Touhey Testifies Against Speculative Ticketing Before Congressional Subcommittee

Speculative ticket selling should be banned completely, Dave Touhey emphasized to Congressmen and staff. “It is fraud and of no benefit to consumers.”

Touhey, Connett Consulting, was representing IAVM, and by extension, the Fix The Tix Coalition of which IAVM is a member, during testimony before the Subcommittee on Innovation, Data and Commerce Sept. 27 in Washington, D.C. The subcommittee, part of the Committee on Energy and Commerce, was holding a hearing on 14 proposed bills, including three that impact ticketing – the Ticket Act, the Boss and Swift Act, and the Speculative Ticketing Draft.

The hearing was a mid-step in the legislative process. The Representatives were seeking further information from experts in the field. Touhey was speaking to all three bills, not just speculative ticketing. “I was speaking to what was introduced, but said none of it goes far enough. I introduced some insight to why it didn’t go far enough,” Touhey said.

The most compelling part of his original five-minute testimony was by example. He told members how he had gone online to buy tickets to Wu Tang Clan at Capital One Center in Washington. He clicked on the first site that came up, one that had a photo of the building and acted like it was the venue’s site.

He quickly found two tickets in Section 2, Row P for $1,503 all in, but with no seat location. “That’s always an indication it’s not an official sales site, and often a sign that the tickets are speculative,” Touhey testified. That means the seller does not have the tickets in his possession; he is speculating he can get them if he can find a buyer.

John Breyault, National Consumers League; Dave Touhey, IAVM, and Scott Benevidez, Automobile Service Association

Touhey then went to the venue’s actual site (a venue he once managed) and immediately found Seats 15 and 16 in Section 2, Row P, at an all-in cost of $637.40. The reseller also knew those seats existed, and had Touhey purchased them from him, he presumably would have gone to the venue’s site and bought them to resell to Touhey at a markup of $865.60, a huge profit with no risk to the reseller.

“When I talked about the markup of tickets, going on a secondary site and finding two tickets, then going on a primary site and finding basically the same tickets,and they were marked up almost $800, I looked up to see the reaction. There were quite a few members paying attention to my testimony, and you could see a sort of shock, a ‘Wow, that’s a lot,” Touhey said.

Touhey was given five minutes toward the beginning of the two hour, 30 minute hearing to state his case. After each of the witnesses had their five minutes, the hearing moved to questions, most of which were for further information. “The committee on this is fairly bipartisan,” Touhey noted. “I didn’t feel like I was getting different questions from the left or the right. They were trying to learn.”

Touhey worked with IAVM’s lobbyist, Elizabeth Frazee of TwinLogic Strategies, and IAVM’s Committee on Industry Affairs, of which he is vice chair, on the content of his testimony. Some of it came from his pre-testimony interviews with the committee staff, whom he met with the Friday prior.

“I had some more real-time examples of tickets from a tour that doesn’t go on sale till next week that have tickets ‘available ’on some sites already. I had done it with some of the staff, and they went to the websites themselves,” Touhey said.

“After the hearing, I told someone to go back to your office and look at MorganWallen.com. You can see six to eight tour dates he announced for next spring or summer. He says they don’t go on sale until next week. Then go to secondary sites, and you can see you can buy tickets for those dates, but if you go to the primary site, all you can do is register to purchase those tickets. That’s a speculative ticket,” Touhey said.

The Fix the Tix Coalition’s goal is for them to ban speculative tickets, to make it illegal to list tickets you don’t have, Touhey said. Only the ticket reseller benefits from this large mark up. No one associated with the event does — not the artist, not the venue, and not the promoter, he told the subcommittee.

Touhey said the members didn’t ask as many questions as he’d  thought they would and he had prepared for. Nor did they ask some he wished they had, some which his written and spoken testimony somewhat addressed.

THE EXPERIENCE

It was an interesting week for Touhey, who did not know till the Friday prior that he would be testifying on Wednesday morning. He has talked with Congressional staff about different legislative issues over the past year, but never testified at a committee hearing.

“I’ve been in D.C. almost 20 years and only in the past year and a half have I been to the Capitol for anything other than to go to the Visitors Center when guests came in from out of town,” Touhey said. “Now I’ve done the ultimate and testified before Congress.”

He joked that “the most comprehensive study I’ve done of a Bill Becoming a Law was the cartoon “Schoolhouse Rock” on TV as a kid. Some things stick with you. The show had different educational components and one was the How a Bill Becomes a Law song.” Honestly, though, he has more total recall of Schoolhouse Rock’s “Conjunction Junction, What’s Your Function?” on the rules of grammar.

For a bill to become law, it has to be read out of the committee first. Of the three ticketing bills, the Ticket Act has bipartisan support and could move out of committee pretty quickly, he said. The Boss and Swift Act is backed by Democrats and needs Republican support to be fully introduced. The Speculative Ticket Draft could possibly to be incorporated into existing discussion, he added.

