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Media & Entertainment Law

: Sports Biz

NCAA and Ticketmaster Hit with Class Action Lawsuit

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In order to obtain tickets to the Final Four at face value from the NCAA, you have to enter a lottery that begins on the day after the previous year's Final Four ends. The NCAA and its ticketing partner Ticketmaster have just been hit with a class action lawsuit in a California federal court alleging that the ticketing scheme constitutes an illegal lottery.

For those of you who may not have tried to get Final Four tickets or early round tickets, which are sold separately but the sale is conducted in the same fashion, the NCAA conducts a lottery as follows: You send in the full value for the number of tickets requested and an additional amount per ticket labeled a service fee. The NCAA then holds a lottery and notifies the winners sometime in the fall. If you are not selected than the NCAA refunds your money and keeps the service fee. The NCAA and Ticketmaster benefit from the service fess retained and additionally the NCAA benefits from the interest earned on all of the money received in May and kept until the fall when the price of the tickets is refunded to the those who did not get tickets.

The case was filed in California, a state in which both the NCAA and Ticketmaster do business. Lotteries are illegal in California and Indiana, where the NCAA is headquartered, unless conducted by the state or licensed charities.

The NCAA may be unique in handling tickets in this way - that is keeping the service way for all requests that don't receive tickets. That payment for a chance at tickets may well be the key to a fairly high judgement against the NCAA and Ticketmaster if they allow this case to proceed to trial. Plus, the NCAA's track record in court hasn't been too good lately. Most states define a lottery as payment of value for a chance at winning something of value. By retaining the service fee, the NCAA has converted its ticket lottery into an illegal gambling enterprise. Just the thing that Myles Brand spends so much time and effort running around the country trying to prevent states from legalizing.

Full post as published by Sports Biz on May 27, 2008 (boomark / email).