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Crime The Almighty Buck Entertainment

Scalpers Earned $25M Gaming Online Ticket Sellers 574

SeattleGameboy writes "An indictment has been issued for online ticket brokers known as 'Wiseguy Tickets and Seats of San Francisco.' From 2002 to 2009, they used bots, server farms, and CAPTCHA hacking to buy vast number of premium tickets (Springsteen, Miley Cyrus, NFL, MLB playoffs, etc.) and made $25 million in profits. 'They wrote a script that impersonated users trying to access Facebook, and downloaded hundreds of thousands of possible CAPTCHA challenges from reCAPTCHA. They identified the file ID of each CAPTCHA challenge and created a database of CAPTCHA "answers" to correspond to each ID. The bot would then identify the file ID of a challenge at Ticketmaster and feed back the corresponding answer. The bot also mimicked human behavior by occasionally making mistakes in typing the answer, the authorities said.' I guess you can break any system like CAPTCHA if you want it badly enough."
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Scalpers Earned $25M Gaming Online Ticket Sellers

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  • by MichaelSmith ( 789609 ) on Tuesday March 02, 2010 @06:51AM (#31328068) Homepage Journal

    To be honest I don't see what they have done wrong. Their actions are no different from normal retailing. You buy low at a bulk supplier and sell high to individuals.

    Sellers could cut them out by raising their prices so that demand matches supply.

  • by twisteddk ( 201366 ) on Tuesday March 02, 2010 @07:00AM (#31328100)

    It's illegal because the artist, locationowner and distribution company are the ones supposed to make the money off the tickets, so a fixed price is agreed upon, and the royalties etc. are contractually determined in advance. Anything more is "scalping" because the scalper gets the money rather than the artist, who is usually the recipient of up to 50% of the ticket sales.

    So if 20.000 tickets are sold for $50 each, thats $1M, of which half goes to the artist. Simple math. BUT, if 1000 of those tickets are sold for say, $100, by the terms of the contract, the artist is supposed to get half of 19.000x$50 + 1000x$100 and who pays the extra ? 'coz the scalper sure doesnt. Thus he is in breach of a few copyright holders laws (at least in Europe, not sure about the US, but judging by the latest ACTA docs leaked, I'm assuming it's much worse in the states). So it IS illegal. WHY, on the other hand is a different matter. Some people might argue that free enterprise means that pricefixing shouldn't happen, and that the scalpers actions are a part of the normal market mechanisms. But in actuality, it's the copyright laws that makes it illegal, not the pricefixing (and had this been gas or food sold, it'd probably be legal)

    In most countries, scalped tickets gets electronically revoked. So even buying a scalped ticket is often a gamble.

  • by peragrin ( 659227 ) on Tuesday March 02, 2010 @07:05AM (#31328134)

    that's just it they paid retail for tickets so the artist and the stadiums made the money they thought they were going to anyways.

    scalpers usually buy tickets at normal prices and then sell them for more. now sometimes they do under cut the theaters or staduims but most of their money is on big games. were the $30 cheep seats suddenly become worth $70 or more.

  • by RuBLed ( 995686 ) on Tuesday March 02, 2010 @07:12AM (#31328164)
    They are an unnecessary middle man. In line with your comparison, they are hoarding the goods from the ones selling to individuals themselves then raise the price because they now have most of the supply.
  • by noackjr ( 541550 ) on Tuesday March 02, 2010 @07:20AM (#31328202)

    Tickets for Waits' summer shows were limited to two per person but, in an effort to beat ticket touts, a valid I.D. (passport or driving licence) matching the name on the ticket was required to gain entry. Any concert-goer who did not have a valid I.D. or was found to be in possession of a ticket that had been resold – electronic scanners were employed – was not allowed in and did not get a refund.

    If you RTFA (I know...), you'll note:

    The perpetrators took orders from ticket brokers, who were required to provide credit card numbers and account holder names in advance of a purchase so they could be programmed into the bot.

    All they would have to do to defeat the ID requirement is add that to the list of items they need to purchase the tickets. And people would still pay extra to them because 1) they wouldn't have to try very hard to get a ticket, and 2) they would have a much higher chance of getting a ticket.

