First published in World Sports Law Report, vol. 7, issue 2 (February 2009)
In September 2008, the Serious Fraud Office launched an investigation into ticket agencies suspected of online ticket fraud for failing to supply tickets to consumers for the Beijing Olympics, amongst other events, last summer. Laura Acreman of Bird & Bird LLP reviews the criminal legislation now being used by UK authorities to pursue those touting tickets to sporting events. Crucially, that legislation (the Fraud Act 2006 and the Proceeds of Crime Act 2002) may benefit sports other than football, the traditional focus of anti-ticket touting measures.
Following its September 2008 investigations, the SFO and the Metropolitan Police Service arrested five people connected to Xclusive Tickets Limited, an online ticket agent, and its related companies (“Xclusive”). According to the SFO press release, Xclusive purported to sell tickets to the 2008 Olympic Games in Beijing but tickets were not received by those that had paid for them. This apparently unprecedented action by the SFO has sparked interest among sports governing bodies, many of which have tried for many years to combat ticket touting, often with relatively little support from the authorities.
Anti-ticket touting measures taken by the police have traditionally focused on individuals selling, or offering for sale, tickets outside football grounds. But the internet has changed the modus operandi of touts. Increasingly, without being authorised by the event organiser, companies like Xclusive are being set up to sell tickets to sporting events online. By their nature these companies have a much wider customer base than any stadium-based tout; but they pose the same issues for event organisers. If such companies are not authorised to sell tickets to events, the event organisers cannot regulate the sale of tickets, which can compromise both the organiser’s commercial interests and any practices put in place to safeguard spectators. Unauthorised ticket sales can also result in fans being ripped off when tickets never materialise, as demonstrated by the allegations against Xclusive. Now the criminal justice authorities are beginning to catch up with the new breed of touts.
The Xclusive arrests are not the first time that the Metropolitan Police Service has been involved in stopping ticket touting activities. Following initiatives between The FA, the Premier League and the UK Football Policing Unit, use has been made of criminal legislation to crack down on those illegally selling tickets to football matches. Although some may view resorting to such legislation as an extreme reaction to unauthorised ticket sales, public safety at football matches requires that fans of opposing teams are kept apart, and that those banned from football matches cannot attend. If tickets are purchased from touts, the measures put in place to ensure public safety are threatened and the safety of those attending the match cannot then be adequately protected.
In years past, the application of criminal law against touts was limited, confined to football and reliant on the CJPOA. Now there are a greater number of resources that can be used against touts. We take a look at the Fraud Act 2006 and POCA 2002, on which the SFO based its investigations into Xclusive, and briefly London’s legislative answer to avoiding the ticket touting problems suffered at the Beijing Olympics.
London Olympic Games and Paralympic Games Act 2006 (“LOPGA”)
Like football, the London Olympics and the Glasgow Commonwealth Games will also benefit from specific legislation criminalising ticket touting. While the focus here is on LOPGA, it should be borne in mind that the CJPOA and GCGA contain very similar anti-ticket touting provisions.
An offence under s.31 LOPGA is committed each time a tout (amongst other things):
- is not authorised in writing by the London Organising Committee for the Olympic Games (“LOCOG”) to sell tickets to an event at the London Olympics;
- offers for sale and/or sells a ticket to that event; and
- undertakes (2.) in the course of business or in a public place.
Under s.31 (6), a tout, if found guilty, is liable to a fine not exceeding the maximum for level 5 (£5,000) on summary conviction only.
LOCOG has also announced a crackdown on ticket touting activities through LOCOG’s ticketing policy, due for publication in 2010, prior to any ticket sales. The policy is expected to incorporate physical restrictions on the transfer of tickets, to work in tandem with the criminal sanctions outlined here.
From the description of the offences, it is clear that the provisions of the CJPOA/LOPGA/GCGA only apply to tickets to football matches/London Olympic and Commonwealth events, thereby leaving a vast number of sporting events untouched. Since the Olympics and Commonwealth Games are not subject to the same public safety concerns as football matches, the presence of dedicated anti-ticket touting legislation for these events indicates an awareness of the broader concerns surrounding touting, namely the commercial gains made by touts at the expense of real fans and the commercial interests of event organisers. This being the case, there is a strong argument for introducing similar dedicated legislation for all sporting events.
In the meantime, all other sport event organisers have had to rely on civil remedies when enforcing their ticket terms and conditions to prevent ticket touting. Recently, the Metropolitan Police Service has begun to bring charges against ticket touts under the Fraud Act 2006 and the Proceeds of Crime Act 2002, indicating that some anti-ticket touting measures could be universally applied within the sporting community.
