Did the BOTS Act clean up?
One year on from the passage of the BOTS Act, Niels Sodemann (CEO, Queue-it) and Rami Essaid (Co-founder, Distil Networks) explore its impact on the ticketing ecosystem.
Rami Essaid, CEO of Distil Networks and Niels Sodemann, CEO of Queue-it, hosted a conversation that reviewed recent U.S. legislation around security on online ticket sales and the key points in a major onsale where primary ticket sellers are still vulnerable to fraudulent activity.
Bots first entered popular consciousness in 2016 with the passing of the BOTS Act, and have further established their mainstream presence through messaging and social media bots. They continue to be fought with legislation across the globe — most recently with Ontario’s Ticket Sales Act — however the ticketing industry has been fighting bots for years.
In the US, the Better Online Ticket Sales (BOTS) Act prohibits the use of software to jump to the front of the line and buy up inventory during online ticket sales. The legislation permits fans to have a greater opportunity to purchase tickets at face value as they first become available online.
The law grants enforcement to the Federal Trade Commission (FTC), which can take civil action against those who use bot software. It also allows state attorneys general to take similar action.
The BOTS Act applies to public concerts, theatre performances, sporting events, and similar events at venues having a seating capacity over 200. And it addresses more than purchasing—Congress also made it illegal to sell tickets if the seller participated in their illegal purchase or knew (or should have known) that they were acquired in violation of the law.
New York State had passed its own version of the law in November 2016. And after BOTS Act passage, in June 2017 Nevada’s attorney general was empowered to directly prosecute bot developers, as opposed to waiting for the FTC to take action.
Other countries took note following passage of the BOTS Act in the US a year ago. Industry stakeholders are taking action to minimize the business impact of bad bots and comply with new legislation, including:
- Filing lawsuits
- Tying tickets to IDs & online purchases
- Creating verified fan programs
- Installing bot mitigation solutions on their ticketing engines
- Going paperless
Being very similar to the BOTS Act, the UK passed its own version in April 2017, criminalizing the use of ticket bots. The key difference is that it requires secondary sellers to provide a unique ticket number along with seat or standing location details. The law has received royal assent; lawbreakers face unlimited fines.
This province passed its own BOTS Act version in December 2017 that is similar to that of the UK. It provides a broader regulatory power than that of the US.
The Canadian law:
- Forces ticket sellers to publicize how many tickets will be on sale for a given event, as well as the venue capacity
- Requires resale prices to be capped at no more than 50 % above the original price and that online sellers have to disclose all surcharges upfront
Enacted in January 2018, this state was the first to pass a law outlawing ticket scalping bots. Victoria is introducing a similar law.
- Caps resale ticket prices within 10% of the original price
- Prohibits ads for ticket resales that exceed the 10% cap
While these initiatives help ensure the integrity of online ticket sales, they don’t address all of the ways fraudsters take advantage of major online ticket sales.
- Ticketing industry bot traffic has increased by 20% within the past year
- Bots are an advancing technologically—distributing their attacks over thousands of IP addresses
- There is an increase in bot traffic from infected devices (i.e., mobile)
In Russia, bots have taken over end-users’ personal computers and mobile devices, making them part of botnets used in the ticket-scalping process. Blocking individual devices that are a part of a botnet might impact legitimate customers. This makes it all more difficult to discern between good and bad requests.
Legislation alone is not enough to beat scalpers and their bots use. As a venue, organization, or ticketing software platform, the onus remains on you to defend against such fraudulent activity during your online sales. Although the laws aim to undercut both profit incentive and resale abilities, enforcement remains difficult in relation to bots originating outside a given region where these laws exist.
This viewpoint is a summary of a panel discussion at last month’s INTIX. The views expressed are solely those of the authors.