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Legislation Document
SPONSOR:
Sen. Seigfried
Rep. Heffernan
DELAWARE STATE SENATE
153rd GENERAL ASSEMBLY
SENATE BILL NO. 181
AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE REGARDING THE SECONDARY TICKETING MARKET.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
CHAPTER 25N. Sale and Resale of Event Tickets.
§ 2501N. Definitions.
As used in this chapter:
(1) "Bot" means any machine, device, computer program, or computer software that, on its own or with human assistance, bypasses security measures or access control systems on a retail ticket purchasing platform, or other controls or measures on a retail ticket purchasing platform that assist in implementing a limit on the number of tickets that can be purchased, to purchase tickets.
(2) “Division” means the Division of Consumer Protection of the Department of Justice established in § 2517 of Title 29.
(3) “Fan Club” means a membership-based program, primarily established by venues, artists, or performers to offer pre-sale opportunities before public on-sale of tickets.
(4) “Primary Ticket Seller” means, with respect to an event ticket, any person who has the right to sell the event ticket prior to or at the primary sale of the ticket, including the event organizer, or any person that provides services to conduct or facilitate the primary sale of event tickets by or on behalf of the event organizer.
(5) "Resale" means the second or subsequent sale of a ticket by any method, including in-person transactions, telephone, mail, email, facsimile, or electronic means through websites or mobile apps.
(6) "Reseller" means a person engaged in the resale of tickets.
(7) "Secondary Ticket Exchange" means an electronic marketplace enabling the sale, purchase, and resale of tickets.
(8) "Speculative Ticket" means a ticket not in the actual or constructive possession of the reseller at the time of listing, sale, or advertisement. This includes tickets not owned by the reseller or under contract to be transferred to the reseller at the time of sale.
(9) "Ticket" means any form of physical, electronic, or other evidence that grants the possessor of the evidence license to enter a place of entertainment for one or more events at a specified date and time.
(10) "Ticket Issuer" refers to a person or entity that issues tickets for initial sale, including musicians, venues, promoters, theater companies, event organizers, marketplaces for initial purchases, or their agents.
§ 2502N. Ticket disclosure requirements.
(a) This section applies to primary ticket sellers, secondary ticket exchanges, ticket issuers, and resellers.
(b) The following information must be clearly and conspicuously disclosed prior to payment information being required:
(1) The total price of the ticket, including all fees, taxes, and any additional charges other than shipping costs that may vary based on delivery options.
(2) An itemized breakdown of all components of the total price, including taxes, service charges, and other fees.
(3) Seat number or section of the ticket, where applicable, based on the venue's seating arrangement.
(c) The total price, including all fees, taxes, and applicable shipping costs, must be clearly disclosed before the final purchase. Shipping costs may vary by location and delivery method.
§ 2503N. Prohibition of speculative ticket sales.
A reseller may not sell or offer to sell speculative tickets, tickets not in the reseller's possession and ownership, or under contract at the time of the listing, sale, or advertisement.
§ 2504N. Presale restrictions.
(a) A primary ticket provider, reseller, secondary ticket exchange, or any affiliate of these parties may not resell a ticket until tickets to the event have been placed on sale by the venue, event organizers, or their authorized agent. For purposes of this section, “placed on sale” means the date and time when tickets are made available for sale to the general public, excluding any prior sales to fan clubs, businesses, and persons for promotional activities. This paragraph does not apply to season or subscription ticket holders.
(b) A ticket reseller, secondary ticket exchange, or any affiliate of these parties may not access, obtain, or resell a ticket through a fan club program before tickets are placed on sale.
§ 2505N. Transferability and restrictions on tickets.
(a) A theatrical exhibition, public show, public amusement or exhibition, or an agent thereof, may not restrict the transferability of a ticket sold unless the terms and conditions of the restrictions on transferability are clearly and conspicuously provided to the consumer prior to purchase and the consumer acknowledges receipt of such disclosure prior to purchase.
(b) A ticket of admission to a theatrical exhibition, public show, public amusement or exhibition must be considered a license. Venue operators, or operators’ agents, may maintain and enforce policies, conditions, or requirements for ticket purchase with respect to conduct, behavior, public health and safety, or age at the venue or event and may establish limits on the quantity of tickets that may be purchased.
§ 2506N. Refund requirements.
(a) A ticket issuer, secondary ticket exchange, or reseller directly engaged in a transaction with a purchaser must provide a full refund, including all fees and taxes, under the following conditions:
(1) The ticket is counterfeit.
(2) The event is cancelled.