The view of the subcommittee hearing dais from where Dave Touhey sat at the witness table.

Tapped on Friday at 6:30 p.m. to be the witness for IAVM, Touhey then learned the written testimony had to be submitted by 10:30 a.m. Monday. He had a full weekend of sports events and even a camping tripped planned, but he was going to multi-task around that. However, Tropical Storm Ophelia interrupted his outdoor plans, so he hunkered down to write.

After submitting the 1,700-word written testimony, he went to work on the spoken testimony. He had learned from prior experience that it takes five minutes to say 700-800 words. Monday, he worked with IAVM’s lobbyists and Bobby Goldwater, CVE, of Georgetown University on questions he might be asked.

The spoken testimony is a summary of the written testimony and both are part of the official record, he said. In the end, his speech was just under five minutes. “I looked up at the timer towards the end, and I had more time than I thought I was going to,” he remembered, flashing back to the fear he was talking too fast.

Sitting at the witness table, you never know when you are on camera, he added. He quickly realized if the witness to either side of him was talking, he, too, was in the picture. And you always have to be anticipating a question from whatever member is speaking. As one staffer on the Hill told him, being a witness at a Congressional hearing is “like Little League. You don’t want to be caught picking daisies in the outfield.”

The feedback has been good, Touhey said. He even got feedback while at the witness table and was able to sneak a look at his watch to respond to a text from Tammy Koolbeck, CVE.

“The challenging thing about all this advocacy is that unless you’re paying attention to it, you don’t always know it’s coming up, but it’s very important to this industry,” Touhey said. “This showed me a little more how the government works. There’s a lot more behind the scenes than you realize when you watch testimony, not that I’ve watched a lot.”

When being evaluated to be a witness, he met with the staff from both sides. “Staff working on the draft who asked me questions have those answers. Though it didn’t happen in the actual hearing, it’s still part of the process,” Touhey said.

THE MESSAGE

Post hearing, the Industry Affairs Committee met per usual Friday morning, and the subject of deceptive URL’s dominated the conversation.

It’s a nuance Touhey had to explain to a Capitol Hill staffer, who asked, ‘if I go to StubHub, and  it says Capital One Arena, is that deceptive?’ No, you are on StubHub, and their logo is on that site. You are looking at their Capital One sales page, but it clearly says StubHub or SeatGeek or Ticketmaster. What we’re trying to target is when you Google Capital One Arena or Arena in Washington, D.C., and up pops a site that is WashingtonArena.com or Washingtontickets.com. When you go on it, it has a logo that looks like the building’s or it has a picture of the building and it has other information about the building, trying to make it look like the venue’s website. That’s deceptive.”

The deceptive site Touhey found for Capital One Arena, says Capital One Arena on it, but in a lot of the language it still says Verizon Center, the arena’s former name. They even have some of the venue’s rules, but they don’t even have an up-to-date bag policy, he added.

Deceptive URL website could have valid tickets, but they are still scalper tickets, still being resold. Or tickets might never come, as happened for some Taylor Swift shows. “Those people had booked flights and hotel rooms to go to an out-of-town stadium to see the show,” Touhey noted in his testimony.

“If you don’t have the actual ticket in your possession, you shouldn’t be able to list it for sale. There should be a fine or punishment if someone’s caught listing a speculative ticket.”

It’s fraud, but it’s a very gray area. The FTC website where consumers report fraud is geared toward issues like stolen credit cards, not speculative tickets.

Another nuance to this issue is that a lot of these speculative sites are “secure” in that they have the lock icon, but that just means they are PCI compliant with credit card processors. “It’s a legitimate credit card account, a legitimate charge. That has nothing to do with the legitimacy of the site,” Touhey said.

Touhey was pleased with points he was able to make and allowed in his observation that none of the bills introduced go far enough in addressing the real issues.

“I think we will have the opportunity to get some of the language changed and addressed for speculative tickets and hopefully get some deceptive URL language inserted. That would be a great first step, but there is a lot that needs to be done to really Fix the Tix problem,” Touhey said. “If we can get a couple of the problems fixed, that’s a lot better than where we are now.”

More than that, he urged all IAVM members to stay involved as this issue progresses.

“When we call or email to ask you to reach out to a politician, a Congressman, or Senator, please help us out,” Touhey urged IAVM members. “Pay attention to ticketing, because if unchecked, the secondary market has a very active lobbying group and will get language and legislation that benefits them under the guise of being beneficial to the consumer. That will really hurt venues, artists,

and consumers.”

For a long time, venues didn’t have to get involved in politics, he believes. “Only recently have there been these types of issues, effecting how we operate as venues. We need to stay ahead of it.”