Federal Lawsuit Alleges Billion-Dollar Ticket Scheme
A California-based ticket broker is accused of violating federal law by illegally acquiring millions of event tickets for resale at inflated prices.
Federal authorities have filed a lawsuit against REPS & Company, a San Diego-based ticket broker, alleging the company orchestrated a billion-dollar scheme to acquire millions of tickets for high-demand concerts and events, subsequently reselling them at exorbitant prices. The Department of Justice and the Federal Trade Commission announced the suit on Thursday, accusing the company and its executives of violating the Better Online Ticket Sales (BOTS) Act.
The BOTS Act prohibits the use of automated systems to circumvent online ticket purchasing limits. According to the complaint, REPS & Company and its executives—CEO Ryan Pancheri, President Brian Archibald, and COO Nicholas Totagrande—utilized tactics to bypass these restrictions. Since 2022, the company has allegedly purchased more than the permitted ticket limit for at least 83,500 events. Prosecutors claim REPS spent over $1.3 billion to acquire more than 18.5 million tickets, generating at least $120.8 million in profit through resale on secondary markets.
Assistant Attorney General Brett A. Shumate stated, "The Justice Department is committed to holding accountable individuals and businesses that drive up the cost of event tickets by illegally exceeding ticket purchase limits and reselling those unlawfully obtained tickets with exorbitant markups." He added that the department, in conjunction with the FTC, will continue to enforce the BOTS Act.
One particular instance highlighted in the complaint involved the resale of tickets for a Beyoncé concert in Kansas City in 2023. REPS allegedly used 1,300 accounts to purchase 7,624 tickets, resulting in a profit of $833,000 for that single event. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, commented, "REPS’ entire business model is focused on trying to game the ticket-purchasing system in order to obtain as many tickets as possible to resell at inflated prices to consumers."
The lawsuit details how REPS allegedly circumvented ticket limits on platforms like Ticketmaster by employing a team, primarily based in the Philippines, to purchase tickets. These employees allegedly used the names, addresses, or phone numbers of other individuals to create accounts. The company is also accused of using IP proxy services and multi-session browsers to mask the identity and location of the account users. Agreements with employees and third-party partners reportedly authorized the use of their personal information to establish multiple accounts with ticket issuers.
"Defendants’ actions injured consumers who otherwise may have been able to purchase those tickets in the first instance from ticket issuers at lower prices," the complaint asserts.
California lawmakers have previously attempted to address issues in the ticket resale market. This year, two bills were introduced, one banning speculative sales of tickets not yet owned by the seller and another capping resales at 10%. While one bill was signed into law, the other did not advance.