STANDING COMMITTEE ON LEGISLATION

TICKET SCALPING BILL 2018

TRANSCRIPT OF EVIDENCE TAKEN AT PERTH WEDNESDAY, 14 AUGUST 2019

SESSION ONE

Members

Hon Dr Sally Talbot (Chair) Hon Nick Goiran (Deputy Chair) Hon Colin de Grussa Hon Aaron Stonehouse Hon Pierre Yang ______Legislation Wednesday, 14 August 2019 — Session One Page 1

Hearing commenced at 9.39 am

MR JOSHUA GLADWIN President, Ticket Brokers Association of Australia Incorporated, sworn and examined:

MR DAVID LUONG Director, Epic Tickets, sworn and examined:

The CHAIR: On behalf of the committee, I would like to formally welcome you to the hearing. [Witnesses took the affirmation.] The CHAIR: You will have both signed a document entitled “Information for Witnesses.” Have you read and understood that document? The WITNESSES: We have. The CHAIR: I just draw your attention to the fact that we have Hansard with us today. They will be recording the proceedings. A transcript of your evidence will be provided to you. To assist the committee and Hansard, would you please quote the full title of any document you refer to during the course of this hearing for the record. Please be aware of the microphones. Try to talk into them and make sure you do not cover them with papers or make noises near them. I am sure you will be very orderly, but if you could try to speak in turn. I remind you that your transcript will be made public. If for some reason you wish to make a confidential statement during today’s proceedings, you should request that the evidence be taken in private session. If the committee grants your request, any public and media in attendance will be excluded from the hearing. Until such time as the transcript of your public evidence is finalised, it should not be made public. I advise you that publication or disclosure of the uncorrected transcript of evidence may constitute a contempt of Parliament and may mean that the material published or disclosed is not subject to parliamentary privilege. Would you like to start by making an opening statement to the committee? Mr GLADWIN: I would. I would first like to start by expressing our gratitude to the committee and to the committee clerk for allowing us to appear this morning. The TBA comprises seven Australian– based ticket brokers and resellers. We cater to WA and Perth–based families and small businesses; we cater to hotels, hotel concierges; and we cater to the slightly larger entities, being the ASX listed mining and energy companies. Our members provide superior value through the packaging of event tickets with ancillary benefits, such as food and beverage, accommodation and transport, in addition to providing the option to purchase single-ticket-only options. We strictly abide by our code of ethics, which is based on that of the National Association of Ticket Brokers in the USA. It mandates transparency in the secondary market; it mandates compliance with the Australian consumer law, especially those provisions pertaining to drip pricing; and, vitally, it prohibits any use of automated software or bots. You will no doubt have read TBA’s submission, which largely canvasses the notion of consumer benefit, competition and transparency—are our main focuses. You will note also that we have provided differing legislative approaches. The paramount approach, in our opinion, is that of the UK Consumer Rights Act 2015 and Ontario’s Ticket Sales Act 2017, which are largely transparency and disclosure obligation based. Failing that, our second preference is that of major events legislation, which was largely endorsed by the submission by Live Performance Australia, which is

Legislation Wednesday, 14 August 2019 — Session One Page 2 the key body representing artists and performers. The third preference is retaining the existing legislation, but with an amendment to remove the contingent sales prohibition, which would otherwise enable our members to continue to service their clients. The submission also discusses the dynamics between the primary and secondary markets, and notes what will occur if there is a price cap placed on the secondary market; namely, that the primary market would step into our place. Finally, the submission canvasses some non-legislative options. Most notable is the involvement of Google in ensuring that Viagogo’s paid search advertising no longer occurs, which appears to have been pretty successful. I want to go on to the objectives of the bill. We applaud the intention of then minister for commerce Bill Johnston, when in his second reading speech he spoke of the unashamed commitment of the bill to put fans first and to promote openness, transparency and reasonable access to the market, and ensuring that WA families have the opportunity to enjoy major events at a fair price. We wholeheartedly agree with and support each of these objectives. However, we are concerned that the bill does not meet these objectives. Unfortunately, the focus of the current legislation is confined to the secondary market and resellers—it does not place any accountability on the part of the primary market to adopt the same objectives around transparency and access to tickets. Secondly, there are significant and important concerns regarding primary market transparency, which have been raised in our submission and echoed by the Law Society of WA in their respective submission. Another concern is that by removing genuine resellers like ourselves, competition in the market will be dramatically reduced, causing prices to increase. It affects fair access to tickets and ticket affordability for fans. Finally, it will be incredibly difficult to enforce on companies and individuals based overseas who are selling tickets into Australia. I want to very briefly discuss how it does not protect consumers. Rather than protect them, the bill does three things: it punishes the 68 per cent of consumers who, according to the submission by Consumer Protection, thought they were purchasing tickets from an official ticket seller and not a resale site. It punishes them by extinguishing these customers’ contractual rights and remedies under the Australian Consumer Law due to the deemed illegality of any tickets sold for greater than 10 per cent above face value. The cap will effectively end David’s business. It will drive his and many other customers to a black market for tickets beyond the jurisdiction of Consumer Protection. The bill was drafted without wider stakeholder consultation. We were disappointed we were unable to meet personally with Minister Quigley, and the discussion that we did have with Consumer Protection occurred once the bill had been drafted. We very much look forward to working with Parliament and with the department in order to improve the legislation, to achieve greater outcomes for consumers. Thank you. The CHAIR: Thanks. I am sure you are aware that last week we had a public hearing with the department. Mr GLADWIN: We watched it with interest. The CHAIR: Yes. Did you have some particular comments that you wanted to make about some of the evidence that you heard? Mr GLADWIN: We were proposing to table or to draft a rebuttal document, and submit that to the committee clerk. The CHAIR: Right. Is that what you are intending to do? Mr GLADWIN: Correct. The CHAIR: You need to be aware that we are on a very tight timeline.

Legislation Wednesday, 14 August 2019 — Session One Page 3

Mr GLADWIN: So that will be done by tomorrow. The CHAIR: All right. Thank you for that opening statement; that is very good. Can you just explain the relationship between your two organisations? Mr GLADWIN: Sure. David comprises our sole Perth member. The rest of us are Melbourne-based. David has his own client base. I am more than happy for David to provide an introduction to his business. The CHAIR: Yes. That would probably be helpful, because my first question is: is it a membership organisation? Mr GLADWIN: It is indeed, yes. The CHAIR: So are your members subject to a business licensing regime? Mr GLADWIN: Yes. To the extent that we are based in Australia, we have to comply with the relevant business licensing regime. It is a commonwealth regime, so you have to have a business name, ABN. So, yes, in response to your question. The CHAIR: David, perhaps you’d like to — Mr LUONG: Yes. So, we are a small Western Australian family-owned business. We provide concierge-like services to individuals, as well as businesses, as well as visitors to WA. My relationship with the TBA is that the TBA provides us a code of ethics and representation. I can stick by those guidelines. My customers who buy from me have the confidence that I will adhere to them. That provides confidence when my customers purchase from me. My customers range from people that, you know, they are computer-illiterate or they are not as tech-savvy as the general population. They like to use the phone; they like to visit us in person. They are not so comfortable using a mobile device or a computer. Eleven per cent of people do not have a smartphone, so that shows potentially there are 300 000 people in WA that could be disenfranchised, so they will not have access to my services. We also cater to a lot of regional customers, whether they be FIFO or farmers or people who just live in the regions that do not know when they are coming to Perth, they do not have good internet access to be able to buy tickets at 9.00 am or whenever they go on sale, and people that just have unclear schedules. We also help a lot of small and large businesses in Australia with their business development in entertaining clients, whether they are entertaining current clients or future clients. [9.50 am] The CHAIR: You are the only TBA-affiliated or member organisation in Western Australia? Mr LUONG: Yes, that is correct. The CHAIR: Are there other businesses similar to yours that are not members of the TBA? Mr GLADWIN: There would be other brokers that do not meet our strict code of ethics, or we cannot verify to a satisfactory extent that they satisfy it; therefore, they have not been accepted for membership. So it is fairly concentrated. There are seven of us; we are a small association. One thing I might add to what David was mentioning earlier in terms of the environment in Perth, a lot of the Ticketmaster and Ticketek agencies have closed down. Mr LUONG: Yes. I think, in 2013, there would have been 14 Ticketmaster agencies—Ticketmaster being the agency that services our $2 billion Optus Stadium. Now it is down to one. The CHAIR: When you say “agency”, you mean a place where tickets are sold? Mr LUONG: A place where people can talk to someone, a place where —

