell them twice. Because the money that your sites make is the fees, that they are charging on every ticket they sell, correct . To be fair theres something to be add for open markets that allow for multiple resole. Its quite common you may buy a ticket, not need it, sell it and then, need to go back into the market. I understand that. But, if also reduces the incentive for the businesses that are making money on the same ticket again to want to solve the problem. You can separate out that. We would not 5d vote indicate that. Tickets are tickets. That the market would be much healthier with open free resale. Let the market handle it. My time is up. I hope somebody asks why are so many what are all the hold backs for . Where are they going . Ky only, we know that they go promote tors, the ticket manifest determines what will go to the artists and promote tors and sponsors, the arenas, and the season ticketholders, as well, as the American Express ticket system gold cardholders and presales and fan clubs is it fair to say that, there may be elements that are complicit in these kind of unfair marketups . I think theres a lot more knowledge in the industry thats kept from the general public. I take it thats a yes. Yes. I want to thank you for your candor and thank you both you for being here today as well, as the other pan until lists, and, say to mr. Seller, i think your life story shows us why there is a larger value here, in permitting ordinary americans to come to the theatre, to watch Football Games, and, its the place where the dreams begin. And where future stars are inspired to devote not only the inspiration but the perspiration that it takes to get to where you have gone and your storied minds us, folks who do what you do, also have to be ready for failure. Yes. You put skin in the game. You, at that time, risk. These folks who prey upon american entertainment and sports are parasites. They have no skin in the game. They exploit other peoples creativity and hard work. Not to mention denying access to the future stars. So it makes us passionate about this cause because it has such wide range ramifications. Let me begin by asking you, about the digital lottery, has it been successful . Are people happy with it . Thank you. For those kind words. It starts 20 years ago when i produced reds. I was only 31yearsold and doing my first broadway show i could remember very clearly that only maybe 6 years before that i could not afford a ticket to a broadway show. So, when my then Business Partner and i were getting ready to putt rent on sale we have to make tickets cheap and well do a 20 and lets do something better, well put them, in the first two rows of the orchestra section. It was first come and first serve. And then the lines became so long, we had kids sleeping over to try to get those tickets and then we went to a live lottery where you put your name in a hat and we would do that everyday at 6 00. That was successful from 1997 until last summer. Our live lotteries, were closing down 46th street everyday. It became a nuisance to the police and a traffic hazard. So, last winter we then reverted to a digital lottery in which anybody can gee to our lottery place you can all find it, and, the person enters the lottery and Court Reporter card. If they win, the card will go through, and they cant show up and pick it up until late afternoon. Using that system, 9 bots dont invade t. Because its a 10 lottery and the turnover time is so short they would never have enough time to resell it. So it is immune. It has so far been immune to that, because, and theres no time. It happens everyday for that day. Let me say, to mr. Cohen, i actually prosecuted these cases when i was attorney general in the state of connecticut, and i agree with my colleague claire, that, the u. S. Attorneys office is not going to inter today them and i served as u. S. Attorney in connecticut and these kinds of laws are very important. The good guys, like yourself should be on the side of laws at the state level, not this year, but the state level. I. I think that is tremendously important. Let me ask you, i understand that there are limits that are imposed per transaction. Would it be more effective to impose a per person limits so that the system cannot be impeded . Thats thats a great question senator. My understanding is this sophistication of the number of ip addresses that the attacks come in from and a vast array of credit cards they have at their disposal. Im not entirely sure that setting it at the customer level would make a huge difference with the operators efforts. Why is that . I think they could my expectation is they could appear to be multiple different people coming from our site to at the same time using different ip addresses, different credit card numbers or combinations thereof. You indicated, and this will be my final question, you indicated that the change in the policy with respect to speculative tickets have had an effect. You think all speculative tickets, should there be disclosure from someone who is selling a ticket without actually having bought it, which now happens . Should there be a required disclosure that, that seller does not actually have the ticket . We have found that the law is helpful but this is much more of a policy change that is based on the market itself. Which is, if you have a fan protection guarantee that will require what we do which is if you your not able to get into the show, theres a problem with the ticket we are going to do everything we can to get you into the show. Will buy up extra tickets if necessary for high demand events where we want to make sure all of our customers get in the show. It doesnt know his work. We have to refund in some instances. But the vast majority of the time, because because of that our systems are built to prohibit speculative ticketing because they cannot be delivered. So someone says theyre selling the ticket and we have the information that they have not delivered historically, theyre not going to be selling the ticket. So it is a very rinses in which a customer ends up with quota speculative ticket. Do you know what occurs when we have been