Council Gives Final Approval to RESALE Act, Regulating Ticket Sales and Capping Ticket Resale Prices

In the second of two necessary votes at the Council's most recent Legislative Meeting, the Council passed the Restricting Egregious Scalping Against Live Entertainment (RESALE) Act. As the bill's moniker indicates, the legislation primarily intends to address what are seen as excesses in the secondary ticket market.

To properly address the lexicon, when a venue directly sells an event ticket to a consumer (even if they use a subcontractor/vendor site to transact the sale), this is considered the primary market for ticket sales. When a middleman operation purchases tickets, individually or in bulk, from a venue, then resells these same tickets to consumers at a markup, this is known as the secondary market. (It is important to note that the tickets affected by the RESALE Act are exclusively tickets for live entertainment, such as music and theater. Tickets to sporting events and movies are not affected by the bill.)

The keystone of the RESALE Act, as passed unanimously at the most recent Legislative Meeting, is a firm price cap on secondary ticket sales. The price cap is ten percent above the ticket price, with a maximum fee allowance of ten percent, meaning that the most a consumer can pay for a ticket, with fees, is 120 percent of its face value. Interestingly, the bill makes no distinction between tickets sold by for-profit corporations or private citizens-if a ticket is resold by one purchaser to a second purchaser, the price cap will be in effect.

Realizing that private industry and its legal counsel can often react more adroitly and speedily to legislation than the legislature itself can react and make its own iterative legislative changes, the bill as amended during the Legislative Meeting allows the mayor to modify the secondary market price cap one year following its implementation. These potential future modifications could result in price caps zero to twenty percent above the ticket's face value, and fee caps five to twenty percent above the ticket's face value.

As passed two weeks ago in the bill's first of two necessary approvals, the bill allowed the mayor to regulate fees in the primary ticket market, though only platform-and not venue-fees could be so regulated, with the Council maintaining a 45-day passive review period for any such regulations. However, at the most recent Legislative Meeting, this potential for regulating primary market fees was stricken from the bill via amendment.

Other provisions of the bill as approved seek to address key ticket purchaser pet peeves. The bill bans the practice of "speculative pricing," whereby tickets that a reseller anticipates possessing in the future, but does not yet own in the present moment, are sold in advance to unsuspecting customers. Additionally, the bill requires that ticket prices be cited "all in," meaning that published prices should include all fees and other add-ons, so that no one is surprised between when they commit to buy a ticket and when they formally conclude the sale.

The bill also bans the emerging practice of "surveillance pricing," whereby an individual consumer's physical location, browsing history, or other identifiable online profile data is used against them to augment pricing. However, at the most recent Legislative Meeting, the ban on surveillance pricing was clarified via amendment to state that consumer-friendly demographics-based pricing, such as discounts for seniors or veterans, remain legal under the new surveillance pricing ban.

From a regulatory and enforcement standpoint, the bill requires that any individual or corporation that resells more than fifty tickets a year must register and be licensed with the District's Department of Licensing and Consumer Protection (DLCP). Registered resellers will have to maintain a $25,000 surety bond with DLCP, to ensure the reseller meets their obligations to consumers, and that consumers are protected in the case the reseller does not do so.

Critically, in its recent budget deliberations, the Council provided, even in advance of the RESALE Act's passage, the funds to implement it. (Often, Council bills passed in the course of an ongoing budget year are approved "subject to appropriations," meaning that while they are officially the law of the land, they cannot be implemented or enforced until funds are identified and set aside to do so.) In the case of the RESALE Act, in anticipation of its eventual passage, full funding was set aside in advance, which will allow the bill's measures to go into effect as intended, on January 1, 2027.

The most recent Legislative Meeting represented the Council's final meeting prior to commencing its two-month summer work period. As such, a large number of nominations, contract approvals, and revenue bonds approvals were on the agenda, since no similar legislation can come before the Council until the next Legislative Meeting on September 22.

One of the other measures approved at the most recent meeting outlined the Council's recess rules. Those rules outline the traditional summer prohibition on the holding of hearings or roundtables, but make an exception for up to three roundtables on the topics of elections or campaign finance (given the potentially busy season for elections that this fall and next year could have in store).