Legislation Wednesday, 14 August 2019 — Session One Page 4

The CHAIR: A land-based office? Mr LUONG: Yes. A place where someone goes there and talks to someone. The only one that is still open is the one in Crown Perth, and that is open only Monday to Friday, nine to five. We cater outside those hours as well. Mr GLADWIN: It indicates a heavy reliance on Ticketek and Ticketmaster, strongly encouraging people to move online. Where it becomes problematic is where you have a look at a website such as productreview.com.au. You type in “Ticketek” and you will see they have over 900, one-star reviews ranging from people who had access issues to the website, people whose credit card was blocked, people trying to get through to someone on the phone but they get a recording. It is a business decision of Ticketek and Ticketmaster to minimise the personal contact and to try to encourage people to use online, but there are clear service gaps, and that is where we try to fill the market—people who are dissatisfied with the primary and cannot otherwise obtain tickets. The CHAIR: Are you saying that one of those organisations has only got one outlet; has the other got more? Mr LUONG: That was Ticketmaster. Ticketek do have more, but they have pretty much closed all their suburban outlets and only have CBD outlets. I think there are two in the outer suburbs. Hon COLIN de GRUSSA: Following on this theme of accessibility from the primary reseller point of view, and, obviously, from the consumer’s point of view, you are saying here that accessibility is increasingly more difficult—closing down those physical venues. Then you have the internet-based systems that they are replacing them with. Do you feel that primary resellers are genuinely making it easier—easy for people to buy tickets—or is there a strategy behind it? Mr LUONG: There is definitely a strategy to shift as much online as possible. Both Ticketek and Ticketmaster are large, overseas, profit-making machines—Ticketek being a private equity-owned business and Ticketmaster being a Live Nation, American-owned business. Hon COLIN de GRUSSA: Does that move to a more online platform make it more accessible or less accessible for people to purchase tickets? Mr LUONG: The online platform has always been there, so by removing physical locations, you are only reducing accessibility. MR GLADWIN: Less accessible for the elderly. There were a couple of reviews on that website I mentioned by a disabled lady who just could not navigate the website, so it is age-dependent. I think younger people would have no issue utilising online services, so access for them via the primary market to the extent that tickets are available would be easier, but much more challenging for the — The CHAIR: You presumably have online platforms as well, do you? Mr GLADWIN: We do. I have an online store. David has an online store. Mr LUONG: But we give the option for people to come and visit us and talk to us. Mr GLADWIN: Our contact number. The CHAIR: How many outlets do you have on the ground, because you operate through the concierges? Mr LUONG: I have just one office in Leederville, but we do operate through remote concierges as well. The CHAIR: I want to move to another area. I think you have covered the association’s views of the bill, but I wanted to ask you in relation to other jurisdictions. Can you share with us your

Legislation Wednesday, 14 August 2019 — Session One Page 5 understanding of some of the experiences of your members in other jurisdictions with similar kinds of provisions; so, in other words, the cap provisions? Mr GLADWIN: To the extent that New South Wales, South Australia, Queensland, on certain events, have imposed a 10 per cent price cap. Our members are fully compliant with those jurisdictions. In terms of observing how each jurisdiction enforces their provisions, we are reminded by Live Performance Australia’s submission, which prefers the Victorian major events model, to the extent that it is selective in nature. It enables more concentrated enforcement outcomes by the relevant enforcement division, including police. Where New South Wales, for example, is lacking is that not only have there been no prosecutions under the new legislation, which has been in effect since 1 June of last year, one of our members provided a complaint to the New South Wales Fair Trading Authority because we observed a huge number of infringing listings on Viagogo. We received a response that basically said, “We steer you away. We steer you away from Viagogo. Here is the law.” In terms of any enforcement outcomes, to the extent that they are investigating, that message was not conveyed to us and, we suspect, based on the submission of consumer protection, to the extent that they have the power to issue consumer warnings, it will be much the same. There will not be targeted enforcement action against entities like Viagogo. That is also reflected by the contribution, or lack thereof, of any notable full-time employee presence in consumer protection to police it. The CHAIR: In your submission you talk about the twofold legislative approach. You cite the UK act that you referred to in your opening statement. What is the merit of those measures compared with what we are contemplating here? Mr GLADWIN: It allows for the openness of the market, so it would not outlaw the resale of the ticket per se, but what it would do is that it would equip buyers with precise information pertaining to the identity of the secondary reseller, the row, whether or not there is any viewing impediment associated with it. It is those transparency obligations that are then binding on resellers such as Viagogo. That can be seen through contempt proceedings that have been mounted recently against Viagogo by the Competition and Markets Authority to ensure compliance with those. So, for example, Viagogo had not been displaying the face value of tickets. Viagogo did not specify, or not a lot of the listings were specific enough to indicate where the seat was located, so the Competition Markets Authority is taking them to task, as I said, in contempt of court proceedings. That, I think, enabled or equipped the Competition Markets Authority and the relevant MPs in the UK to lobby hard against Google and say, “Look, we’ve got proceedings here afoot. We’ve got a previous court order that isn’t being abided by”, and that obviously influenced Google’s decision. If you couple that with the provisions in the Ticket Sales Act in Ontario, which are to be proclaimed, they impose a corresponding obligation on event organisers to be up-front and clear about what proportion of tickets are being allocated to the general public. That will, I guess, dissuade people from automatically concluding when an event sells out that ticket resellers have acquired the abundance of tickets. It would give them an indication of when tickets are going to be available, to better equip them so that they are not automatically buying from the resale market because an event is perceived to be sold out. [10.00 am] The CHAIR: So that legislation about the disclosure obligations of the primary seller is in Ontario, is it? Mr GLADWIN: Correct. The CHAIR: Not in the UK legislation? Mr GLADWIN: No.