fraught with proof that there are no presales. So Bruce Springsteen is a classical example. Theres no presales, no fan club. When tickets go on sale at 10 00 a. M. On friday, a. M. On friday, they go on sale. The entire house. Note Bruce Springsteen does have some credit card only entry to restrict eat resale. But in general all of the tickets go on sale at the same time come same price. So therefore someone who is getting tickets ahead of time will know that those are speculative. Because we do not know what we dont know about how they market the structure, where people released tickets at different times and people have different rights in the arenas, season Ticket Holders have different rights and clubs the owners. That information only becomes to us when it is brought to our attention. Mr. Chairman i want to thank you again for having this hearing. I would like to put into record a number of letters i received a for constituents about this practice. Without objection. And sam behalf of senator gorbachev that shes going to leave but she will cement questions for the record including one to mr. Seller, i understand shes going to submit a question to you when you are going to bring hamilton to minnesota . [laughter] and while she is at it, i will ask at the same about hartford, connecticut. Connecticut. When is it coming to hartford . And i hope that when it does you will have a digital lottery and enable some of our High School Students in to come see hamilton because i think they will be inspired to pursue careers such as yours and the great director, writer and cast that has so inspired Many Americans. So, thank you very much a. Youre welcome. Senator blumenthal may be somebody sitting in the audience being inspired by you. The desire to pursue a career of public service. Well, they dont dont have to buy any tickets. But as flattered as i am, i tend to doubt it, but thank you. Let me ask a couple of questions and senator blumenthal if you want to follow up we are just about ready to conclude this hearing. Tell me mr. Legal about technologies existing for those you think are out there that may address this issue. I understand it could be circumvented. Is there technological way of addressing this issue, and if so why is it not been implemented . That is a great question. Question. My understanding is that in our experience has been that any technological measure that has been put into place today, if it is even successful in the short term it is not successful in the long term. The. The illgotten gains that the operators devry from their practices pop back into investing in new software and technologies that can circumvent this protection the next time around. The testimony earlier was about ip numbers and credit card , how are those acquired . They belong to somebody . Is there a benefit that occurs to the person who has that identification and credit card . Or is it just fraud . I think it is the latter. I think it is the means to which they keep the game going. So this is part, this is a result of stolen identity . Information information stolen about people can become acquired by those two acquired tickets . I dont know if they were stolen credit cards. I dont the guy meant to imply that. They just may be that these bot operators have whatever means at their disposal to an masses many credit cards as possible so they can keep appearing to be different people. If i could add something. The bots frequently employed gift cards. So they can go out and get thousands and thousands of gift cards and use those to buy tickets. In our antibot movement between hamilton and ticketmaster they have identified through software, the behavior the behavior of a bots so they can identify them. That has what has proved to be somewhat successful in curbing their behavior. The problem is it is an arms race. When the bot to act or is it making millions and millions of dollars a year by turning over tickets, it is is worth his time to continue to employ engineers to create better and better software. So, so, whereas if you went to ticketmaster a year ago, you saw that in order to overcome bots you would see the cursive letters that you had to enter into that little box. You would see in l, and age, a peak, iq, four, six, and eight and he would have to write that it. That was an antibot anti bot to measure. Now they are giving you pictures. They will show you six pictures than they will say identify which pitcher does not have a wheel in it to try to overcome the bot. So they keep employing new systems and then the bots up their game as well. Frankly they are just as good at that. That is why we need the legislation. The arms race is unending. On the topic of holdbacks, it occurs to me that there may be a consequence of bot actors behavior that encourages the hold back. Would not those in the Performance Industry have holdbacks for their fans to try to better ensure that their fans get tickets . There fan club . Is that potentially just a response to the fact that tickets are being acquired so quickly in such a prevalent manner . My point is, that mr. Cohen you talked about the disadvantages in the wrongness of holdbacks and consequences. The holdbacks section may be a result of what we are trying to eliminate here. Absolutely. I dont mean to imply that theres anything negative about a hold back in and of itself. Its much closer closer to the question of transparent. I guess your question was about knowing the market. Right, is there distribution in which they were actually playing a game. You indicated mr. Cohen in your testimony about the potential positive uses for bots. And to make certain that we do not sweep away any technology that could play a positive role in protecting the ecosystem or elsewhere. It is why we went to two significant efforts to narrowly draft this legislation so that we did not get outside the scope and enter into an arena that id be very reluctant to go. But, are there examples of technology, Bot Technology that would be advantageous for consumers . We dont see anything in this legislation that would be harmful. But if this legislation was broader, what positive benefit to consumers