So, your favourite band is coming to town and you are desperate to get tickets. You go online but can’t seem to get through…and when you do, the tickets are all gone…but then they pop up on a different site at a vastly inflated price. What happened? You may have just lost out to a super-scalper, possibly assisted by ‘bots’ that scoop up tickets online faster than any human can. The Fifth Estate delves deep into the incredibly lucrative world of online ticket sales with the story of a Canadian Super Scalper – as revealed in the Paradise Papers.
- An investigation by CBC/Radio-Canada and the Toronto Star, based in part on documents found in the Paradise Papers, rips the lid off Lavallée's multimillion-dollar operation based out of Quebec and reveals how ticket website StubHub not only enables but rewards industrial-scale scalpers who gouge fans around the world
- CBC News obtained sales records from three U.K. shows that provide unprecedented insight into the speed and scale of Lavallée's ticket scam
- Despite a four-ticket-per-customer limit, his business snatched up 310 seats in 25 minutes, charged to 15 different names in 12 different locations -- a grand total of nearly $52,000
When Adele fans went online to buy tickets to the pop superstar's world tour last year, they had no idea what exactly they were up against.
An army of tech-savvy resellers that included a little-known Canadian superscalper named Julien Lavallée managed to vacuum up thousands of tickets in a matter of minutes in one of the quickest tour sellouts in history.
The many fans who were shut out would have to pay scalpers like Lavallée a steep premium if they still wanted to see their favourite singer.
An investigation by CBC/Radio-Canada and the Toronto Star, based in part on documents found in the Paradise Papers, rips the lid off Lavallée's multimillion-dollar operation based out of Quebec and reveals how ticket website StubHub not only enables but rewards industrial-scale scalpers who gouge fans around the world.
CBC News obtained sales records from three U.K. shows that provide unprecedented insight into the speed and scale of Lavallée's ticket scam.
Despite a four-ticket-per-customer limit, his business snatched up 310 seats in 25 minutes, charged to 15 different names in 12 different locations.
The grand total? Nearly $52,000 worth of tickets at face value.
'Simply not feasible'
Lavallée's name appears over and over in the records, alongside the names of his wife, his father and other friends and family. The records show them somehow buying tickets from different locations around the world at the same time, placing orders from cities like Chicago, Los Angeles, London and Montreal.
"The speed of the transactions — this isn't somebody sitting there typing details over and over again," said Reg Walker, a U.K. event security specialist hired by some of London's biggest concert venues.
CBC News and the Star showed Walker the U.K. sales records.
"Given the success rate, even if you had a dozen people sitting there typing their details over again, you would not get these results," he said. "It's simply not feasible."
Lavallée's name is very familiar to Walker. He says he's spotted Lavallée targeting tickets for many U.K. concerts and suspects the Canadian is using multiple identities and aggressive software, known as bots, to trick the system.
Walker says there is no legal way for people located in the U.K. to "harvest" tickets.
"If you pretend to be multiple consumers, or if you pretend to be a consumer and you are acting as a business, it's a criminal offence."
CBC's investigation has found a patchwork of anti-scalping laws around the world that are seldom enforced or don't always apply to scalpers working across international boundaries like Lavallée.
The leak of tax haven records known as the Paradise Papers reveals for the first time the vast sums of money involved in Lavallée's ticket operation, which is part of a global scalping industry that experts value at $8 billion.
Lavallée, who got his start in his early 20s reselling hockey and concert tickets while living at home with his parents, now runs an international ticket harvesting operation.
Financial records detail $7.9 million in gross sales in 2014 alone.
On his resume, he describes himself as a "ticket broker" and lays out plans in 2015 to expand into the U.K. in a "partnership" with StubHub.
"The staff at StubHub told me that he was one of their biggest global resellers," Walker said.
StubHub's 'top seller' program
CBC and the Toronto Star have discovered StubHub actually has a program to forge relationships with those it calls its "top sellers."
StubHub, which promotes itself as a "fan to fan" resale site, now operates in 47 different countries but discloses very little on its website about where it gets its massive inventory.
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But the CBC/Star investigation also discovered a password-protected portal exclusively for StubHub's top sellers who prove they can move more than $50,000 worth of tickets a year.
The company offers them special software to upload and manage huge inventories of tickets.
In its Top Seller Handbook, Stubhub offers incentives for high-volume resellers, including reducing its 10 per cent cut on each ticket sold. The higher the reseller's numbers, the sweeter the deal, with special rates for those who hit sales of $250,000, $500,000 and up to $5 million US per year.
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In a statement, StubHub acknowledged it has a top seller program but refused to say how many people are enrolled or what percentage of StubHub's overall supply comes from industrial-scale scalpers.
StubHub also refused to comment on Lavallée and his claims of a "partnership" with the company. StubHub said it "holds all sellers to a very high standard and requires they follow all relevant laws."
The company declined to elaborate on how it monitors and vets its top sellers, but said it does not condone illegal purchases of tickets
"StubHub agrees that the use of bots to procure tickets is unfair and anti-consumer. StubHub has always supported anti-bots legislation and encourages policy-makers to look comprehensively at the host of factors that impact a fan's ability to fairly access, buy, resell, or even give away tickets in a competitive ticket market."
Lavallée has run multiple companies, including one registered in Quebec, and another across the Atlantic on the British Isle of Man, a well-known tax haven.
One of CBC's partners knocked on the door at the company's Isle of Man address but nobody there had heard of Lavallée.
A day later, he dissolved the company.
CBC and the Toronto Star did track him down at newly rented offices in suburban Montreal where he runs a company called Ticketaria.
Lavallée, his wife and father, who work together in the business, all declined to answer questions.
In an emailed statement, his lawyer said Ticketaria "carries out all its activities in accordance with the laws and rules of the jurisdictions in which it operates and sells."
Who gets hurt?
Quebec actually has a law aimed at banning the resale of tickets for profit. But, like in many jurisdictions, the law is unclear as to how far it reaches and whether it applies to people who buy and sell tickets outside of the province.
What's clear, says John Karastamatis of Toronto's Mirvish Productions, is "no one can regulate the internet yet."
His theatre witnessed Lavallée buy up tickets for the smash hit Book of Mormon in 2014, as did many other scalpers who resold them for huge profits.
"Governments more or less think scalping is not a real crime," he said. "They think it's victimless crime. 'Who gets hurt?' And so nobody pays a lot of attention to it."
More Paradise Papers coverage:
- Tax havens explained: How the rich hide their money offshore
- A list of notable Canadian companies and people in the Paradise Papers
- Chretien lobbied for African oil company he didn't know was in a tax haven
- How the Paradise Papers reveal financial secrets of the global elite
- Nike shifted billions in profits to tax-free Bermuda
- Want to save money on your private jet? There's a tax haven for that