Legislation Wednesday, 14 August 2019 — Session One Page 6

The CHAIR: Is the Ontario legislation working yet, or did you say it is yet to be proclaimed? Mr GLADWIN: That is to be proclaimed. So, to date, they had a limited primary market transparency obligation in that. Even to get that in there, there was heavy lobbying by Ticketmaster in Canada against it. At some point they—when Douglas Ford, who is the now Premier of Ontario, when he came into power, he repealed that and replaced it with far more expansive primary market transparency obligations which are yet to be proclaimed. We expect that will occur in around November. The CHAIR: You will have heard last week the argument against that will be that it is part of the business model to release tickets, you know, to test the market. Mr GLADWIN: Correct, yes. There were other arguments made that it would enable ticket resellers to game the market, that it is otherwise administratively cumbersome, it is commercially insensitive. That is fine, those may be legitimate arguments. The question for the committee is: is the legislation there to protect event organisers, is it there to protect consumers or is it to be a balance? Our experience suggests that any regulation, to the extent that you have it in New South Wales or South Australia, is heavily tipped in favour of event organisers. So there needs to be a balance. The CHAIR: Can we come now to this question about the extinguishing of consumer rights that you referred to in your opening statement? Can you tell us exactly how you view those contractual rights and remedies to be extinguished? Mr GLADWIN: It is our understanding that to the extent that someone purchases a ticket from Viagogo and to the extent that a greater than 10 per cent mark-up applies to that ticket, they are unable to obtain recourse through the courts, simply due to the illegality of it. By analogy, if someone buys drugs from their drug dealer and the drugs were not as described, you cannot fairly litigate that in court. The underlying transaction is illegal and void. The CHAIR: I see. You say that your preference would be, in the primary market, for multiple primary ticket agencies obtaining an allocation of tickets for popular events instead of existing arrangements which favours exclusivity arrangements with one primary ticket agency. Have you had those discussions with the event organisers or promoters? Mr GLADWIN: No. Look, I do not think we are the—we have not, in response to your question. We are happy to explore that. We know VenuesWest was closely collaborating with consumer protection in drafting a bill. We understand VenuesWest has already, I think by way of tender or otherwise, got exclusive arrangements for Perth Arena with Ticketek. We are happy to explore those discussions. The CHAIR: Do you think that there are deficiencies in the Australian Consumer Law in terms of the difficulty in enforcing it? Mr GLADWIN: Well, in terms of enforcing it against Viagogo, I think the ACCC did probably more than what any other international regulator would have done in that capacity. They undertook the— they utilised The Hague convention to serve Viagogo, being Swiss-based, and they were otherwise avoiding service in Australia. Their Australian-based lawyer said, “We don’t have instructions to accept service”, so they were able to do that. No, in response to your question, I do not think there are deficiencies with the Australian Consumer Law. I think there are pretty strong protections, and they were highlighted in Treasury’s decision regulatory impact statement. If parliament is going to bring in legislation to complement that, that addresses the secondary market. We think there would be strong benefit to doing perhaps a more wider review to also include primary market deficiencies there.

Legislation Wednesday, 14 August 2019 — Session One Page 7

The CHAIR: What about uniform legislation across all the jurisdictions in Australia? Do you think that would be a good thing; and, if so, have you ever made that point? Have you ever made representations to COAG? Mr GLADWIN: We note that COAG and the ACCC and Treasury are somewhat, or appear to be somewhat, frustrated in that effort to obtain uniform legislation. We are very much in support of it. We do not think a hodgepodge of legislation across numerous jurisdictions is helpful to understand, especially for tourists who are coming here, in order for them to comply or to ensure that the underlying transaction fits within the relevant state’s jurisdiction. What is frustrating that effort is state jurisdictions going off and bringing in legislation that is different to what Treasury had anticipated, and obviously the ACCC will implement any laws that Treasury consults on. The CHAIR: Let us come to the 10 per cent price cap. You describe it as arbitrary. This is a question for both of you, I guess. Was the association or Epic consulted about the quantum, either in WA specifically or in other jurisdictions? Mr GLADWIN: We were not. We understand that to the extent that state jurisdictions are consistent, that is one aspect that state jurisdictions are consistent on. My understanding is that the 10 per cent price cap derived from the Queensland legislation which was introduced in 2006, and back then, you did not have Viagogo and you did not have other member websites. The only place you could exchange or sell tickets was eBay. EBay charged between seven and 10 per cent on their fees, so more generous back then. The idea was to utilise 10 per cent. We note in Consumer Protection’s submission that in their opinion, 10 per cent, whether it is for tickets being on-sold by a consumer or by a reseller, is reasonable. In our opinion, given you have overseas operators like Viagogo or StubHub, you know, now that Viagogo is not at the top of Google results, we cannot be in any measure competitive if we cannot utilise Google. Google fees alone would eat into anything near 10 per cent. Mr LUONG: Those platforms such as StubHub, Viagogo and Ticketmaster resale, they charge fees of 30 per cent. So for the consumer to be compliant with the law, they would actually need to lose 20 per cent off their face value in order to be within that face value plus 10 per cent, if that makes sense? Hon NICK GOIRAN: I understand that this 10 per cent cap is in place in Queensland. Have you got members in Queensland? Mr GLADWIN: We do not, no. Melbourne and Perth — Hon NICK GOIRAN: Are the only places? Is there a cap in Melbourne? Mr GLADWIN: So the 10 per cent price cap in Victoria applies to only declared events. So we closely collaborated with the department of economics down there. They adopted perhaps a more economic mindset and realised, “Well, we don’t want to completely destroy the secondary market. We want to work in a functional secondary market, but we want to be able to control what events are deemed major events, what events have taxpayer funds, or state taxpayer funds being invested in”, and therefore a priority would be placed on that specific event to not only maximise the investment of the event organiser where there are taxpayer funds involved, but also maximise access by consumers. If we contrast that with the WA bill, I note Minister Quigley mentioned that the great thing about this bill is that event organisers can control—they have the consumers’ best interests in mind and they will ensure that events are—relevant events that need to be declared will be declared, or not declared, but they will have a blanket ban on them.

Legislation Wednesday, 14 August 2019 — Session One Page 8

In our view, we do not think putting event organisers in control of the events is necessarily the best outcome. Well, for us definitely, we have a self-interest in the matter, but not for consumers either because of the primary market deficiencies we identified earlier. Hon NICK GOIRAN: I just want to pursue this a little bit further. You have members operating in Victoria and the Victorian legislation caps the resale for your members at 10 per cent for major events? Mr GLADWIN: Correct. Hon NICK GOIRAN: Do your members resell tickets for major events? [10.10 am] Mr GLADWIN: Yes, in response to your question, the good thing about Victoria is that, unlike clause 7 of the WA bill, or clause 8, which purports — Hon NICK GOIRAN: Clause 8. Mr GLADWIN: Yes, the contingent sales prohibition. Because we do not have an equivalent prohibition in Victoria, we are able to service our existing client base through bespoke packages. A perfect example is the AFL Anzac Day 2019, this year. So event organisers, the AFL and the individual clubs had their own packages. Collingwood, for example, had a $500 package, which included a two or three-course meal and I think it was a level 4 ticket at the MCG. We priced ours a little bit cheaper. A number of our members had functions. They were priced cheaper than the official organisers. We had fantastic feedback from our customers. Hon NICK GOIRAN: So you are effectively telling me that your members in Victoria are not bound by the 10 per cent cap because of the type of products that they are providing. Mr GLADWIN: To the extent that that is not abused, yes. We suspect if our members started getting cheeky and really trying to flout that, that that would be closed quite rapidly. We have been working quite closely with the department to ensure that our packages are satisfactory to that level. Hon NICK GOIRAN: Hence, that is why in your submission you offer three options or three suggestions in terms of the way forward, with none of the three options obviously being the passage of the bill unamended. The third of the options is to pass the bill but delete clause 8, as I understand it. Mr GLADWIN: Well, either delete it or perhaps provide a packaging exemption, with relevant input from us as to what constitutes the minimum standards acceptable for such a package so that it is not open to abuse. Hon NICK GOIRAN: If clause 8 was deleted and the bill passed without clause 8, would that in effect allow your members in Western Australia to operate on the same basis as your members in Victoria? Mr GLADWIN: Yes. The CHAIR: I think that probably comprehensively deals with most of our questions about the 10 per cent cap. As you would be aware, the department’s argument is that while they concede that broker-to-broking services are appreciated by clients, they say the difficulty is that this concierge service is not materially different in character from the scalping activity that the legislation seeks to proscribe. So what are those material differences, in your mind, between a broking service selling packages that come under the heading of “ticket scalping” and those which do not? Mr GLADWIN: My understanding of ticket scalpers are those who have no relationship with the client, who are out there solely to realise the maximum profit possible. They do not pay tax; it is all on the black market. Ticket brokers have ongoing relationships with their clients. There is a trust