Fraud Act 2006 (“Fraud Act”)
The Fraud Act, which came into force on 15 January 2007, repealed the deception offences under the Theft Act 1968. In its place, the Fraud Act introduced a number of dishonesty offences. Of the offences contained within the Fraud Act, fraud by false representation under s.2 of the Fraud Act is the most clearly applicable to ticket touting. A tout will be guilty of fraud by false representation if the tout dishonestly makes a representation that he is authorised/legally able to sell the tickets, knowing that the representation is or might be false, with a view to making a financial gain and/or exposing the buyer to the risk of a loss.
Under the Fraud Act regime, it is immaterial whether anyone actually purchases tickets from the tout or whether any gain or loss is made. The tout will be guilty of a s.2 offence as soon as the criteria above are satisfied. Under s.1 (3) of the Fraud Act, if a tout is found guilty of fraud by false representation, he is liable to 12 months imprisonment and/or a fine on summary conviction. If the matter proceeds to trial, the sentence could be increased to a maximum of 10 years and/or a fine. These sanctions are much stiffer than those under the CJPOA/LOPGA/GCGA, making the threat of conviction under the Fraud Act much more of a deterrent to touting.
The SFO is able to investigate Xclusive for alleged Fraud Act offences because ss.2 (4) and (5) of the Fraud Act bring within the remit of the offence representations made via the internet. The Fraud Act can therefore be used against both individual touts making face to face ticket sales, and ticket agencies selling tickets online.
However, the Fraud Act is not intended to exclusively deal with ticket touting. As a result, ticket touting does not fit as comfortably within the framework of the Fraud Act as it does under the provisions of the CJPOA/LOPGA/GCGA. The evidential requirements of the Fraud Act increase the burden of proof on those seeking to convict ticket touts. For example, under s.2 of the Fraud Act, there is no fraud by false representation unless/until it is shown that the tout was dishonest in their actions. The explanatory note to the Fraud Act sets out what is required to successfully prove dishonesty. Essentially, the usual two-stage test for dishonesty will apply, which requires not only an objective determination of what is dishonest but also proof that the tout was aware that his conduct would be thought of as such. By comparison, the wording of s.166 CJPOA/s.31 LOPGA do not require proof of any knowledge on the part of the tout. As a result, it may be easier to secure a conviction under the CJPOA/LOPGA/GCGA than the Fraud Act (or POCA, see below).
Further, s.2 (2) requires proof that the tout knew that the statements he made about the tickets were “untrue or misleading”. However, this element may not be as problematic as it appears since the key ticket terms and conditions are usually written on the physical ticket itself (regardless of whether or not the terms and conditions have been incorporated into the transaction in which the tout acquired the ticket). If these terms include reference to unauthorised ticket sales rendering the ticket invalid then, arguably, the tout can be said to have known that any representation that the ticket is valid (whether express or implied) was untrue or misleading.
Proceeds of Crime Act 2002 (“POCA”)
Money laundering offences under POCA are applicable to any crime. Therefore, if the tout is liable under the Fraud Act or the CJPOA/LOPGA/GCGA then they may also be charged with money laundering offences under POCA. Of the money laundering offences listed in POCA, “acquisition, use and possession of criminal property” is the most obviously applicable to ticket touting. A tout will commit a s.329 offence if he:
- in any way deals with the profits from the illegal sale of tickets; and
- knows or suspects that the profits were gained through criminal conduct.
‘Criminal property’ in the context of ticket touting will be the money gained by the tout from selling the ticket(s). The tout may also contravene s.328 of POCA if he is involved in an organised form of ticket touting, such as a company specifically set up to sell tickets to sporting events. Under s.334 POCA, if a tout is found guilty of money laundering, he is liable to up to 14 years’ imprisonment and/or an unlimited fine on indictment; or up to 6 months’ imprisonment and/or a fine to the statutory maximum of £5,000 on summary conviction.
While an offence under POCA requires a criminal act to have been committed, one incidence of ticket touting may give rise to separate offences under the Fraud Act, the CJPOA/LOPGA/GCGA and POCA. However, the CPS suggests that where the proceeds gained by ticket touting are minimal and have only been enjoyed by the tout, rather than (for example) used to fund further criminal activity, an application under POCA for confiscation of the actual proceeds gained may be preferable to the additional evidential burden of prosecuting the tout under POCA. This suggestion would appear to cover individual touts who do not generate a significant income from touting, but, for wider networks of touts, particularly where the criminality extends beyond ‘mere’ ticket touting, a confiscation order alone may be inappropriate. Additionally, under POCA a confiscation order can only be obtained when the ticket tout is tried at a Crown court. A confiscation order will not be available for s.166 CJPOA/s.31 LOPGA/s.17 GCGA offences where conviction is summary only.
