Thursday, February 22, 2007

Lotteries Suck


That's the email I got from the Mets today. More than a dozen people I know tried and failed to win the right to buy tickets to any of the *four* games offered in this poor choice of method to allocate tickets. It's like the Mets made a conscious decision to prevent average fans from getting Opening Day tickets except through a scalper.

Think about it this way: With a lottery, you guarantee that eBay sellers and scalpers will sign up for the sole purpose of putting the tickets on the secondary market. Since the lottery signup is online, the barrier to entry is tiny (an internet connection and a credit card to buy tickets if you win the lottery) and there are no geographic hurdles (a reseller in Flushing can register as easily as one in Fargo). Because of the low cost of entering the lottery, resellers will enter many, many, many times, lowering the chance that any single Mets fan will win a chance to purchase tickets.

If, instead, every ticket the Mets wanted to sell for these games was put on the auction block, scalpers could still participate, but there would be little profit opporunity for them. That's because fans who want to go to the games would buy tickets at the "market clearing" price. Scalpers could try to bid $51,111,111 for dugout seats, but would be unable to resell them for more.

Using a lottery begs the question: Are the Mets trying to help out scalpers, or are they just too stupid to realize their mistake?

11 comments:

Anonymous said...

Maybe the potential for scalpers to get the tickets is an acceptable risk for the chance that some actual baseball fans can go to opening day. Auctions for such a highly sought after product would quickly reach price levels out of reach for many fans. By your logic, why not auction every single ticket to every game?

rukrusher said...

I had no problem with the system last year in the playoffs. I did not win btu I felt it was as fair as getting on line two days before or the random wrist band. Scalpers will get the tickets. Nothing you can do about it.

Adit said...

Yeah, looking out for the regular joes that can bid on two tickets that'll end up going to some richie-rich that can shell out $1000 to see one freaking baseball game. I can see it now...oh to dream.

Nye! said...

Auctions for such a highly sought after product would quickly reach price levels out of reach of many fans.

But isn't that what's happening now anyway? Aren't scalpers already getting the tickets by entering the lottery dozens or hundreds of times? Aren't many fans already being pushed out by the high secondary market prices?

An auction would likely increase the price of tickets at the box office window, but it would also eliminate or greatly reduce the viability of the secondary market. That means the profit would go not to the scalpers, but to the Mets. In theory the Mets could put that money to use improving the team for the benefit of the fans, rather than lining the pockets of scalpers with it.

Wanda (aka Metschick) said...

I won the lottery, and I'm ecstatic (I was shut out of every lottery held for playoff tix last season, so I know it sucks.)

Anyway, just wanted to tell you that I'll be buying tix to the Home Opener, and to two of the Yankees/Mets game. With regards to the Yankees/Mets series, I'll only be able to go to one game, so if you like, I'd sell you the other pair of tix for the day I don't go. I'm going to buy tix for Sat & Sun, and will know in April which day I can make it.

Email me if you're interested, wdejesus79@yahoo.com

same anonymous as before said...

nye! wrote: Aren't many fans already being pushed out by the high secondary market prices?

Yeah, but the ones who win the lottery are not. So it really comes down to two options: either regular people have some chance to get tickets, and scalpers make a big profit by selling to big spenders, or just the big spenders have any chance to begin with, and the Mets, not the scalpers, profit. Neither option is perfect, but I think that the chance a regular guy could get a seat is pretty nice. Either way, I'm a Phils fan and you can only get Opening Day tickets here if you buy a season ticket or 6 game package ... not too unreasonable, but annoying nonetheless.

Quality said...

@ Metschick - thanks for the offer, but I'm never sure when I can get to a game (unless I take a vacation day from work, like I did on last year's opening day).

Back to the economics of tickets...

By distributing tickets via online lottery, the Mets KNOW that people will register just to scalp the seats. Every scalper that enters the lottery lowers my chance of getting a seat.

@ adit - Don't think for a second that the Mets are putting field-level box seats in the lottery. Because those are the only seats "richie-rich" is paying $1,000 for. You think a Wall Street banker will pay that much to sit in the upper deck? No way.