Legislation Wednesday, 14 August 2019 — Session One Page 9 relationship. I think if that was eroded by the legislation, our customers would have to, if an event is sold out, rather than going to someone they rely, they would have to go either offshore to Viagogo or Gumtree and just hope that tickets from those entities will work. It is perhaps the same as an insurance broker or a mortgage broker. As we established earlier with the deficiencies in Ticketek and the reviews that have been provided, there is a market. Whether Consumer Protection appreciates that or not—it is unfortunate they do not, but we hope to convince them otherwise. The CHAIR: Is your problem with the idea of a cap per se or with the 10 per cent cap? Mr GLADWIN: Well, I guess any cap constrains the market. Ontario had proposed to bring in a 50 per cent price cap, so obviously more generous than the cap as is being proposed in WA, but even that was repealed. Premier Ford over there said that it is a nice sound bite, but it has no enforcement. That was almost acknowledged by Consumer Protection, notwithstanding their ability to issue consumer warnings. Hon AARON STONEHOUSE: I am interested in the costs involved in providing a brokering service, and then a little bit about prices later. Can you give the committee an idea of the costs incurred for providing the service that you do to your clients? Mr LUONG: We have to pay rent, we have staff and we have to pay Google if we are promoting on Google, so it is marketing costs. We do not always sell our tickets, so some tickets are disposed of. That is essentially a cost. If, for example, an event is rained out—no-one wants to go to a football game when it is raining—we have tickets that clients may have said they wanted to use but they cannot use anymore. That is a cost for us. Mr GLADWIN: GST, taxation obligations, those kinds of overheads. To the extent that a lot of our business is online, that makes it a little bit easier, but you still have—again, David has face-to-face clients and they love the ability to meet in person, telephones, staff costs. Hon AARON STONEHOUSE: Yes. So these are all the costs of a typical small business, I suppose. Mr GLADWIN: Correct. Hon AARON STONEHOUSE: Certain risks involved as well where you may buy tickets in the anticipation a client wants them, and then they cancel at the last minute or it is rained out or something as well. Mr LUONG: Yes, and in the event the client does not want them, we say, “That’s fine.” We hope that we can move them somewhere else, but if a client buys them off, say, Ticketek or Ticketmaster and they want a refund, that is virtually impossible. Hon AARON STONEHOUSE: The costs involved here are very different to what someone might imagine the unscrupulous ticket scalper selling a fraudulent ticket, perhaps, through Viagogo might incur. When it comes to prices, so you have all these various costs involved, 10 per cent is the proposed price cap, but then you have added that other jurisdictions, international jurisdictions, have proposed other, you know, 50 per cent in Ontario and such. What actually determines the price? Can you charge anything you like for a ticket if it is in demand? Mr GLADWIN: Well, we do not like charging extraordinarily high prices to our customers because we like repeat custom. We want to obtain word of mouth referrals. For most events, generally the mark-up is between around 25 and 30 per cent. What is problematic is the reports in the media of astronomically high tickets, you know, tickets sold on Viagogo for 500 times face value. We do not even know in those circumstances whether the tickets actually sold. I mean, any one of you can hop on Viagogo and request, you know—list a ticket for $10 000.

Legislation Wednesday, 14 August 2019 — Session One Page 10

Hon AARON STONEHOUSE: I think I remember a rare Woolworths Ooshie being advertised for some extraordinary price online. I do not think it sold at that price eventually anyway. So what I am wondering, it has been put by some submitters and perhaps by Consumer Protection that the prices were arbitrary and that you can charge whatever you like for a ticket. Is that the case, or do you find that if you charge an extraordinary price that your clients simply will not be interested? Mr GLADWIN: Well, probably the latter. As I mentioned earlier, we like to keep our clients happy. There are some instances where, if they want a front-row ticket to UFC or a front-row ticket, a really expensive ticket, and we have to acquire that either from another broker, there will be market forces at play. Hon AARON STONEHOUSE: Of course. So the client interested in a very desirable front-row ticket to UFC has to essentially outbid other potential buyers for that ticket, right, so there is a scarcity for tickets, there is a limited supply, obviously, and there is perhaps, for a front-row ticket at UFC, high demand. So those factors would contribute to the price; am I on the right track here? Mr GLADWIN: You are, and where it is changing is that that front-row UFC ticket will not be available to the general public. That front-row UFC ticket will and has been listed on Ticketmaster Platinum, which did not exist a number of years ago. That is their high-end, market-based ticket price. So they are essentially—again, it is their prerogative to do it—acting on behalf of the event organiser, scalping their own tickets. Hon AARON STONEHOUSE: That is very interesting. So prices in any case, the point I was getting to, not arbitrary, affected by these various things, supply, demand. There is a scarcity of tickets, of course, and then the costs involved in actually acquiring the ticket, presumably scour the internet, consult with other brokers to try and obtain a ticket in the first place. Ticketmaster or Ticketek Platinum, was it? [10.20 am] Mr GLADWIN: Ticketmaster Platinum. Hon AARON STONEHOUSE: Ticketmaster Platinum—I am unfamiliar with that. How does that work? Mr GLADWIN: In my submission is a case study that discusses Childish Gambino’s New South Wales’ tour. So the New South Wales legislation had only just come into effect. The general public on-sale for Childish Gambino, where general admission tickets were $130, they sold out instantaneously— general public. Ticketmaster Platinum was selling the same ticket—it is just under the Ticketmaster Platinum banner, so market priced; dynamically priced—at $340. Contrast that with Viagogo’s listing at the time, despite them not complying with New South Wales’ law, they were $80 cheaper— market forces at play. Hon AARON STONEHOUSE: So in this sort of black market Viagogo, the market price in the Viagogo black market was actually cheaper than what Ticketek Platinum was selling those tickets for? Mr GLADWIN: In that instance, yes. There are a couple of other case studies I have highlighted in my submission, which show, in respect to the Bruno Mars tour, the only tickets available via the primary market were over $500 packages. If you contrast that with a secondary resale listing on Ticketmaster resale, they were significantly cheaper, albeit not including the package inclusion, so you did not get the nice little lanyard and the program, but you still got a ticket to see the event. Hon COLIN de GRUSSA: Just following on this thing about pricing and the primary and secondary market then, what I seem to be hearing—and correct me if I am wrong—is that obviously there is a margin that you are charging clients for your tickets, but that does not necessarily mean that the ticket is actually more expensive from the secondary reseller than from the primary reseller?

Legislation Wednesday, 14 August 2019 — Session One Page 11

Mr GLADWIN: No, and as demonstrated in those case studies, there are numerous instances where it is cheaper on the secondary market, but what has clouded the debate is the huge media furore around Viagogo confusing customers into believing that they are the official seller, and the conflation of bots. Hon COLIN de GRUSSA: So the margin we are talking about here would not necessarily have the desired effect of making the primary market tickets any cheaper? Mr GLADWIN: No, it would not. It would hand, essentially, a state-sanctioned monopoly to event organisers to continue engaging in similar dynamic pricing as Ticketek Platinum does, as Ticketek Ultimate does, and as is their prerogative, as I said. But there should still be a secondary market to keep that in check. Hon NICK GOIRAN: I notice in your code of ethics that it states that your members should “Refrain from acting in a manner that is detrimental to the ticket brokerage industry or the TBA”, including the use of automated devices programs for the purchase of tickets. That seems to indicate that your members do not bots to purchase the tickets? Mr GLADWIN: Most definitely not. Hon NICK GOIRAN: How do they get the tickets? Mr GLADWIN: That is a very good question. We use a number of methods. We will either have authorisation, as is the case with the AFL, to obtain our own allocation. Often we will obtain tickets from other brokers; and, otherwise, we would rely on the various presales and on-sales in the primary market to obtain that. The CHAIR: So that means you are a primary seller in those cases? Mr GLADWIN: No; we obtain tickets from the primary market and then onsell them. In doing so, for example, David will have a number of client requests for an event. He will acquire them—David, did you want to mention how you do that. Mr LUONG: Yes. For some of my events, I have clients that cannot go, so that is a source of tickets for me as well. I know people who own corporate boxes at Optus Stadium; they cannot always fill them. When they cannot fill them, they will come to me and I generally know someone who might take it. With the arrangements with the Eagles at Optus Stadium, you need to commit to a whole year, and at $500 a person, four people, that is $20 000 a business needs to outlay. They cannot necessarily go to every game, so they use our services in order to recoup some of their investment. That is another source of tickets. We have access to tickets in the Bankwest Club. Bankwest Club is a membership where you get access to every event at the stadium, but not everyone wants to go to the monster truck rally or something that happens at Optus Stadium. We are able to take their tickets—they will say, “We can’t use these tickets, please help us get rid of them.” Rather than them having to deal with Gumtree or whatever way you would normally get rid of tickets, we provide that service. Hon NICK GOIRAN: Let us just use one practical example; let us use Optus Stadium and AFL. If I have a ticket for this weekend and I cannot go for whatever reason, I can give my ticket to you and you will sell it to somebody else. Will you pay me or will you only pay me if the ticket has been sold to somebody else? Mr LUONG: That is a good question. It depends on the client relationship we have. If I have dealt with you before, then I will only give it to you once the ticket sells, but I will only take it if it sells as well. If you are a new customer, you have just come to me off the street, I have to have that assurance that your ticket will work as well.

