The Fair Trading Amendment (Ticket Scalping and Gift Cards) Bill 2017 seeks to address growing problems with ticket reselling, or scalping, using so-called bots and associated technology. The bill also prohibits the sale of gift cards with an expiry of less than three years. Although the resale of tickets to live music, entertainment or sporting events is nothing new, advances in technology are making the practice increasingly difficult to manage and regulate. Far from the old days when scalpers or "ticket brokers" would purchase tickets and stand outside events in trench coats hoping to make a buck, automated bots now gobble up tickets online and resell them at exorbitant prices. Although no reliable data is available on transactions deployed by bots in Australia, Ticketmaster has alleged that its United States store was hit by 5 billion bot attempts to purchase tickets in 2016 alone. Australian fans of Adele, Midnight Oil or Justin Bieber allegedly watched tickets to concerts being snapped up and then resold for 10 times the original cost.
The recent Australian Football League and National Rugby League grand finals were reportedly targeted. Bots are potentially behind the absurd situation of $30 Sydney Ashes test tickets now selling for more than $1,500—hardly the spirit of summer. Behind the bots are sophisticated anonymous operations often based in tax havens such as Gibraltar or the Caribbean, masked with proxy IP addresses. Using powerful algorithms, they are able to purchase huge numbers of tickets. One United States bot company could amass up to 20,000 tickets in a couple of minutes before it was shut down. As the technology used to execute scalping streaks ahead, fans are being left behind, and that is what this legislation seeks to address.
This legislation follows a motion in the Federal Senate in March this year calling for the outlawing of ticket bots. It follows a blanket ban put in place in the United States by President Obama in December 2016 and the decision by the Australian Consumer and Competition Commission to take ticket resale site Viagogo to the Federal Court over a string of alleged breaches of consumer law. The bill prohibits ticket bot activity, legislating a mechanism by which event organisers can pursue people who profiteer from bot technology. This is sensible in theory; however, it raises significant questions as to whether regulation will be able to keep pace with technology.
It is interesting to note that, since the United States implemented its prohibition on ticket bots in 2016, there have been no meaningful prosecutions under the legislation. Consumer groups such as Choice have raised questions as to whether the legislation will sufficiently allow for companies using bots to be prosecuted if they are located overseas. Choice and other organisations have noted that similar laws in Queensland have been flouted, with the Government apparently unable to pursue shady overseas operators. The Minister must provide assurances that this legislation will allow for the prosecution of operators in overseas jurisdictions. This is imperative, as the vast majority of operators using bots are located overseas, masking their identities with proxy IP addresses.
The Opposition moved a sensible amendment to bring the statutory review of the legislation forward three years to more adequately address any regulatory lag, and I am disappointed that the Government will not support it. We must ensure that the regulation of the industry keeps up with fast-moving technology. A statutory review in three years would have better equipped us to deal with that problem. The bill prohibits the resale of tickets for more than 110 per cent of the original ticket price and prohibits advertising tickets for more than 100 per cent of the original cost. This promises to restore some balance to a market that has tipped away from fans. Queensland has imposed a similar cap, with operators subject to fines of up to $2,400 and with buyers also liable for fines. I note concerns raised by some domestic resellers that a cap may have unintended consequences of raising ticket prices. A cap may distort the primary market for ticket sales—that is, sales direct from the promoter—and the secondary market, where tickets are resold through third agents. It is critically important that this legislation do what it is intended to do: reduce profiteering and ensure that tickets end up in the hands of fans.
The consideration of a licensing scheme for secondary market resellers may help to bolster that aim. Importantly, the bill requires promoters and event organisers to publicly disclose details of ticket allocations for public sale, instilling greater transparency in the industry for fans and customers. That is a good thing. It promises to provide greater transparency around the number of tickets that are available to the public in the first place, as well as tickets sold to industry insiders or pre-sold. This is one of the primary concerns raised by resellers and fans alike, who often discover that only a fraction of the tickets at an event were ever available for the public, therefore driving up the cost. Disappointingly, the legislation fails to address fraudulent ticket sales.
Following the sale of fraudulent tickets hitting endemic levels, major Queensland venue the Queensland Performing Arts Centre now issues regular warnings to patrons. In Perth over the past six months 350 patrons have been turned away from Perth Arena at 14 events, including a Guns N' Roses concert, because they had purchased fraudulent tickets. While this legislation is a positive step, more must be done to stamp out fraudsters taking advantage of fans, including investing in technology to better apply protections in the industry.
For example, some overseas festivals now print a photograph of the purchaser on the ticket. Harry Styles fans will be required to check in before the concert when he tours later this year. This bill does not address these issues and may not reduce the potential disappointment of patrons. I believe it is wise to warn the Minister that there is nothing more dangerous than disappointing a Harry Styles fan.
With respect to the second schedule to the bill, I support moves to prohibit the sale of gift cards with an expiry date of less than three years. Again, that is a good move. We know gift cards are popular items that can easily end up in the bottom of boxes, sock drawers and handbags, only to be discovered after their expiry date. An estimated $60 million stays in the hands of retailers each year thanks to unused gift cards. This bill is a huge victory for Choice, which is located in my electorate of Summer Hill. I congratulate Choice and other consumer advocates who have been pushing for this important reform for many years.
Along with my colleagues, I call on the Minister not to force consumers to wait any longer and to bring these rules in before 1 December this year so that consumers can benefit from the legislation over the Christmas period. We do not want cards from relatives to end up lost and for consumers miss out—that would be disappointing when the legislation is before us now. This bill acts to crack down on the reckless profiteering of shady characters in the ticket resale industry. While this is a positive step forward for consumers, the bill would be far more effective with some of the sensible amendments proposed by this side of the House. However, we do not oppose the bill and we welcome the positive steps forward.