Ticketmaster Accused Of Running Underground Scalping System

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NEW YORK (CBSMiami) - Ticketmaster is now accused of running what looks like an underground ticket scalping project that may be driving up prices and costing consumers millions.

An investigation by the Canadian Broadcasting Corporation and the Toronto Star claims the box office giant is helping scalpers buy tickets and resell them with a secret program.

Wearing hidden cameras, journalists from the Toronto Star and CBC posed as scalpers at a major live entertainment conference in Las Vegas in July. That's where they found Ticketmaster representatives appearing to pitch a company-owned resale platform used by ticket scalpers.

Ticketmaster Representative: "I've brought in people that are extremely small, that have had just a few sets of tickets and just had the gumption to try and they've become pretty good partners for me, doing half a million, or whatever."

Undercover CBC Reporter: "Half a million dollars or half a million tickets?"

Ticketmaster Representative: "In sales. In total sales."

"They have a secret scalper program that they don't talk about in any corporate reports," said Dave Seglins.

Seglins, an investigative reporter with the CBC, is one of the reporters who went undercover posing as a ticket broker from Toronto.

"What we discovered is they are selling something called "TradeDesk," which is an online system," said Seglins. "It's purposely designed for professional scalpers. It helps manage large inventories."

Here's how it works. Scalpers set up fake accounts to buy tickets in bulk on Ticketmaster.com. Since the website limits how many tickets one person can buy, the scalpers then sell those tickets at inflated prices on "TradeDesk."

Undercover CBC Reporter: "I want to know the straight goods on whether Ticketmaster is going to be policing us using our multiple accounts?"

Ticketmaster Representative: "Uuhh, no. I have a gentleman who's got over 200 Ticketmaster.com accounts."

Ticketmaster can then make money off fees from the initial ticket sale and the re-sold scalped ticket.

For example, CBC analyzed ticket sales for a Bruno Mars concert and calculated that Ticketmaster could make up to $658-thousand in fees – half of that coming from scalped tickets.

"I'm hoping from an investigation like this, we're really bringing transparency. So that people could look at this and ask whether this is right, moral, ethical, legal," said Seglin.

In a statement to the Toronto Star and CBC, Ticketmaster said in part that it offers "a safe and fair place for fans to shop, buy, and sell tickets" and that it operates that "marketplace more transparently and securely than any other."

While there is no federal law against ticket scalping, Ticketmaster has publicly opposed the practice in the past.