I would much rather have a fair chance at paying $50 for an upper deck seat in an auction held on February 22 than a microscopic chance of winning a chance to pay $25 through the lottery. At least, like an eBay auction, I would know how much *I* value attending Opening Day, and I could bid that high. If other people value it more, good for them!

Ben said...

Um, I'm really glad they had the lottery. I signed up, and won. I also won one of the playoff lotteries last year. If the Mets did not use this system, I would not have been able to get these tickets (b/c I would never pay "market clearing price" for any of these games).

Sure, scalpers enter these lotteries. But what I don't understand is why you seem to care whether the economic value extracted from selling tickets above face goes to the Mets or scalpers (maybe b/c if they Mets made more money they could invest in better players? But I don't think you are arguing that here.)

Ultimately, to me the question of which method is better is answered by which method ends up handing the most economic value to the fans. (Economic value here = value to end user of ticket less price paid by ticketholder).

Clearly, the lottery method is superior, b/c some percentage of tickets will be sold at face, i.e., below market value, directly to fans (with the rest going at scalper price level = market clearing price). In the auction method, all tickets will go at the market clearing price, which means that no fans will extract any economic value.

(Note: obviously this is a stylized example, assuming homogeneous valuation of Mets tickets across fans, but I think the point is still relevant even when this is not the case: no matter how you slice it, by selling some tickets at face, fans are bound to extract some economic value that they would not in an auction scenario.)

Finally, let's do a little thought experiment: exactly how many "scalpers" do you think there are that enter this lottery? Let's say there are 200,000 ticket scalpers who might be interested in the lottery. And how many times do you think each one will enter, _on average_ given likely registration requirements around unique email accounts, credit card numbers, etc? Now, exactly how many Mets fans do you think there are that might be interested in getting these tickets? Let's say there are 1 million fans who might be interested. And why might these fans, whose interest in getting sub-market price tickets would seem pretty high, be much less likely to enter multiple times relative to scalpers?

My point here: you and your friends were more likely victims of the numbers game relative to other fans rather than relative to scalpers. And remember, you can now pay the scalpers the market clearing price if you still want to go.

To summarize: from the fans' perspective, your argument makes no sense.

Now that's how you debate!

Quality said...

Ben, the original post responded to the Mets' announcement that the lottery was designed "to provide fans a fair and convenient way to purchase tickets from the limited availability" of these premium games.

Any ticket distribution that allows 200,000 non-fan entries (as per your estimate of scalpers) lessens the chance that any one fan (me!) will get a chance to buy tickets. That does not strike me as fair.

The same argument applies to the Mets' claim of "convenience." Of course I can now go through scalpers for tickets, but it would be more convenient for me to buy tickets through a Mets-run auction. That's true because, first, such a setup would let me see the entire ticket inventory on one site rather than the few tickets each scalper holds. Second, there's much convenience in knowing that buying tickets through the Mets guarantees the tickets' authenticity.

I agree with you that the lottery makes tickets cheaper for fans, but as I wrote back on February 9, it's only "fairer" and "more convenient" for the fans who win the lottery.

Thanks for reading.

William said...

I went to the first game of the NLDS last year as a lottery winner and I have to agree with what other commenters are saying. In such an especially sought after game, the "market clearing price" would keep many people, such as myself, out of the stadium. A lottery "guarantees nothing", true, but do you really want a system in which the most sought after games are attended by only the richest fans instead of mostly the richest fans? Personally, I prefer a system in which tickets are split between a lottery and a single box office (ensuring more of a safe bet for fans who really want to go and can spend time instead of money). The ones with expendable money can hire someone to wait in line.

And I am not eagerly anticipating what prices are going to look like at the new stadium, especially during the playoffs.

The Hey said...

The lottery system is OK by me, but it needs fixing. If you sorted lottery entries by phone numbers or addresses that would lower the number of fraudulent entries and allow more people who actually want to attend the game to acquire tickets.