Price caps could see sports fans suffer

New Statesman​

18 hours ago

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With ticket demand at an all-time high for live sports and entertainment, the government is exploring introducing price caps on resale markets as a way to 'protect' fans. While well-intentioned, this risks doing more harm than good for fans, argues Rob Wilson, professor of applied sport finance and head of executive education at the University Campus of Football Business (UCFB).
What is the connection between price caps on ticket resale and financial harm for sports fans?
The introduction of a price cap could unintentionally increase the very thing the government is seeking to eradicate. Capping resale prices doesn't reduce demand – it simply shifts where that demand is met. Without access to regulated resale platforms, and with demand often far outstripping supply, desperate fans will turn to where they see sources of tickets: social media, unverified sites and underground platforms. This is where fraudsters lie in wait, offering tickets that don't exist and employing social engineering techniques to scam fans out of their hard-earned money. Unlike regulated resale platforms, these channels offer no guarantees, no refund policies, and no accountability.
We don't need to look too far afield to see this harm in action. Tickets recently went on sale for Ireland's first ever regular-season NFL game, between the Pittsburgh Steelers and the Minnesota Vikings, to be played on 28 September at Dublin's Croke Park. It's set to be a show-stopper. Dampening the excitement is news from the digital bank Revolut. The bank, which has three million customers in Ireland, says it has seen a marked increase in ticket scam reports since the tickets went on sale. When analysing data from its Irish customers in the fortnight following the on-sale date (17-30 June) compared with the previous two weeks (3-16 June), Revolut found an 80 per cent increase in the number of ticket scam victims during the second fortnight. It's no wonder that the bank has been strongly advising punters to look out for the most common tactics of fraudsters and to stick to official resale sites, rather than attempting to buy from social media. Research by the consultancy firm Bradshaw Advisory backs this up. Its research indicates that ticket fraud in Victoria, Australia and Ireland – both jurisdictions with a resale price cap – is nearly four times higher than the UK. If rates of ticket fraud in the UK were to increase to those seen in Victoria and Ireland, the research suggests the cost to consumers could be £1.2bn per year.
What effects are being overlooked?
While well intentioned, limiting ticket resale with the introduction of price caps makes it harder for fans to resell tickets safely and legally. Fraudsters know this and take advantage in unregulated markets that rely completely on trust, through encrypted messaging apps, social media and on websites that operate beyond the reach of UK law. Meanwhile, fans lose access to the safe, regulated resale options that offer transparency and consumer protection. It's easy to look at price caps as a quick fix but more consideration must be given to the knock-on impact of their introduction, not just to fans but to the entire sports industry.
How might price caps harm the UK sports industry?
Price caps don't just affect fans – they can damage the business models of major UK sporting events. Take Wimbledon, for example – the most prestigious tennis event in the world. It's not surprising that earlier this month the All England Lawn Tennis Club warned the government that proposals to cap the price of resale tickets to live events could endanger the tournament, given the sale of debenture seats is a critical source of funding. Wimbledon's debenture system – where premium seats are sold long-term and can be legally resold – has raised over £500m for venue upgrades and fan facilities. Implementing a price cap threatens to weaken demand for primary issuance by limiting the ability of holders to recoup their outlay or even profit by selling them on when they can't attend. Wimbledon relies on this model during the two-week grand slam window to fund necessary improvements, the venue's infrastructure, fan experience and global standing. Resale price caps would directly threaten this vital funding and put the future viability of this iconic sporting institution at risk.
Do price caps solve other problems in the ticketing market such as bots, or allocation fairness?
Price caps don't stop bots. It's a problem that needs to be cut out at source – ie the primary market, where tickets are originally sold and where bot activity takes place. Existing legislation outlawing bot technology, such as the UK government's 2018 ban, does exist but more needs to be done to enforce these laws with primary sellers and eradicate bots. There still hasn't been a prosecution under this law in the seven years since it was passed. Taking a further step back, there is evidence that for some events the majority of the venue's inventory has already been sold or placed by the time tickets go on sale to the general public.
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These tickets get locked up in presales, sponsorship deals, VIP access, or exclusive credit card offers. This means that consumers are already at a massive disadvantage in securing a ticket. The lack of supply is a real driver of rising prices. If you don't fix transparency or tackle monopolistic control over ticketing, fans will continue to feel shut out, no matter what the resale policy says. What should the UK government do instead? If policymakers want to help fans, they need to target the root causes. First, they should enforce existing laws against bots and speculative selling. Second, improve transparency around how many tickets are actually made available, with the introduction of interoperability within the ticketing market. Third, encourage competition by opening up the primary ticketing market. And finally, allow safe, flexible resale with clear guarantees for fans. The goal should be fan-first flexibility, not rigid price controls that fail in practice.
Are there any real-world examples that show price caps working or failing?
Price caps have not been implemented in many places and there appears to be a good reason. Evidence from reputable research bodies points to the harm price caps do to fans with soaring fraud. We only have to look across the Irish Sea where one of the country's largest digital banks is reporting an 80 per cent increase in ticket fraud for the country's first NFL game – and a 48 per cent rise in the amount of money lost to ticket-related scams. Ireland's resale laws were designed to protect fans, but with no functional resale market, thousands are left empty handed or else turn to risky alternatives. With the UK government currently deliberating on whether or not to introduce price caps, I would urge those responsible to review those markets where price caps are in place and are harming fans. We are fortunate to have a lens on the unintended consequences of price caps in these markets and we must learn lessons. Furthermore, the stark warnings from sporting institutions like Wimbledon and banks like Revolut must be heeded. An attempted short-term fix by the government could risk initiating significant harm for huge swathes of fans across many industries as well as the entire UK sports industry.
Any words of advice to policymakers?
Good intentions don't always make good policy. If we want to protect fans, we should build systems that prioritise safety, access and competition, not create restrictions that push fans into the dark. A resale cap might look like a solution, but, in reality, it just changes where the problem shows up next.
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