"The Man Whom Broke Ticketmaster" - Interesting Article

[Blooby]

The Man Who Broke Ticketmaster
Jason Koebler
Feb 10, 2017

The most infamous ticket scalper of all time used bots to buy millions of tickets. Now he wants to stop them.
In February 2005, after the band won its third Grammy of the night, U2 drummer Larry Mullen Jr. stepped to the microphone and made an announcement about the band's upcoming Vertigo tour: "Due to circumstances beyond our control, a lot of our long-suffering fans didn't get tickets," he said. "And I'd like to take this opportunity on behalf of the band to apologize for that."

There was a very specific reason die-hard fans couldn't buy tickets. Ken Lowson, the most successful and notorious ticket scalper in history, had bought nearly all of the 500 general admission tickets that were made available to the band's fan club for each show.

"When the sale dropped, we took 496 in New York, 492 in Boston, 496 in LA," Lowson, the former CEO of Wiseguy Tickets, told me in one of our many phone calls over the course of the last six months. "They apologized on the Grammys because of us, and then they had a second round of sales to make up for it. We took all the good tickets in that second round, too."

U2 is one of dozens of artists that has addressed the fact that their tickets weren't being sold directly to fans. For more than a decade, Wiseguy was the biggest name in ticket scalping. The company fundamentally broke Ticketmaster, using one of the first ever automated "ticket bots" to buy and flip millions of tickets between 1999 and Lowson's eventual arrest on wire fraud charges in 2010.

The scourge of ticket bots and the immorality of the shady ticket scalpers using them is conventional wisdom that's so ingrained in the public consciousness and so politically safe that a law to ban ticket bots passed both houses of Congress unanimously late last year, in part thanks to a high-profile public relations campaign spearheaded by Hamilton creator Lin-Manuel Miranda.

But no one actually involved in the ticket scalping industry thinks that banning bots will do much to slow down the secondary market. Seven years after his Los Angeles office was raided by shotgun-wielding FBI agents, Lowson told me he's switched teams. Now, he's out to expose the secrets of the ticket industry in a bid to make sure tickets are sold directly to their fans.

Any discussion about ticket scalping starts with bots, a mysterious scourge that people blame for buying up tickets.

A ticket bot is a computer program that automates the process of buying a ticket from Ticketmaster or another primary ticketing website. There are several different types of ticket bots, but the ones that anger Ticketmaster, politicians, fans, and artists are usually sophisticated pieces of software that can snag tickets the instant they go on sale by filling out Ticketmaster's dropdown prompts in a matter of milliseconds; it takes even a skilled human at least 10 seconds to get through the prompt. The most sophisticated bots can be programmed to make thousands of requests on Ticketmaster's servers using thousands of different IP addresses, giving bots another distinct advantage over humans. Once the tickets are successfully reserved, a human can then buy them.

What's missing from the public debate about bots and ticket scalping, however, is a nuanced understanding of how the primary and secondary ticket markets work, and how ticket brokers have a fundamental advantage at buying tickets than the average fan, bots or not. For many brokers, buying tickets is their livelihood, and they're far more obsessive and more motivated to get to tickets first. After all, how much time have you spent studying the underlying architecture and quirks of the Ticketmaster site, researching presale passwords, signing up for fan clubs, or enrolling in presale-specific credit cards?

I learned that scalping is hard work after a failed dalliance with the business in college. Six years later, I'm still paying off my credit card bills. Even highly automated ticket scalping operations require a massive time investment in researching shows that are likely to make money, managing inventory, and finding new ways to get tickets faster than the public.

As momentum was building for the anti-bots law, I began to get frustrated: I understood enough about the industry to know that banning bots wouldn't instantly solve the scalping problem, because the vast majority of brokers don't use bots (I certainly didn't). From my perspective, bots were a bogeyman, a simple narrative that could be used to cover up the highly complex and secretive world of how concert tickets are actually sold. Worst of all, none of the articles blaming bots ever explained how they worked.