Other than football, the Olympics and Commonwealth Games, sporting events are not the subject of dedicated anti-ticket touting legislation. But a greater interest in curbing touts’ activities, coupled with a willingness to use general legislation, has meant the fight against touts is intensifying. Due to the evidential burden of proof and the need for a conviction on indictment in order to use the full force of the Fraud Act and POCA, touting activity may need to be sufficiently serious for prosecutors to be willing to invest in prosecuting it. Despite these drawbacks, the investigations into Xclusive indicate that a tougher stance is being taken against ticket touts across all sports. For organisers of all sporting events, this should be a welcome development. Cracking down on touting in sports generally means not only can the organiser better control attendance at its event but also that real fans should not be disappointed by ticket touts.
 Five arrested in Olympics online ticket fraud investigation, The Guardian (http://www.guardian.co.uk/sport/2008/nov/26/ticket-fraud-beijing-olympics)
 as well as tickets to other events, including the Reading and Leeds music festivals, via a series of websites. It is suggested that Xclusive were involved in around 15,000 ticket sales, amounting to £25,000,000 in revenue.
 Illegal touts raking in record-breaking £1,000 a ticket for Wembley cup final, Mail Online (http://www.dailymail.co.uk/news/article-514115)
 These sites may take the form of fan to fan ticket exchanges, but there remain suspicions that some such sites are merely fronts for traditional touting activity.
 Arrest in ticket touting enquiry, BBC News (http://news.bbc.co.uk/1/hi/england/7278646.stm)
 For example, Online ticket boss Koukoullis in court, Hertfordshire Mercury, 29 October 2008 (http://www.hertfordshiremercury.co.uk/hertfordshiremercury-news/displayarticle.asp?id=362245)
 For example, because those individuals are subject to a banning order: Match ban for football chanting, BBC News (http://news.bbc.co.uk/1/hi/england/manchester/7779427.stm)
 s.166 of the CJPOA (as amended by the Violent Crime Reduction Act 2006) makes it a criminal offence for a person to “sell or offer or expose for sale a ticket to a designated football match” unless they are authorised by the event organiser. The definition of a ‘designated football match’ under s.2 Ticket Touting (Designation of Football Matches) Order 2007 effectively covers all professional football matches played in England and Wales.
 s.17 Glasgow Commonwealth Games Act 2008 (“GCGA”)
 Such as those used in other events. For example, photo identification required for access to Glastonbury music festival (http://www.metro.co.uk/fame/article.html?in_article_id=32620&in_page_id=7)
 A move unpopular in the wider sporting community (http://www.guardian.co.uk/sport/2007/apr/03/Olympics2012.politics)
 Typically, ticket terms and conditions will (i) restrict the use of tickets to the original purchaser and their intended guests; (ii) prohibit the re-sale and/or unauthorised commercial use of the tickets; (iii) retain the title to the ticket with the event organiser; and (iv) render the ticket void where is it transferred in breach of any of the ticket terms. Ticket touts will be in breach of at least one of these terms, which render the ticket(s) incapable of transfer to a third party.
Any use of tickets obtained in breach of the terms and conditions will invalidate those tickets and give the event organiser one or more of the following civil causes of action against the ticket touts directly: (i) breach of contract; (ii) inducement to breach of contract; (iii) economic torts; (iv) trespass; (v) passing off; and (vi) breach of statutory duty.
Each time a tout purports to transfer a ticket to a buyer, they may be committing each of these torts, which can be the subject of injunctive relief, as well as damages or an account of the tout’s profits.
 Man charged over football tickets, BBC News (http://news.bbc.co.uk/1/hi/england/lancashire/7624320.stm)
 Home Office Circular, 042/2006
 The Fraud Act 2006, CPS Legal Guidance
 Para. 14, Explanatory Notes to Fraud Act 2006
 Para. 10, Explanatory Notes to Fraud Act 2006
 R v. Ghosh  Q.B. 1053
 s.2(4) Fraud Act 2006
 as amended by the Serious Organised Crime and Police Act 2005
 Para. 1233, Butterworths Money Laundering Law
 Money Laundering Offences – Part 7 Proceeds of Crime Act 2002, CPS Legal Guidance 6 February 2008
 See also http://www.guardian.co.uk/sport/feedarticle/8135511