(3) The ticket does not conform to the description provided at the time of purchase.
(b) A refund must be issued within 10 days of the event's cancellation or discovery of non-conformance.
§ 2507N. Ban on deceptive URLs and improper use of intellectual property.
(a) It is unlawful for a secondary ticketing exchange, reseller, or the operator of any website purporting to sell or offer for sale event tickets that links or redirects to a secondary ticketing exchange or reseller, to do any of the following:
(1) Use any artist name, venue name, or event organizer name, graphic, marketing logo, image or other intellectual property of the artist, venue, or event organizer including any proprietary resemblance of the venue where an event shall occur in promotional materials, social media promotions, or URLs of the secondary ticketing exchange, reseller, or website without the prior authorization of the respective artist, venue, or event organizer under the terms of agreement between the artist, venue, or event organizer and the secondary ticketing exchange, reseller, or website.
(2) State or imply that the secondary ticketing exchange, reseller, or website is affiliated with or endorsed by a venue, team, or artist, as applicable, including by using words like "official" in promotional materials, social media promotions, search engine optimization, paid advertising, URLs, or search engine monetization unless the secondary ticketing exchange, reseller, or website has the express written consent of the venue, team, or artist, as applicable.
§ 2508N. Prohibition on circumvention of internet ticket sales limitations.
(a) A person may not use or create a bot, or employ any other method, to do any of the following actions:
(1) Purchase tickets for any single internet ticket sale.
(2) Use multiple Internet Protocol (IP) addresses, purchaser accounts, or email addresses to purchase tickets in excess of eight tickets, or the posted limit if less than eight tickets, for any single internet ticket sale.
(3) Circumvent or disable an electronic queue, waiting period, presale code, or other sales volume limitation system associated with an internet ticket sale.
(4) Circumvent or disable a security measure, access control system, or any other control or measure used to facilitate authorized entry to an event.
(b) A primary ticketing platform shall report any known circumvention or attempted circumvention of the prohibitions in subsection (a) of this section to the Division within 48 hours of discovery.
(1) The report must include the following:
a. A description of the incident, including the nature of the circumvention.
b. Any available information about the individuals or entities involved.
c. Measures taken or planned to prevent further circumvention.
(c) The primary ticketing platform shall retain all relevant records of the incident for a period of one year and make them available to the Division upon request.
§ 2509N. Price cap on secondary ticket exchange.
(a) The total price at which a reseller may sell or offer to sell a ticket may not exceed the total price of the initial ticket, including all fees and taxes in connection with the initial ticket.
(b) The fee that a secondary ticket exchange may charge for the service of providing a marketplace for the resale of a ticket may not exceed 10% of the total price of the initial ticket.
§ 2510N. Event ticket reseller registration and reporting requirements.
(a) Any individual or entity that resells 100 or more event tickets per year above a ticket’s original total price must register annually with the Division as an event ticket reseller before conducting any ticket resale activity. The resale of tickets as part of a season ticket package for a sports team, where the buyer purchases tickets for half or more of all home games, may not count toward the 100-ticket threshold.
(b) Entities or individuals under common ownership or control shall be considered a single event ticket reseller for the purposes of determining registration requirements.
(c) Each event ticket reseller must provide the following information to the Division at the time of registration:
(1) Full legal name, any aliases, or usernames used for ticket resale.
(2) Contact information including a physical street address, email address, and phone number.
(3) Employer identification number (EIN), if applicable, and the contact details of any employer.
(4) All associated entities or subsidiaries involved in ticket resale.
(5) Any other information required by the Division.
(d) A registration fee, set by the Division, shall be assessed to cover the costs of compliance and enforcement.
(e) Registered event ticket resellers must submit biannual reports to the Division containing all the following information:
(1) Total number of event tickets sold.
(2) The original purchase price of each ticket.
(3) The final resale price of each ticket.
(f) All reports maintained under subsection (e) of this section must be treated as confidential and used solely for compliance and enforcement purposes.
§ 2511N. Bond requirements.
(a) Registered event ticket resellers must maintain a surety bond of no less than $10,000 to ensure compensation to consumers in cases where the reseller fails to deliver purchased tickets or engages in fraudulent activities.
(b) The bond must cover compensation for lost funds, including travel expenses incurred by the consumer if the reseller fails to deliver the purchased tickets.
(c) The Division shall periodically review and adjust the bond amount based on the reseller’s sales volume and consumer complaint history.
(d) Proof of the bond must be submitted to any secondary ticket exchange before listing tickets for resale on that platform.