And so I decided to track down one of the first inventors of bots. It turned out that after a few years of laying low after his arrest, Ken Lowson was ready to tell his story.

Ken Lowson is 47 years old; an aging rockstar of the industry who wants to solidify his place in ticket scalping history, but is still looking for his next hit. He's happy to talk about the old days, the strip clubs Wiseguy's employees would go to in Vegas after a particularly profitable day and the company bonus of a penis enlargement for its top salesman (no one took Lowson up on the offer). But these days he's obsessed with TIXFAN, a new venture that he says will help artists, venues, and sports team owners sell tickets directly to fans instead of scalpers.

What originally made Lowson good at buying and selling tickets is immediately clear when you talk to him. For one, he's an encyclopedia of ticketing knowledge, able to discuss scalping in the days of Roman gladiators and breeze through the slow evolution of ticket reselling from a local business to an international one. He remembers tiny details about specific concerts he sold tickets to and has memorized the seat maps of most of America's music venues. I asked him to send me a couple documents for the story and he sent me thousands of Wiseguy purchase orders, dozens of news clippings about the industry, and various Word documents with long, convincing rants he's written about why fans usually end up getting screwed.

Most importantly, he's just generally good at talking; I would regularly call up Lowson to clarify a small point for the article and 40 minutes later he'd still be explaining Ticketmaster's CAPTCHA system or the reasons why presales are built for scalpers, not fans. This gift for talking came in handy before Wiseguy was using bots, back in the early days when it bought tickets on the phone.

Founded in 1999, Wiseguy employed about a dozen ticket "pullers" to work Ticketmaster's phone lines, memorizing the quickest ways through automated phone trees and sweet talking the company's representatives into reserving tickets for them the second they went on sale. It worked like this: Lowson and his pullers, who worked in Wiseguy's cubicle farm in Las Vegas, would call Ticketmaster customer service a few minutes before a hot show went on sale (most sales happen at 10 AM local time).

A Wiseguy puller would push through the phone tree and ask a sales representative for assistance on something completely unrelated—maybe ask questions about when tickets from a previous order would be shipped. Because they called under the guise of getting help rather than buying tickets, customer service didn't kick them off the line for calling in too early, which was Ticketmaster protocol at the time. Then, just before 10 AM, the puller would say something to the effect of "Oh, by-the-way, would you mind reserving tickets for the Springsteen show when it goes on sale in 30 seconds?"

"I'd do three or four calls at once and time it out and I'd flirt with the reps. I'd say, 'I know the buttons you need to push to grab the tickets—F2, 10, return. Sometimes I'd get them to chant it. 'F2, 10, return, F2, 10, return,'" Lowson said. "Then I'd get center row two at Madison Square Garden for Springsteen. I'd buy a ticket for $80 and sell it for $700. The tickets were sold the same day, the profits were earned the same day. The money came right away."

Ticketmaster was already selling tickets online at this point, but Wiseguy didn't have success buying online at first even though it had invested in low-latency T1 internet connections for its pullers. The problem, Lowson realized, was that his people were slow. He began to look for a way to automate the process, and managed to find a 17-year-old Bulgarian on a programming forum who was up to the task.

That programmer built a few tools for Lowson's human programmers. Drop-down menus could be filled out automatically and pages could be refreshed automatically. The team kept iterating on the design, making small changes—such as switching from a Windows-based system to a Linux-based one—that improved its speed and effectiveness. As the programmer started learning more about Ticketmaster's site, he realized he could remove the human puller from the equation altogether.

"He kept saying 'I can do more,' but I kept holding him back because I was paranoid he'd start his own company," Lowson said. "Finally I took the training wheels off and told him to do it."