Legislation Wednesday, 14 August 2019 — Session One Page 12

Hon NICK GOIRAN: Sure. Would there be a scenario where you would just buy the ticket from me outright and just hope for the best that you can sell it to somebody else? Mr LUONG: Yes, I could price the ticket below market and give you whatever, although there will be a price at which it sells. I will determine that price; offer it to you. Hon NICK GOIRAN: That is just me with one ticket. In what circumstances do you buy up a bulk amount of tickets from the AFL at Optus Stadium, for example? Mr LUONG: I personally do not buy anything in bulk at Optus Stadium, from the AFL directly. Our tickets come through our various channels. Hon NICK GOIRAN: The only time that you have more than one ticket for an event is if one of your clients comes to you and says, “Actually, I’ve got four tickets. Can you get rid of these for me”? Mr LUONG: Correct. The CHAIR: That is more likely to be a corporate entity who has bought $20 000 worth of box tickets, is it? Mr LUONG: We have regular members that will buy from us, say, one of their family friends have visitors from England — The CHAIR: They might just be individuals? Mr LUONG: They might be individuals as well. There will be weeks where they cannot go. They do have the option to resell it back to the Eagles, in which case they will receive a third of what they paid for it, but most people do not want to be restricted to that means of selling their ticket when they only recoup back a third or a half of what they originally paid. The CHAIR: So the primary seller only rebates a third of what the ticket cost? Mr LUONG: For the West Coast Eagles, if you are a member, you can sell your ticket back to the club. The club will only give you back half or a third of what you paid for it, and they will onsell it for the original price. So they are effectively making 150 per cent. It is anti-competitive. The person does have the right to just sell it themselves without selling it back to the club. Mr GLADWIN: I think going back to the issue you raised in terms of harvesting bulk quantities of tickets—and those, again, are one of the main issues that consumer protection raised, so much so that they purported that it distorts the market, and had it not been for automated software that does this, it would be a reasonable proposition that the ticket is your property to do with what you like. To the extent that bots are a problem in Australia—again, there is some conjecture. I know consumer protection relied on a Ticketmaster submission to the 2017 Treasury consultation that there is a 30 per cent rate. I note Ticketmaster did not make a submission in that so I am not sure; I could not find that specific one. But the BOTS act in the US, which is I guess what this legislation is based on, to the extent that it prohibits bot activity, there have been no successful prosecutions under that. I do not know if the FTA has a strong appetite to litigate on that. I know that when, ultimately, the ACCC has power over the bots legislation, they could and should utilise their statutory notice powers to serve notices on Ticketek and Ticketmaster for details of the first 20, 30 or 40 purchases, and can then audit those customers, work out what IP addresses are used and really get—because you cannot rely on what Ticketmaster and Ticketek have said. For some reason, they have not been—either they have an estimation of bot use or they have not been specific, and I am not sure why. But the ACCC and, hopefully, state consumer protection agencies, when handed the power, can really clamp down on that practice. [10.30 am]

Legislation Wednesday, 14 August 2019 — Session One Page 13

Hon NICK GOIRAN: Just to finish off this theme, with the primary ticket sellers, when they sell the tickets, is it ordinarily the case that there is a maximum that they allow to be sold to one customer at one time? Mr GLADWIN: I raised this in my submission. There are ticket limits, and it is dependent, because Ticketek or Ticketmaster is acting at the behest of the event organiser, and most event organisers want to sell as many tickets as they can and realise revenue. So they do not want to impede customers purchasing. So there is a bit of a conflict there between the presumption by the general public that ticket limits will be reasonable. In response to your question, our view is that the ticket limits set generally are too generous. Ticketmaster and Ticketek have per-transaction limits and contrast that with per-customer limits, so a per-transaction limit indicates that you can just have multiple transactions. Hon NICK GOIRAN: But what is that normally, on average? Mr GLADWIN: Eight, 10, six, eight, 10—what was it, a ticket limit of four for U2? Mr LUONG: Yes. Mr GLADWIN: Yes. Hon NICK GOIRAN: That is per transaction generally, or — Mr GLADWIN: It depends. Yes, generally per transaction, but it is really at the discretion of the event organiser. Ticketek merely acts on their instructions. Hon NICK GOIRAN: It would be fairer if it was per customer rather than per transaction. Mr GLADWIN: Again, I do not know to what extent that can be legislated. It can be encouraged. Hon NICK GOIRAN: Yes. Hon PIERRE YANG: David, not so much a question, but more just a comment. I have been looking at your website and I was wondering what do you mean by having your tickets from trusted third parties and hospitality providers, but from what you have said, I have a good understanding. My question is more directed to Josh. In relation to your submission, 5.1, about the secondary market being cheaper at times, is it not more the case that it is more expensive in the secondary market than not, in general? Mr GLADWIN: In general, I know a statistic and I cannot remember the exact statistic, but it is a very low number of events that actually sell out. Of those events, it is very difficult to conclude that the reason those are more expensive on the secondary market is because they have all been harvested by secondary market operators. Again, we need to know how many tickets were offered to the general public by the primary market in the first instance. Without that knowledge, we are kind of stabbing in the dark. You cannot make an adequate conclusion. I mean, the instinctive reaction is that the majority of tickets in the secondary market are more expensive. Let us ban the secondary market. It is a really one-sided approach to consider the secondary market in isolation. It has to be done with both in mind. Mr LUONG: And there are many events where the secondary market is much cheaper than the primary market. For example, the Boomers are playing in Perth at the moment. They are also playing in Melbourne. They have had a whole heap of stars pull out. You have had Ben Simmons pull out, you have had all the American stars pull out, and, frankly, no-one wants to go any more, so people are trying to get rid of their tickets. Hon NICK GOIRAN: Steady on. I am going on Saturday. Mr LUONG: Ben Simmons was actually promoted to play. He was actually in the line-up.