§ 2512N. Secondary ticket exchange responsibilities.
(a) Secondary ticket exchanges must maintain records of all registered event ticket resellers using their platform and verify that each reseller meets state registration and bonding requirements.
(b) Secondary exchanges must report any unregistered resellers to the Division.
(c) Secondary exchanges are responsible for maintaining records of ticket sales, including the number of tickets sold and resale prices, and must submit biannual reports to the Division.
§ 2513N. Consumer compensation.
(a) In cases where a registered event ticket reseller fails to deliver tickets, the affected consumer shall be entitled to compensation from the reseller’s bond. This compensation may include reasonable travel expenses such as airfare, hotel accommodations, and meals.
(b) The secondary ticket exchange that facilitated the sale must coordinate the compensation process and ensure the release of funds from the bond within 60 days of the event date.
§ 2514N. Audit and oversight.
(a) The Division may conduct periodic audits of both event ticket resellers and secondary ticket exchanges to ensure compliance with this section.
(b) Resellers and exchanges are required to cooperate fully with audits and provide any requested documentation.
§ 2515N. Public access to registered resellers.
(a) The Division shall maintain an up-to-date list of registered event ticket resellers, which must be made available to the public via the agency’s website.
(b) This list must be updated at least once every 30 days and shall include information on any violations of this chapter within the past 5 years.
§ 2516N. Revocation of registration.
The Division may revoke the registration of any event ticket reseller found to be in violation of this chapter for a period of at least 1 year and not more than 5 years.
§ 2517N. Penalties, reporting, regulations, and enforcement.
(a) A violation of this chapter shall be an unlawful practice under § 2513 of this title.
(b) Any person who violates this chapter is subject to the following civil penalties:
(1) A base penalty of at least $15,000 for each day the violation occurs or continues.
(2) An additional penalty equal to the greater of either $1,000 per ticket listed, advertised, sold, or resold in violation of this chapter, or an amount equal to five times the total ticket price of each ticket listed, advertised, sold, or resold in violation of this chapter.
(c) Any person found to have intentionally violated this chapter shall be liable for an additional civil penalty of at least $10,000 per ticket sold or resold in violation of this chapter.
(d) The Division shall establish a publicly accessible website to allow individuals to report violations of this chapter. The Division may coordinate and share information on reported violations with relevant law enforcement agencies as needed for enforcement.
(e) The Division shall prepare an annual report on enforcement actions and penalty collections taken as a part of this chapter, to be submitted to the Division and made available to the public.
(f)
The Division is authorized to interpret, implement, and enforce this chapter, including the issuance and implementation of regulations. Any regulations the Division promulgates shall have the force and effect of law and may be relied on to determine rights and responsibilities under this chapter.
Section 2. This Act is effective immediately and is to be implemented the earlier of the following:
(1) 1 year from the date of the Act’s enactment.
(2) Notice by the Division published in the Register of Regulations that final regulations that final regulations to implement this Act have been promulgated.
SYNOPSIS
This Act prohibits certain actions regarding the sale and exchange of tickets for events in this state by primary ticket sellers, ticket issuers, and ticket resellers. The Act requires a clear and conspicuous disclosure of fees and costs associated with the total cost of a ticket being provided to a purchaser before the purchaser’s payment information is requested. The Act prohibits the reselling of a ticket until the event is placed on sale to the general public, including any tickets that may be obtained or accessed through a fan club. The Act sets forth requirements regarding transferability of tickets, refunding of tickets, and bans on the use of deceptive practices for any reselling of a ticket.
The Act prohibits use of a bot or other methods used to circumvent reasonable restrictions on the sale of tickets on the internet. The Act places a cap on prices in which a reseller can offer or sell a ticket at 10% of the total price of the initial ticket price. It also places a requirement upon any person who resells 100 or more tickets per year to register with the Division, excluding tickets that are bought for sporting events as part of a season ticket package. The Act requires registered resellers to provide certain identifying information and submit a report every two years summarizing the total tickets sold, the original purchase price of each ticket, and the final resale price.
The Act requires a surety bond requirement upon registered resellers to protect consumers in cases where the reseller fails to provide tickets. The Act provides authority for the Division to audit registered resellers, maintain a list of all registered resellers that is available to the public, and revoke a registration of a reseller for violation of this chapter. The Act establishes penalties and provides the Division with authority to adopt regulations.
The Act is effective immediately and is to be implemented the earlier of 1 year from the date of enactment or notice of publication within the Register of Regulations that final regulations have been promulgated.
Author: Senator Seigfried