  • by asdf7890 ( 1518587 ) on Tuesday March 02, 2010 @07:23AM (#31328218)

    What's illegal about what they have done??

    There system obtained access to resource (the tickets) under false pretences (pretending to be different individual people rather than one organisation). That, I believe, is fraud.

    Anyway, the poster you replied to stated "legitimately", not "legally". In common parlance "legitimate" covers both "legal" and "moral", and taking advantage of people in this way is generally seen as NotTheDoneThing. If you had to pay twice as much (or sometimes it can be several times as much) for something that you wanted simply because a group like that had gamed the market, would you be happy to pay up and consider that everything was proper and above board?

  • by Doug Neal ( 195160 ) on Tuesday March 02, 2010 @09:43AM (#31328996)

    Not really [].

    From the same page: "Left-libertarianism combines the libertarian premise that each person possesses a natural right of self-ownership with the egalitarian premise that natural resources should be shared equally."

  • by Moraelin ( 679338 ) on Tuesday March 02, 2010 @09:58AM (#31329142) Journal

    Except, as here, it can be done in advance. Once you can generate an ID of that image -- and that can mean simply a hash value of it -- you can store it in a database, and use it in that small window of oportunity when you need it.

    Virtually every captcha I've seen applies a transformation or two of that image, from a small set of effects. So effectively you can end up with just one image for a given word, or a small finite set of distinct images. Add to that the fact that most use words from the dictionary, and the set of data you must store is actually very manageable.

    Some transformations can even be filtered out before you hash, even if you don't automatically do an OCR on the word afterwards anyway. E.g., mixing colours can just mean you filter it to black and white before hashing, or theoretical more complex stuff (which I haven't seen actually used) can be defeated by contour tracing before you hash.

    Once you have a way to get people to crack those for you, be it by reusing them for a "free" porn site or just paying some chinese kid a dollar an hour to crack captchas for you, you essentially just need some kind of caching to squeeze that information in the actual time window.

  • by brian0918 ( 638904 ) <(moc.liamg) (ta) (8190nairb)> on Tuesday March 02, 2010 @10:14AM (#31329326)
    Scalping is a legitimate profession that serves a useful spot in the market. They provide convenience for customers, and help event ticket pricers determine what people are willing to pay. Not to mention the "scalpers" who are individuals trying to get their money back, for whatever reason - whether due to time conflict, or emergency financial situation, etc.

    Or rather, scalping *would* be a legitimate profession, if people would embrace them, rather than try to shut them down.
  • by AGMW ( 594303 ) on Tuesday March 02, 2010 @10:38AM (#31329630) Homepage
    I was lucky enough to get a couple of tickets to the original Live Aid gig in Wembley and the word went out that there were tickets still for sale at the box office and to not buy from the scalpers. After an hour or so the scalpers realised they were never going to sell any tickets, even at reduced prices (because everyone was so intent on helping the 'cause' and the scalpers had already bought their tickets!) that they gave up and handed in all the tickets to the box office where they were re-sold by the event to raise yet-more cash!

    But isn't it similar to the success spammers have with spamming? If no one answered the spam emails they'd go out of business, and it's the same with the scalpers ... if you simply don't buy off them they will also go out of business!

    That said, I don't see what's wrong with it and how you can make general scalping illegal and yet still permit Joe Schmo to sell a couple of spare gig tickets if some of his mates can't make it on the day?

  • by amicusNYCL ( 1538833 ) on Tuesday March 02, 2010 @01:11PM (#31331692)

    IANAL, but I think parent is right in saying that these guys have actually not done anything illegal

    Did you even consider reading the indictment? It's linked to from TFA. Or are you just going to assume you know all the facts, and make your judgement? Maybe the government lawyers were just winging it when they wrote up a 43-count federal indictment, right? Here's a hint: one of the things they did was break into other people's networks to steal source code. Maybe that's not illegal in your world, but it is in the one where they got charged.

    BTW, writing "IANAL" is not an excuse for ignorance. I've never studied law either, I just clicked on the indictment because I was wondering exactly what they did that was illegal.

IN MY OPINION anyone interested in improving himself should not rule out becoming pure energy. -- Jack Handley, The New Mexican, 1988.