Federal Judge: Anti-Scalping Law Unconstitutional

Not everyone who shelled out $300+ for a ticket to the Super Bowl in Detroit is thrilled to be seeing the Seahawks and the Steelers. But those with unwanted tickets can breathe (a little) easier after a court ruling last week. A federal judge held that a Detroit City Ordinance that prohibited the sale of sports or entertainment tickets at any price in public places (basically, an anti-scalping law) violated the First Amendment's protection of commercial speech. (Ashenfelter, "Taking a loss? You can sell that extra ticket," Det. Free Press, 01/20/06; Shepardson, "Federal judge axes Detroit's ban on scalping," Det. News, 01/19/06).

The court ruled -- under the Central Hudson test -- that the ordinance restricted lawful activity (the sale of a good at or below face value) and that the asserted government interests (regulating traffic and congestion; ensuring security of patrons) were not substantial and not furthered by the law. The court distinguished the sale of tickets at or below face value from re-sale above face value, which is illegal under Michigan law. So, you can get your money back, but if you want a profit, better to try eBay. You can read the court's opinion here.

For one take on scalping laws, see "The Follies of Anti-Scalping Laws" by Happel and Jennings. For an economic perspective, see "Another Look at Anti-Scalping Laws: Theory and Evidence" by Depken.

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