Legislation Wednesday, 14 August 2019 — Session One Page 14

Hon NICK GOIRAN: Yes, he was. Mr LUONG: Now a lot of people do not want to go and as a result people are trying to offload their tickets and the prices are cheaper. Mr GLADWIN: To the extent that Ticketek has its own marketplace, you cannot list it for less than face value, and there are still tickets available in primary. So you have people clambering to get rid of their tickets, and there is essentially a restriction on the floor price. They cannot choose to sell it for less. It has to be so that they are on an equal playing field with Ticketek. Hon AARON STONEHOUSE: When we talk about ticket scalping or ticket resale, it seems like we conflate several different things, and this was evident, I think, in the hearing we had with Consumer Protection. There is consumer frustration over increased prices, although as we were talking earlier, the prices are subject to normal market forces of supply and demand and such. Then there is frustration over perhaps misleading or dodgy marketing practices by platforms such as Viagogo that imply that they are the primary seller when they are not, or they imply a certain scarcity of tickets that may not exist. Then the third element seems to be consumers who are defrauded, who buy a ticket that they think is real and it turns out not to be, and perhaps that ticket has been sold to multiple people and when they get to the gate, they are not let in. On that third point, Consumer Protection mentioned that some of those people are actually victims of the venue operator or the primary seller cancelling their ticket because they have identified that it has been sold on—resold. I was wondering if you have any comments on that practice by the primary sellers or venue operators cancelling someone’s ticket because they have found it has been sold, and if that is something you have come across in your practice and how that affects your business? Mr GLADWIN: Thankfully, I am in a position where I abide by the relevant ticket limits. No tickets have been cancelled that I have owned. What I have observed, though, at least in respect of Consumer Protection’s submission and their appearance is that there is a protection in place in the WA bill to stop tickets from being cancelled where they have been sold to no greater than 10 per cent. Just a note on that, it does not actually prevent the cancellation, it just notes that the relevant clause is void. If someone has their ticket cancelled, they were acting within the confines of the law, the ticket was bought for within 10 per cent, they would then have to litigate against Ticketek or Ticketmaster. There would be no pecuniary penalty owing to Ticketek or Ticketmaster for cancelling it. It would just mark it as void. That is a minor point. In response to your question, there are wider measures implemented that address account blacklisting and ticket cancellation in the Consumer Rights Act of UK. So that brings in prohibition on event organisers cancelling a ticket just because it has appeared on the secondary market, unless the event organiser has terms which provide for the cancellation, and here is the important thing: unless that term is not unfair within the meaning of that law. So our unfair contract terms legislation is modelled somewhat on the Consumer Rights Act, but I would strongly suggest, if we are going to address the consumer detriment arising from ticket cancellation, event organisers still want to be able to have control over their inventory, they want to still be able to enforce their terms of sale. Consumers have the expectation that if they buy a ticket, they are going to obtain entry to an event, and it is untested in Australia whether or not a term that enables cancellation by an event organiser is unfair. I would suggest including a provision similar to that which exists in the Consumer Rights Act. Hon AARON STONEHOUSE: I was wondering if you had any idea—I asked Consumer Protection, and they were not able to tell me at the time—but consumers turning up to the gate of an event being refused access, even though they have bought a ticket on the secondary market, you know, through Viagogo, Gumtree or through a broker or what have you, how many of those people have been

Legislation Wednesday, 14 August 2019 — Session One Page 15 defrauded and how many of them have had their ticket cancelled by the venue operator or the primary seller because they have identified that ticket as being sold on the secondary market? Do you have any idea what the breakdown there might be? Mr GLADWIN: I cannot quantify that specifically. However, in relation to fraudulent tickets, you could have a fan who can no longer attend, who is desperate to obtain money back, who is eager to list on a number of exchanges, they do not care, as long as one of it sells, as soon as that ticket sells on Viagogo and eBay or multiple platforms, that is where the duplicate tickets are going to arise. I understand, in most cases, none of the secondary ticket exchanges pay the lister unless the person obtain entry. There is a reasonable time frame that is provided there. So trying to answer your question, how many from cancelled tickets, I recall in consumer protection’s submission, there is a table there. Does that discuss the number of—here we go, “Number of reported invalid tickets”? So it does not indicate what proportion of that was cancelled? No. I think we would need to — Hon AARON STONEHOUSE: That is okay. It is a question that is more for Consumer Protection rather than yourselves. I was just wondering if you had a view on that, because it strikes me that there is a claim being made that consumers are being sold fake tickets en masse, but I have not actually found any data to substantiate that. With the practice of primary sellers and venue operators cancelling tickets that they are identify on the secondary market, it seems that that may have some impact on the number of people turning up at gates and being refused entry. [10.40 am] Mr LUONG: That definitely has an impact. I think in one of the submissions I have read, Ticketek identified overseas purchases and they can generally say someone from Rumania is not going to come to Perth and attend the event; in which case, the ticket could be cancelled. Mr GLADWIN: I know promoter-initiated ticket cancellation is really, really heavily implemented by the Sydney Opera House. My understanding is they have signs there that indicate if you have bought this from Viagogo, please come up to us, and it is essentially a trap. Anyone who goes up to them who says, “I bought them from Viagogo”, the tickets are invalided there and then. Much the same was done by Kilimanjaro, which is a UK promoter, for Ed Sheeran’s event. That was done on a huge scale. You had people having their tickets invalidated and claiming they did not work in order to get their money back from—they had to then repurchase a ticket at the venue. Mr LUONG: The same ticket. Mr GLADWIN: The same ticket, and obtain a refund from Viagogo. We do not know if those refunds were ever obtained. Mr LUONG: So, essentially, the promoter makes money twice on the ticket. Mr GLADWIN: Promoter makes—yes, they capitalise. Hon AARON STONEHOUSE: I mean, in this quest for consumer protection, we are caught up chasing unscrupulous scalpers, but it sounds like there might be a fair amount of frustration inflicted on consumers really by venue operators and primary sellers through these practices. Mr GLADWIN: Correct, and again, a close collaboration between VenuesWest and Consumer Protection, they definitely have the event organiser and venue protections in place, but I think more needs to be done on the consumer side. The CHAIR: In the case of the Sydney Opera House sign, if you did not present to that counter, were you then able to access the venue? Mr GLADWIN: This is purely anecdotal, and I am not sure, in response to your question. I assume some level of buyer discretion would be required, but again, if you are a consumer and you think

Legislation Wednesday, 14 August 2019 — Session One Page 16 you have bought because you clicked on the top result and you have a ticket and you go there and the ticket gets voided, arguably, that is going to lead to negative customer experiences. The CHAIR: I want to turn to the question of the operation of the measures in this bill offshore, because we are dealing with a global market here. You have said that you believe that these operations could easily be moved offshore, and yet, there is a provision in the bill, at 5(2), that extends the application of the act to operations outside of Western Australia. What is your problem with that? Mr GLADWIN: I do not have a problem at all with that. I think to the extent that WA can purport to have extraterritorial jurisdiction over acts that occur overseas, I think they should pursue that with vigour. My understanding, based on the representations made at last week’s hearing by Consumer Protection and echoed in their submission is that it is largely going to be impeded, it is going to be difficult, and they are going to rely heavily on the power to issue consumer warnings. Unless that warning is the first result on Google, either that or the official event organiser, I am really not sure of what utility that measure is going to be. The CHAIR: You have explained about clause 8. Come back to clause 7. What is the problem that your association’s members have with clause 7 in relation to invalid resale restrictions? Mr GLADWIN: I mentioned earlier that the provision saying that a term that purports to cancel a ticket sold for within the 10 per cent is void does not in itself prevent cancellation. They can still go and cancel it. A consumer then has to utilise the consumer rights under contract law. There is no prohibition, it is not an express prohibition on event organisers doing it. The CHAIR: You have also said that Viagogo and other offshore exchanges are, to quote you, “openly flouting New South Wales legislation”. Can you give us some evidence of that? Mr GLADWIN: Absolutely. Any search conducted, whether it be for Queen and Adam Lambert in New South Wales, any event you have got listing on Viagogo and StubHub, to the extent that they no longer appear in paid search results, that being Viagogo, they still show up organically. I would be happy to provide by way of additional submission evidence that shows infinite number of listings that are noncompliant. The CHAIR: You also talk about the 10 per cent cap in Queensland and that nobody has ever been prosecuted in relation to the 2018 games; is that right? Mr GLADWIN: Correct. The CHAIR: So what evidence do you have of that, that the Queensland police are finding it difficult to enforce the provisions? Mr GLADWIN: That paragraph was duplicated almost entirely from the treasury decision, regulatory impact statement. To the extent that they had a basis for asserting that, I would be more than happy to look further into that. The CHAIR: Do you want to take that as a question on notice? Mr GLADWIN: Happily. The CHAIR: So that will be question on notice A1. Mr GLADWIN: I know that they had legislation that was brought in specifically for the Gold Coast games, and they have their other legislation. That legislation, to the extent that it includes an anti- scalping provision, is overseen by the property crime team in Queensland police; not well resourced, and I guess it flows into if there is no resourcing made available, how can consumers possibly expect a provision like that to be enforced and policed?

