Photo Credit: Lee Jiyong
The Korean National Tax Service (NTS) has opened a probe into professional ticket resellers accused of turning K-pop fandom into a black market. This action follows the United States’ FTC and DOJ investigations into Ticketmaster and Live Nation over violations of the BOTS Act.
The NTS says the probe reflects growing concern that profiteers are exploiting fan culture for commercial gain. Korea’s JoongAng Daily explains that entities are buying up tranches of tickets to resell to fans and tourists at prices inflated up to 2.5 their original price. Over the past six years, these travel agencies have purchased and resold at least 40,000 tickets—generating roughly 10 billion won ($6.89M) in unreported revenue. That’s a similar strategy to the entity currently being sued by the FTC in the United States.
An NTS report found that on major ticket resale platforms this year, about 400 users—representing the top 1% of resellers—accounted for nearly half of all ticket sales. Each of them handled an average of 67 million won (~$46,000) in annual transactions. NTS investigators are focusing their probe on this top 1% of resellers who are suspected of tax evasion including 14 individuals and three corporations.
The most common tactic appears to be buying tickets and then reselling them at a markup through secondhand marketplaces like StubHub and SeatGeek. At least one reseller reportedly sold tickets to K-pop concerts and professional sports games at extreme markups. In some cases, concert tickets original priced at about 160,000 won (~$110) were resold for as much as 2.4 million won (~$1,650)—roughly 15 times the face value.
The NTS is also investigating what it calls ‘proxy ticketing,’ where resellers use automated tools to buy up large quantities of tickets. Some operators established formal companies to appear legitimate and even received tax deductions meant for startups. In a first for this type of action, the NTS appears to be investigating individuals who sold these macro tools directly.
“Given the scale and urgency of the issue’s impact on the public, we will thoroughly examine the resellers’ earnings, cash flow, and hidden assets,” says Ahn Deok-soo, head of the investigation bureau at the NTS. The agency will also scrutinize other practices that undermine fair market relations for ticket buyers.
In the United States, Ticketmaster recently shuttered its TradeDesk platform amid DOJ scrutiny. This platform made it possible for ticket scalpers to bypass strict ticket buying limits and did not enforce any sort of ID verification—allowing resellers to maintain hundreds or thousands of of accounts.