might be eliminated by a broader definition . If you said it was only Automated Systems and there are a lot of bots that double point at the Automated System so that the human intervention will always overcome it. It is a problem with many systems and almost all bots is that humans, theyre still going to be people that do 40 people in line. Its not going to go away. There are ways in which you force everybody to identify everybody on pointofpurchase like the Airline Model like you know who the person is and thats a person who can use the ticket that means youll have a different ticket allocation system. In this instance, we dont think theres any problem as you have addressed at the legislation right now, it works fine technological mandates. This is much more of an issue as when you merge it with this house bill whether there is criminal provisions in it or not and whether it is narrowly and only limited to bots. I have another couple of quick questions. Mr. Cohen, when i was attorney general one of the measures i thought was in the entrance of transparency, acquired disposal of the face value of the ticket. Face value is important in a significant indicator. It is also one that requires that if youre going to make it a condition of legislation, that you understand and define what face value is. So a Convenience Fee on is not considered part of face value. Therefore a a consumer in some ways being misled. Or, do require that in many instances some of the holdbacks will result in tickets that are price below the face value and sold to people and then results them at allegedly below face value and are not technically blow face value. Its just an imprecise term that requires legislation around it before it becomes part of a statute. It may be imprecise, but it is definable. That is the key piece. So the statute where its defined its not that difficult to do. It requires a technological mandate because you then require everybody systems to display. Our experience has been its almost it irrelevant piece of information, in in particular with the advent of dynamic pricing. As demand increases or decreases, the classic example being an announcement of a retirement of a player and therefore demand for the tickets will go way up. The pricing systems will allow for people to set those prices at different times so we dont know what the face of value is. Because it changes. You can buy a ticket for tonight and it will change throughout the season in sports. As tickets become more valuable as we get closer to a pennant race you will see ticket prices increase. So face value at a point in in time it is not necessarily represented. It is a defined issue that needs legislation around it. Speaking about sports, as you know some sports leagues have deals with secondary ticket brokers and they in effect forced upon buyer, nontransferable tickets that can be resold only on that exclusive resale platform. To give an example, some nfl team required ticketholders to use to get masters in nfl Ticket Exchange platform which imposes price floors on the resale of tickets and that makes it more difficult for sellers to sell tickets to a game they can no longer attend. For some fans, they are prevented from seeing the gay in per se. I understand maker of baseball leagues have a similar policy. You discuss in your testimony, your interest in preserving a school of longterm relationship with its alumni and fans. I am wondering if you have any observation about this practice as it is done by professional sports leagues . I think it calls into question if you actually on the tickets once you purchase them. If there are restrictions on where they can go it how you can dispose of them, it certainly calls into question as to if those are your surf they reman the prerogative of the ticket supplier. As part of our research for this session we called one of the venue operators in the dallas, fort worth area. He very quickly went online and identified a broker that had tickets on sale two weeks ahead of time for a show that they were not going to put on sale for two weeks. It really is illustrative of the extent to which there is great confidence in the system. The bots can get as many tickets as they need for an event they have. I suppose the nfl and Major League Baseball have done this for a good at appropriate reasons. But the question i have is, do you really on the tickets if you cannot do with them what you want . Due on the tickets and what do fans think of their teams if they engage in these types of practice . Thank you. Again thank you to our witnesses and thank you mr. Chairman. We are joined by the Committee Chairman and we are honored by that. If you had not asked the final question we would have been done. I recognize that my colleague from south dakota. Darn, i missed it by minute. Thank you. I appreciate you holding this hearing on this important topic. As an avid avid fan of Live Music Events and sporting events, i certainly appreciate the frustration that Many Americans experience when faced with having to spend an exorbitant amount of money on tickets for seen their favorite artist in concert or when they come to town on to her. Imad the we have a new venue in sioux falls, south dakota so we are getting all of the big acts are coming through. Ive had a chance to see a lot of them. A lot of sporting events as well. I appreciate how important this issue is to people all across the country. I am pleased to because i have not seen hamilton. I am glad you are able to bring that to us with your gavel. There were Tickets Available here for ten dollars, you miss them, you were, you were late. Really . Oh my gosh. Excuse me one moment. Youre making a a note and when i complained i was able to see the show nothing occurred. Mr. Chairman were delighted you are here but if you get more than one, please let me know. Im sure there is a of violation in there somewhere. But i do want to thank all the witnesses for the being here and i welcome the views on ticket bots and more broadly the health of the live event industry. I would welcome your recommendation with respect to federal legislation that would protect consumers in this