Legislation Wednesday, 14 August 2019 — Session One Page 17

The CHAIR: Just to test a couple of your other propositions, you say that it is really just a matter of what evidence can you provide, you say that ticketing agencies secretly place event organisers’ tickets directly on the resale site. Do you have evidence for that? Mr GLADWIN: Correct, yes. So there was a recent article, you will note, in my submission, a billboard article which discusses the decision by Live Nation to place some of Metallica’s tickets directly on to the secondary market. I understand Metallica’s excuse was that it was done without their permission or authorisation by their agent, but when you have conduct like that occurring, as referenced in that article footnoted in our submission, it really goes to show that the market, which is as the ACCC sees it, they do not distinguish between primary and secondary, it is the market needs to be assessed as a whole. You cannot possibly have conduct like that occurring and then have objectives such as those thought of by Consumer Protection that the secondary market needs to be thought of in isolation. The CHAIR: You also talk about announcements that there is going to be one show only, when in fact the contract has been signed for multiple shows. Again, do you have evidence of that? Mr GLADWIN: One specific example is that Ed Sheeran show in Victoria. There was a Triple J piece on this, and there were four dates locked in, contracted, for Ed Sheeran at Marvel Stadium, or as it was then known, Etihad Stadium. Michael Gudinski, he is the promoter for Frontier, when he was asked by Triple J did this occur, I think he deflected, and I would be happy to provide you with a copy of that Triple J report that discussed it. These are normally negotiated privately between event organisers and the artists. We are not necessarily saying in all instances it should be a requirement. There are commercial sensitivities. It would have, presumably, a very adverse impact if people knew there was a prospect of a second show, but it just shows the other side of the argument. The CHAIR: You have spoken in much more favourable terms about the Victorian model. Why is that your preference? Mr GLADWIN: Live Performance Australia in their submission highlighted the effectiveness of enforcement outcomes. That, again, comes back to enforcement priorities by the relevant enforcement division. In Victoria, they have hired, for want of a better name, ticket police, to enforce the legislation, and because of the selective nature of the declarations, it is able to be policed a lot more effectively rather than a blanket cap. [10.50 am] The CHAIR: Is it also because – Hon NICK GOIRAN: Can we get elaboration on that? The CHAIR: Yes, I was going to pursue that, but, yes, do you want to elaborate a bit further on that? Mr GLADWIN: To the extent that you have got Viagogo, StubHub, eBay, in apparent compliance with the law, and again, all you need to do is do a normal search on Viagogo, on other resale sites for declared events, you can quite clearly see there is a disproportionate number of listings for New South Wales and Queensland events that are not properly enforced and much less so compared to Victoria. So that would be key, and, again, I am happy to provide you with a graphical illustration or some screen dumps of respective listings. The CHAIR: Yes. I think that might be useful. Mr GLADWIN: Happily. The CHAIR: Take that as a question on notice A2. Hon NICK GOIRAN: You said, I think, the “ease of the declaration” in Victoria?

Legislation Wednesday, 14 August 2019 — Session One Page 18

Mr LUONG: Yes. So the Live Performance—I will just quote from here, it says, “In contrast to the New South Wales laws, our members have provided positive feedback about the Victorian laws. Firstly, the process of seeking a major event ticketing declaration is easy.” So the members from LPA have actually said that the Victorian legislation is a lot easier. They have also said, “Members have not detected a vast number of declared event tickets being offered on resale platforms.” So, in that instance, the Victorian model does seek to serve its members. Hon NICK GOIRAN: So it is easier to get your event declared as a — Mr LUONG: In New South Wales, essentially everything is declared, but they are saying it is not hard to get it declared in Victoria. Hon NICK GOIRAN: When it is declared, it ends up being a good outcome in Victoria? Mr LUONG: It says, yes, so tickets that are being offered on resale platforms have significantly decreased for those events. Mr GLADWIN: That is a positive outcome for consumers, you would think, and, as we mentioned, because of the ability for our members to continue to offer ancillary benefits, it keeps us in business—keeps our clients happy. Hon AARON STONEHOUSE: That is the opinion of the LPA, the Live Performance Australia, which is a peak body group for performers? Mr LUONG: For all sectors of the industry—music promoters, music festivals, live music venues and service providers such as ticketing companies. Hon NICK GOIRAN: The missing part for me, though, is if in Victoria when an event is declared a major event, we see good outcomes, and if in New South Wales nearly all events are declared major events, then you would expect the results to be the same? Mr LUONG: In Victoria—correct me if I am wrong—they take out ads in newspapers whenever there is a major event. They target online social media to say this event is declared. So there is actually actual work done in order to enforce it. Mr GLADWIN: Not only that, but the fines are astronomical. Hon NICK GOIRAN: But not in New South Wales? Mr GLADWIN: New South Wales is $20 000 or $100 000 for companies. That is still hefty. In Victoria, for a corporation doing it, it is up to $450 000-something. Hon NICK GOIRAN: I think ours is $20 000 and $100 000 in this bill. The CHAIR: Presumably, the reason your business model still works with the Victorian situation is that you can continue to operate with events that are not scheduled or not gazetted? Mr GLADWIN: Correct, because the demand for those events is not deemed significant enough to warrant — The CHAIR: There is no cap on the — Mr GLADWIN: No, there is no price cap on those. Hon AARON STONEHOUSE: Can I just clarify? On the issue of enforcement, if I have this right, in New South Wales, everything is a major event, essentially, if we compare it to Victoria. So resources for enforcement are spread thin across the calendar year in trying to enforce a price cap across every event, whereas in Victoria, the minister or department of consumer protection, whatever the equivalent is in Victoria, is able to target a specific event and then bring all their enforcement resources to bear on that one event—advertising campaigns; provide information to consumers—

Legislation Wednesday, 14 August 2019 — Session One Page 19 and then really focus on that one declared event to ensure that enforcement is top notch in that instance. Have I got that right? Mr GLADWIN: You have got that right. Mr LUONG: Yes—where for access to tickets actually matters. Mr GLADWIN: In depicting the extent of enforcement resources undertaken by New South Wales, as I mentioned in the beginning, they have someone in fair trading responding to consumer complaints by basically steering them away from unauthorised resellers. There is no action undertaken if someone has lost money or trying to get their money back to try and recoup that, and I suspect, unless I am mistaken, much the same will be done in respect of the WA bill. Mr LUONG: A large part of it is the market exchange refusing to list these major events as well. Hon AARON STONEHOUSE: It is not just that consumers are aware through Victoria’s consumer protection agencies ad campaigns, but also the platforms and anyone interacting with the secondary market is aware that that is a declared event—that if they breach their obligations for that declared event, they are facing a $400 000-something fine? Mr GLADWIN: Up to, yes. Hon AARON STONEHOUSE: Up to. Mr GLADWIN: If you do a search on Viagogo for the AFL grand final which is a declared event, it does not even show up. The CHAIR: Just to conclude, a couple of questions specifically for David about the Western Australian situation. I think you earlier said that you do not buy, or Epic does not buy, any tickets? Mr LUONG: No, we do buy tickets. I was just saying — The CHAIR: Can you just take us through that? What I am interested in is, for example: does your business buy the tickets, for instance, on a business credit card, and then invoice clients, or do you take the credit cards of clients and then it is invoiced directly to them? Mr LUONG: It is a mixture. Some clients trust us with their credit cards and Ticketmaster accounts. If they require tickets at a certain time, we will just use their Ticketmaster account to acquire the tickets. Sometimes, for example, there are clients who only like aisle seats at Ticketek events, and the only way for me to service them is I actually have to go physically to the outlet in the city, because you cannot select your seat online and you cannot call up. The only way is for them to use a broker like myself to go all the way into the city, buy the ticket from the outlet, and then I will invoice them. But we do buy tickets through general public sales as well for Optus Stadium. The CHAIR: An on-sold ticket would be a tax deduction for your business? Mr LUONG: Yes. The CHAIR: Your customer base, just to give us a clear idea about what we are actually dealing with here in terms of people who use your services, can have—or would you like to take on notice— provide us with the percentage of your customers who are what you described as customer service– centric and time poor, what percentage of your customers are FIFO or regional, and what percentage of your customers are corporate or hospitality clients? Mr LUONG: It is hard for me to say because it depends on the event. The CHAIR: Would you like to take it on notice and give us what you can—to give us an idea about how those proportions line up?

