Three New York Ticket Scalpers Are Scalped for $3.7 Million

Pre-COVID concert tickets

Former President Barak Obama's 2016 anti-ticket-scalping law finally saw its first case, costing three New York-based ticket resellers millions of dollars. The Federal Trade Commission has fined Cartisim Corp., Concert Specials, Inc., and Just In Time Tickets, Inc. a total of $3.7 million in civil penalties for violating the Better Online Ticket Sales (BOTS) Act. The original fine was $31 million, but was lowered due to the inability of the companies to pay the higher judgment.

The Better Online Ticket Sales (BOTS) Act of 2016 criminalizes the use of ticketing bots, which is software capable of purchasing thousands of tickets within seconds of their sale. The BOTS Act grants the FTC the authority to take law enforcement action against individuals and companies that use bots or other means to circumvent limits on online ticket purchases. The law allows the federal agency to file suits on behalf of potential customers who cannot purchase tickets because of the powerful dominance of bots. Republican Kansas Senator Jerry Moran sponsored the bill, saying it would "level the playing field" for customers of ticketing sites. President Obama signed the bill into federal law just before he left office in December 2016.

The FTC charged that three companies used automated ticket-buying software to illegally buy more than 150,000 tickets for popular concerts and sporting events. The FTC detailed that the companies violated the BOTS Act in several ways, using bots to search for and reserve tickets automatically, software to conceal their IP addresses, and hundreds of fictitious Ticketmaster accounts and credit cards to bypass the posted purchase limits. The defendants generated millions of dollars in revenues from the resale of the tickets they purchased using these unlawful means.

"These ticket brokers used bots and other technical tricks to scoop up thousands of tickets to popular events as soon as they went on sale," said Andrew M. Smith, Director of the FTC's Bureau of Consumer Protection. "Not only does this deprive loyal fans of the chance to see their favorite performers and shows, it is against the law."

Under the terms of the proposed orders, the judgments against the defendants for civil penalties were as follows:

• $16 million against Concert Specials, Inc. and Steven Ebrani, which was partially suspended due to an inability to pay. The company will pay a reduced amount of $1,565,527.41.
• $11.2 million against Just In Time Tickets, Inc. and Evan Kohanian, which was partially suspended due to an inability to pay. The company will pay a reduced amount of $1,642,658.96.
• $4.4 million against Cartisim Corp. and Simon Ebrani, which was partially suspended due to an inability to pay. They will pa The company will pay a reduced amount of y $499,147.12.

Altogether, the defendants will pay over $3.7 million in civil penalties, which will be deposited into the U.S. Treasury. Under the terms of the proposed orders, if the defendants are found to have misrepresented their financial condition, the full amounts of the penalties would be immediately due. Furthermore, the judgment also prohibit the defendants from further violations of the BOTS Act, including using methods to evade ticket limits, using false identities to purchase tickets, or using any bots to facilitate ticket purchases.

"The Act's bipartisan sponsors sought to crack down on the abuses that unscrupulous actors inflict on consumers whose typing fingers were no match for algorithms in attempting to secure tickets online," FTC Acting Chairwoman Rebecca Kelly Slaughter said in a statement. Slaughter worked on the BOTS Act while employed by Senator Chuck Schumer. "The settlements our staff negotiated with these alleged BOTS Act violators make clear that serious consequences will befall those who cheat fans out of a fair shot to secure tickets to live events."