marketplace who seek to purchase tickets. The bill, senator maranda is a sponsoring a sponsoring along with others is important bipartisan legislation. I think it will ensure that everyone has a fair shot at seeing their favorite actor team without having to pay an armor or like to do so. I hope this will provide the feedback that will enable us to include this on the bill for the upcoming markup. A couple of questions. Mr. Seller, can seller, can you give us an example of the face value of a hamilton ticket as compared to a price on the secondary market . Yes. A face value for hamilton is currently 199 in new york city. In chicago it is somewhat less. If you go right now to sub hub and try to get a ticket for this coming weekend you will see tickets ranging anywhere from 650 to 2000 each. How do ticket bots affect the tickets for sports . Are all sports affected or is a generally basketball football . I think senator it is predominantly basketball and football. We see we see it somewhat in College World series and other high demand ticket situations. It is primarily in football and mens basketball. To a lesser extent in some of the other sports where culminating activities at the end of the season are hard to get tickets to. I think we also see it in our bowl environment and in the College Football playoffs. This would be for mr. Cohen and mr. Legal, i would like to explore the reasoning behind why Companies Like stub hub and ticket to buy a pose ticket bots. Is the leading Companies Live events it would seem that ticket bots might actually help your bottom lines. For primary ticket issues for example bots move tickets quickly. And secondary market they help create inventory. In both cases they do so at the expense of the ticket buying public which again is pointed out early makes the Consumer Experience both more frustrating and expensive. In an age where consumers have a variety of entertainment options, at what point does the extent of frustration that ticket bots cause a drive consumers away from Live Entertainment . That is a great question. I think the connection between the fan and the artist, that the artist may be trying to price their tickets below that maximizing point. To really create and establish a connection with the fans and turn them into avid fans of them is a live act. I think its bots, as quickly as they might get tickets into certain peoples hands i do think they frustrate that purpose that the artist might set the tickets below that prophet maximizing point in order to foster that relationship. That frustration and inability to get tickets at a reasonable price really puts that relationship at risk overtime. There are two Major Concerns we have. One is, we are in a market where tickets become more and more just tickets, primary and secondary. The ability to buy and sell tickets because of generic. As such, we have more and more bots hitting our own sites and systems and costing us server space. There is a natural reason why the costeffective funds that we dont need to spend. The second second reason is that it also, it does drive markets in a way that you are exactly right. Most of the time nobody cares about bots because they sell through more tickets. One of the great concerns we have on the criminalization pieces the ability for a private actor to make a determination as to whether or not to something, because of their own belief is that they have crossed the line to criminal bots of behavior versus just an Automated System in which someone was gathering up tickets for them. There. There is an identification and determination made by a private actor as to this is an illegal act by someone else. As to the question of there is some actual constitutionality questions around whether you like having private actors make those calls. General we believe that the senate bill has not criminalize measures in it and therefore we do not think it would harm any of the potential good uses for bots in which one private actor made a determination they did not want to have any resale or any sale to a specific set of people. Mr. Chairman, i think think that covers my time has expired. I appreciate your leadership on this issue. Hopefully we can read the bill moving. Thank you to the panel for your observations and insights today. It will be very helpful as we move forward. Thank you. Mr. Chairman, thank you very much for joining us. I think we really are now ready to conclude the hearing. Let me ask the hearing. Let me ask just briefly, mr. Cohen, you implied i think that there is a difference between hospital and the senate bill. And you are satisfied with the senate bill, but not so with the house bill, is that accurate . Im not certain of this but i believe the house bill still has the criminal provision in it. We would have asked the senate to look at that and make a determination as to whether that is appropriate. Which the senate bill does not have. And thats year acknowledges the extent of your concern between the two versions. I believe that is. If there is additional, massive myth that . Please do. Please let us know. Commissioner, my final final question. What teams are you going to to the big 12 and ill keep it to myself . [laughter] you have the right to remain silent. Do i cease to be under oath at this point . I have detected that you have a great, i dont mean this in an offensive way, great political skill and ive no doubt you will answer this question without providing any information. Let me just say that we have the aircraft are fine and we are going to try to land it. We are glad to hear that, thinking very much. We would like the big 12 to be in the 12. We are now ready to conclude this hearing. Thank you very much to the panel for the testimonium for my colleagues for joining us. The hearing record will remain open for two weeks. During this time senators can sum it questions for the record. Upon receipt questions for the record. Upon receipt the witnesses are asked to submit written answers to the committee as soon as possible thereafter. We conclude this arena think the witnesses. We are adjourned. Thank you. 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