California is the newest battleground for the future of ticket scalping with a new bill that would effectively outlaw resale in the state working its way through the statehouse.

Assembly Bill 1720 — known as the “Fans First Act”— would cap ticket resale prices in the state at no more than 10% above the original purchase price, including fees. The law would severely gut concert ticket scalping in the U.S.’ highest grossing state, dismantling a sprawling industry dominated by professional brokers and speculative traders. Opponents warn it could drive ticket sales underground and create new risks for consumers.

The bill, introduced by Assemblymember Matt Haney, advanced out of committee after a lengthy and often heated hearing earlier this month that included testimony from artist manager Randy Nichols and Music Box San Diego owner Joe Rinaldi. Together, their testimony described a system increasingly defined by financial engineering, automation, and large-scale arbitrage.

“Scalper marketplaces are not fan-to-fan resale platforms,” Nichols told lawmakers during the hearing. “They have become unregulated equities platforms, profiting from the gap between the artist’s initial pricing and what the market will bear.”

Nichols, who serves on the board of the National Independent Talent Organization, described the resale market as a sophisticated financial system that has evolved well beyond simple ticket flipping.

“This is a financial infrastructure built to extract value from artists and fans,” he said, pointing to the role of hedge funds, speculative investment strategies, and automated purchasing tools.

While Nichols focused on the structure of the market, Rinaldi brought lawmakers inside the day-to-day reality of running a venue in that environment.

Rinaldi, who operates Music Box San Diego and represents hundreds of independent venues across California through the state chapter of the National Independent Venue Association, described industry level ticket scalping as a “market failure” playing out in real time.

“In a healthy market, resale solves problems like a missing babysitter,” Rinaldi said. “But today we face a negative sum game driven by diversion.”

That diversion, he explained, includes professional resellers using bots to ticketing intercept inventory the moment it becomes available. Those tickets are then relisted at dramatically higher prices, sometimes reaching multiples of the original cost.

But the impact doesn’t stop at higher prices.

“When a scalper flips a ticket at 250% to 3000% markup, they aren’t just overcharging a fan—they’re often killing a seat,” Rinaldi told the committee.

In practical terms, that means venues can end up with empty seats despite officially sold-out shows. Tickets priced far above what most fans can afford simply go unsold, even as demand exists at lower price points.

“My staff stands behind a bar looking at a sold-out floor that is 20% empty,” Rinaldi said.

He described those empty spaces as “ghost fans”—people who intended to attend but were priced out or misled by inflated resale listings. The financial consequences ripple throughout the venue, affecting everything from staffing decisions to concessions revenue to artist compensation.

For Rinaldi and others in support of AB 1720, the solution is to remove the incentive structure that makes large-scale scalping profitable in the first place.

“The proposed 10% price cap is the surgical intervention we need,” he said. “By removing the speculative upside, we fundamentally disincentivize the professional scalpers.”

Supporters argue that by limiting profit margins, the bill would effectively push industrial resellers out of the market, leaving behind a more traditional, fan-to-fan resale environment where tickets are exchanged at or near face value.

They also emphasize that the bill does not ban resale altogether. Fans would still be able to resell tickets they cannot use—just not at the extreme markups that have become common in recent years.

Critics of the bill however argue that price caps do not eliminate demand—they simply redirect it. By preventing high-priced transactions on regulated platforms, they say, the bill could push buyers and sellers into less transparent spaces like social media, private groups, or in-person exchanges.

In Nichols’ view, the stakes go beyond a few tickets being sold on Facebook.

What’s at risk, he suggested, is the integrity of the live event experience itself—an ecosystem built on artists, venues, workers, and fans, not speculative markets.

Rinaldi echoed that sentiment, warning that the current system is eroding trust and sustainability across the industry.

Independent venues, he said, are being squeezed by forces they cannot control, even as they bear the consequences of a resale market that operates largely outside their reach.

The bill’s narrow passage out of committee reflects those tensions. While AB 1720 is moving forward, lawmakers made clear that significant work remains, with potential amendments aimed at refining enforcement and ensuring the policy targets large-scale resellers rather than individual fans.