The Price Of Admission

How Ontario’s Resale Price Cap Could Put Season Ticket Holders in the Penalty Box

With contributions from Sarah Vanderheyden

For years, you’ve had the same seats at your team’s home games. When you can’t go, you sell your tickets to a friend or on a resale site, sometimes for a profit. You’ve heard that Ontario has changed the rules on reselling tickets, and you’re left wondering: “Does this affect season ticket holders like me?” Unfortunately, it does, and while some of the rules are still unclear, the penalties are real.

In Ontario, you can no longer sell a ticket to a recreational, sporting or cultural event for more than you paid for it. Amendments earlier this year to the Ticket Sales Act, 2017 (the “Act”) cap the resale price at the total price paid to the primary seller (such as the venue, promoter or box office), plus any applicable fees, service charges and taxes charged by the secondary seller or the secondary ticketing platform. The Act does not define “fees” or “service charges”. If you sell through a resale platform that already charges a fee or service charge, you cannot charge one yourself unless regulations under the Act permit it, and none have been made yet.

A further difficulty is that season ticket holders may not know what any individual ticket is worth. Season seats are bought as a package, often at a discount, and the price may not be broken down game by game. A holder who wants to sell a ticket for a single game may have no reliable way to work out what the ticket’s face value is.

While the province’s target may have been secondary platforms and professional scalpers, as written the law reaches any secondary seller, including season ticket holders, and the penalties are steep. A contravention can attract (a) an administrative penalty of up to $25,000, or (b) a court-ordered fine of up to $50,000 for an individual or $250,000 for a corporation, imprisonment of up to two years less a day, or both. So far, the province has gone after resale platforms, not individual fans, but nothing in the Act limits enforcement to platforms.

There are two exemptions. The Act does not apply to events held at schools, post-secondary institutions, places of worship or buildings owned or operated by a municipality, school board or community organization. This exemption does not apply if the venue is rented out for the event to anyone other than one of those bodies. The Act also does not apply to events whose primary purpose is showing a film. Neither exemption will help a season ticket holder at a professional team’s arena or stadium.

The province faces a real dilemma. An unregulated market allows professional resellers to purchase scarce tickets and inflate prices. However, overregulation pushes resale to the black market, where consumers have fewer protections and transactions are harder to monitor and tax. A third risk is that if compliance becomes too onerous, season ticket holders will simply stop listing the games they cannot attend and everybody loses: the holder is out of pocket, seats sit empty, fans miss out and the venue loses revenue.

The legislature may have tipped the scales too far, leaving anyone who cannot make a game unsure what they can lawfully charge for the ticket. One practical solution is for the province to require venues to publish the face value of each ticket sold in a package, so that resellers and buyers alike know what that figure is. Another is for the province to allow a reseller to charge a reasonable markup on a ticket’s face value. That would compensate the reseller for the effort and cost of reselling while still preventing runaway prices.

Until the government clarifies the Act and finalizes the regulations, we recommend that you keep records of what you actually paid for your tickets, including fees and taxes. You should also consider how your tickets are held, since an account held through a corporation invites the argument that you are running a ticket business, and this can attract more scrutiny and materially higher fines.