You may be familiar with the term “scalping” as it’s often used in sports and entertainment, and more and more, you hear this term being used in the cryptocurrency space.
What is Scalping?
If not, let us explain: Scalping is a trading strategy that aims to take advantage of small price variations of stocks over a short period. Some traders use specific algorithms based on technical indicators such as moving averages or oscillators.
The goal is to buy stocks as soon as their price falls below their average value (for long-term investors, this would be buying at a discount) and then sell them as soon as their value surpasses the average (hence the term “scalping”).
What is a Scalper Bot?
Scalper bots are automated programs used by scalpers to purchase many tickets for popular concerts and sporting events. They can be programmed with a set of rules allowing them to wait until a particular condition is met before purchasing.
For example, a bot could wait until a ticket is available at or below face value on Ticketmaster, or it could wait until the cheapest pair of seats reaches a certain price level. Because many scalper bots compete for the same inventory, they can lower retail prices as they buy up tickets faster than people without such technology could ever do themselves.
In recent years, scalper bots have become an increasingly common tool used by professional ticket brokers to obtain tickets for resale at much higher prices.
How Do Scalper Bots Work?
Scalper bots are generally programmed to automatically log into ticketing websites, refresh the current inventory of tickets available for purchase, and click on specific seats that meet the user’s criteria (i.e., location, price range, etc.). When a seat is chosen, several actions may take place depending on the bot type.
If the chosen seat is still in inventory for a given event, bots sometimes employ ‘Sniping’ technologies that automatically place a bid on that seat at the end of an auction when it is down to its last few seconds or when no one else has been bidding on it.
In other cases, when a selected seat reaches sell-by date before a bidder can complete the purchase, bots automatically refresh the page to buy up inventory before it is sold out.
The act of refreshing the webpage transfers the seat(s) desired to the bot’s basket and reiterates all other prerequisites for purchasing (i.e., payment information, booking fee, delivery details).
Let’s take you through how this type of scam works step by step and some examples:
A new gig is announced, and scalper bots are unleashed. The bots check the event information against a pre-programmed list of ticket vendors to see which will accept automated bulk orders. For example, some venues require tickets to be delivered by courier, so unauthorized purchasers can’t use them. Others limit the number of seats available for sale online or only offer mobile e-tickets that must be bought with an app. So instead of trying to deal with these restrictions, scalpers program their bots to check out all possible sources and hope for the best.
Once the bot finds available tickets on each website it checks, it uses hundreds if not thousands of different IP addresses (which we’ll explain later) and attempts to complete checkout as fast as possible.
On average, it takes about 200 milliseconds to process a credit card transaction and confirm payment (including clearing funds from your account). That means that when it takes for you to blink twice, the bot could make 2,000 successful attempts at buying tickets online.
Since most tickets are sold in limited quantities, even if the bot only makes one purchase per second, that’s still 8,000 seats per minute and 480,000 seats per hour (not including holidays and weekends when transactions go through faster). Scalper bots often try to buy all available tickets within seconds of them going on sale online. This means that scalpers get first dibs on any good seats while regular fans leave whatever is left.
Scalper bots are programmed to use different IP addresses. That way, when one gets blocked or blacklisted by a site for being too fast, the others are still operational. Some scalper bots have been known to use up to one million different IP addresses at once. Since there are 4,000 unique IP addresses per second (or around 546,500 per minute), this gives bot operators an almost infinite number of chances to get past security and make purchases.
The more tickets available, the better chance the bot has of making successful purchases. Bots target popular events like Justin Bieber concerts to buy up all the best seats in minutes. This means that regular fans who aren’t using-buying bots get left with the worst seats in the house.
Websites like StubHub and FanLogic have started to employ IP-address blocking when purchasing tickets, which means bots need to add even more IPs to their list of addresses.
Scalper bots can account for around 60-80% of all ticket purchases made online. A study by the New England Patriots found that scalper bots accounted for most of their ticket sales, with a majority going to ticket resellers instead of fans. The same was true at a Bruce Springsteen concert, where they found that scalpers bought up 95% of most tickets. Only 5% were available for purchase from Ticketmaster’s official website.
Some scalper bots are programmed to wait for an event’s tickets listed on Craigslist or StubHub. The bot purchases the tickets and sells them at a higher price through other third-party websites when this happens.
Scalper bots affect more than just fans. They also affect stadiums and even the artists themselves. For example, Taylor Swift tried to restrict ticket sales by scalper bots at her 2017 concert in Arizona by limiting the number of seats available online and selling paperless tickets that can only be bought with mobile payment apps like Apple Pay or Google Wallet. This meant that regular fans who paid face value had a better chance of scoring a good seat while scalpers were forced to look elsewhere for their profits.
In December 2014, a man from Michigan was sued by Ticketmaster for reselling 1,200 tickets to the Broadway musical Hamilton through third-party sites like StubHub. The lawsuit claimed that scalper bots were used to buy as many seats as possible at prices above face value and then resell them on other websites.
Common Defense Strategies Against Scalping
So, how to stop scalping? When confronted with scalper bots, event organizers have used various means to beat them at their own game.
One popular strategy involves implementing a CAPTCHA system that requires buyers to prove they are human by entering random letters or numbers into a box before completing an online transaction. This security measure prevents automated programs from making purchases since they cannot read what is presented on the screen (CAPTCHA stands for “Completely Automated Public Turing test to tell Computers and Humans Apart”).
Some event organizers have also introduced a ‘queue jump’ system, which requires visitors to wait in line (often on a mobile device) before purchasing tickets. This will stop scalper bots because they cannot refresh the page fast enough to get ahead of other online users.
Finally, many sites require buyers to pay by credit card when purchasing tickets rather than give their name and address (often requested on some resale sites). While this does not prevent scalpers from buying up every ticket in sight, it makes the process of obtaining the ticket more cumbersome and less likely for them to achieve their goal.
Prevent Scalping with Anti-Scalper Bot Software
Organizers of events frequently targeted by scalper bots turn to anti-scalper bot software as a counteractive measure against this practice. Such software is designed to mimic the behavior of a manual ticket purchaser and is programmed with algorithms that can identify when a seat has been sold before a human user could do so.
The software then refreshes the page to take over the desired seats for purchase before they are gone. In addition, anti-scalper bots can be used to monitor how many times a certain inventory has been purchased within a given timeframe. This allows event organizers to display special offers on tickets after they have been scalped several times previously.
If scalpers have already bought up every ticket in sight, event organizers can offer a higher number of tickets at a lower price to encourage first-time buyers to purchase.