Legislation Wednesday, 14 August 2019 — Session One Page 20

Mr LUONG: Okay, yes. The CHAIR: That will be question on notice A3. Just another point about some evidence for one of your assertions; you say that prices are often 250 per cent to 400 per cent over face value. That is the Ticketmaster Premium and Ticketek Ultimate in New South Wales and Victoria. Do you have evidence of that? Mr LUONG: What was the Childish Gambino? It was $150 — Mr GLADWIN: A $130 ticket being charged out at $340. Again, they are Ticketek Ultimate prices. Depending on how close it is to the event, they will change it so it will be dynamically priced. We would be happy to provide illustrative information there. The CHAIR: Yes, that would be useful. That will be question on notice A4. That brings me to the end of my questions, so I will now just start with the Hon Aaron Stonehouse and go around the table. Hon AARON STONEHOUSE: Back to the price cap of 10 per cent, so, David, you were talking about having to go to the actual Ticketmaster store, physical location, to buy, say, an aisle seat for a client. Let us say $100 ticket, face value, $100, so the most you could charge would be $110 for that service? That would not be worth getting out of bed in the morning, let alone driving all the way to the Ticketmaster outlet—right? Okay. I just wanted to make that clear. The costs you incur in some cases, depending on the face value of the ticket price, would far exceed the 10 per cent cap that is being proposed. Mr LUONG: Correct—cost and time, yes. Hon AARON STONEHOUSE: So a $50 ticket, $5 cap—I mean, that is print it out, take it to a client, it is not really worth your time and your hassle. Maybe a more expensive ticket might be, but as a percentage of the original ticket value, it does not necessarily reflect the costs, the administrative costs, perhaps, of the service that you provide, does it? Mr LUONG: No. Typically, my margin would be a per-ticket number. So for me to go out and go to the outlet and do something for someone or chase down a ticket for someone that needs a ticket, I might charge $30 for that ticket, regardless of whether that ticket is $150 or whether that ticket is $40. Hon AARON STONEHOUSE: So the original price of the ticket has no impact, really, on the administrative cost involved in you providing your service—that is what I am getting at. Mr LUONG: No. Hon AARON STONEHOUSE: A $50 ticket or a $100 ticket, there is no difference necessarily in the administrative costs you have? Mr LUONG: Other than the element of risk, but costs, no. [11.00 am] Hon NICK GOIRAN: Would you agree with me that this bill will not address the issue of the creation of fraudulent tickets? Mr LUONG: I actually believe that it will actually increase the prevalence of fraudulent tickets. We have spoken to Consumer Protection about this and they actually said there will be more fraudulent tickets. Mr GLADWIN: People will be encouraged to buy, because you will have a ton of cost price plus 10 per cent listings for very popular events and they will all be fake.

Legislation Wednesday, 14 August 2019 — Session One Page 21

Mr LUONG: Events will still sell out. People will still want tickets. I have been to event Facebook pages where there are actually foreign scammers on the site targeting customers at face value. Mr GLADWIN: Nigerians. Mr LUONG: And this legislation has nothing to address that. Hon NICK GOIRAN: I will just indicate to the witness that I am conscious of the time, so I will just move on. I just needed confirmation that I have understood the evidence today correctly. Mr LUONG: Yes. Mr GLADWIN: That is, yes; sorry. Hon NICK GOIRAN: I understand you have also indicated to us that the US experience tells us that the prohibiting of bots will not be enforced. Mr GLADWIN: It depends on the appetite of the enforcer. If it is the ACCC, I suspect it will be. Hon NICK GOIRAN: It will be enforced? Mr GLADWIN: Yes. If you have strong nationwide anti-bot laws — Hon NICK GOIRAN: Which we do not have. Mr GLADWIN: — which we do not have, but which we hope will be implemented, we hope the ACCC will enforce them. Hon NICK GOIRAN: The purchase of bulk tickets by people who do not actually intend to attend the particular event, that will not be addressed by this bill either? Mr GLADWIN: No, it will not. It will be at the discretion of event organisers. Hon NICK GOIRAN: Can you summarise for the committee what the bill will achieve? Mr GLADWIN: What it will achieve is, as I referred to earlier, a state-sanctioned monopoly on ticket pricing by event organisers. It will result in the creeping increase of offerings on Ticketmaster Platinum and Ticketek Ultimate. It will result in the cessation of David’s business and will send all of his and our WA clients to offshore operators. Hon COLIN de GRUSSA: You talked about the cap at some length—the 10 per cent cap arbitrary will not work. Is there a way that a cap could work if you, for example, had a sliding scale depending on the value of the ticket? Is that something you have considered at all? If not, that is fine. Mr GLADWIN: We do not think any cap. Realistically, if you adopt the same economic approach as you do in any other market-based argument, you would not have a price cap. I remember seeing after the second reading speech, Minister Quigley went on to discuss petrol prices and mentioned that, you know, because WA consumers cannot control the market price for fuel, so what we have to do then is try and find and publicise what is the cheapest–offered petrol price, and that is where FuelWatch came in. I honestly do not see any distinction for that. Perhaps the only distinction there is, is that there is a strong emotional attachment to tickets, and therefore a different option is being proposed. The CHAIR: I do have one final question that I skipped over earlier, which is that amongst your suggestions of eight non-legislative proposals, number 6, I think it is, is called ticket suppression. Mr GLADWIN: Yes. The CHAIR: Can you tell us what ticket suppression is and why you think it works, please? Mr GLADWIN: Ticket suppression results in tickets being delayed. That is a promoter-implemented decision. It is either because production details of the event have not yet been finalised, or as an

Legislation Wednesday, 14 August 2019 — Session One Page 22 incentive to squeeze ticket scalpers, so their finances. Going back to what I have said, if a scalper lists on Viagogo, they will not get paid until after the event. If the ticket suppression is in place until much closer to the event, it will not enable them additional funds to invest in other events. It constrains their funds. The CHAIR: So it is a shorter sale period? Mr GLADWIN: Correct. The sale period can be from whenever the tickets go on sale, but unless and until the ticket scalper has fulfilled that transaction on a site like Viagogo, they will not get paid. The CHAIR: Thank you. I think that brings us to a close. I will just go through the closing statement and then you are free to go. Thanks for attending today. A transcript of this hearing will be forwarded to you for correction. If you believe that any corrections should be made because of typographical or transcription errors, please indicate these corrections on the transcript. Errors of fact or substance must be corrected in a formal letter to the committee. Due to the short reporting period, when you receive your transcript of evidence, you will have five working days to provide both transcript corrections and the answers to questions taken on notice. Finally, if you want to provide additional information or elaborate on particular points, you may provide supplementary evidence for the committee’s consideration when you return your corrected transcript of evidence. Thank you very much. Hearing concluded at 11.05 am ______