The last piece of the puzzle was Ticketmaster's anti-bot CAPTCHA system, which requires a human to type in crossed out or fuzzy words to prove he or she isn't a robot. Wiseguy learned that Ticketmaster's CAPTCHA system had only loaded 30,000 unique images into its database, rather than millions. So Lowson's team downloaded every image they could find as a .jpeg file, stayed up all night typing them out, and taught their bot how to match the images.

"Ticketmaster left it that way for years," Lowson said. "Once we realized the CAPTCHA database was static, we went to look at the seats we could pull, and bam!—I saw the best seats available for Springsteen. That's when we really knew we had something."

A quick legal and tech aside here: Whenever I talked about reporting this story with my friends, they always fixate on CAPTCHA. "Don't those squiggly words stop the bots?" they ask. The specifics of how Wiseguy beat CAPTCHA are important. Many anti-CAPTCHA bots use what's known as "Optical Character Recognition," or OCR, to bypass CAPTCHA. OCR is a type of machine vision in which the bot is trained to "see," recognize, and input the characters as a human does. After Lowson and his cofounders were arrested, the Department of Justice based much of its argument on the idea that Wiseguy had "hacked" CAPTCHA by using OCR.

Lowson and his lawyers vehemently deny using OCR. The distinction is important for both legal and practical reasons. The government argued that OCR-using bots would need to use Ticketmaster's source code to be implemented properly on the site, and would therefore be a "circumvention" of Ticketmaster's software. Therefore, under the Computer Fraud and Abuse Act it would be considered "hacking" and would thus be illegal. Practically, OCR is much slower than Lowson's matching solution, meaning his bot was faster and got better tickets than his competitors' bots.

"What was done here was simple, almost like the kids memory game of match. The computer program matches in a .jpeg database that was created by a number of individuals here," Lowson's lawyer argued at his hearing. "CAPTCHA was not hacked. It was responded to. It was responded to by a computer ... the computer acted as an individual and answered the CAPTCHA response correctly, which allowed them—the computer, to then go to the buy page to order tickets."

Lowson and his partners were facing 42 counts of wire fraud, with each count carrying a penalty of up to 20 years in prison. They were also facing another count of conspiracy to commit wire fraud and gain unauthorized access to computer systems, which carried a possible five year prison term. The distinction of whether Wiseguy's system was "hacking" CAPTCHA or merely answering it, was vitally important to Lowson's case.

The CAPTCHA-matching solution was highly successful: "Instead of having one person looking at each page pulling, all of a sudden we could look at 200 sets of seats on one screen," Lowson said. "I was able to fire everybody and pull ten times more tickets."

Wiseguy quickly hired back many of his pullers after realizing that, while humans wouldn't be necessary to pull the tickets, they'd be needed to manage all the inventory the company was bringing in, deal with customers, and research upcoming shows.

The company realized connection bandwidth and latency were the most important factors in getting tickets quickly. Wiseguy leased dozens of servers and thousands of IP addresses all over the country after realizing that some connections were able to get into a sale slightly earlier than others. At the height of its operation, the company was spending between $500 and $800 per month on each server.

"We had 30 servers in different states all over the place, and one or two servers would always get in early," Lowson said.

Because the FBI confiscated all of Wiseguy's computer equipment, Lowson wasn't able to pull up screenshots of how it worked (and they are not in court records either), but he did describe it to me. Each day, Wiseguy employees would spend hours researching shows that seemed likely to be profitable and, before they left each night, would program the bot using a graphic user interface they called "The Extractor" to search for tickets when those shows went on sale. When the shows went on sale, the bot would return a list of tickets it had reserved—a mix of of two-, three-, and four-packs of seats next to each other—and Lowson or another Wiseguy employee would use checkboxes on the program to throw back the ones that they didn't want.

"We pulled so many tickets that really we had to choose which seats we didn't want," he said.

Wiseguy began to completely dominate the ticket market. When tickets for the 2006 Rose Bowl National Championship game went on sale, Wiseguy bought almost all of the tickets offered to the public. The company's purchase reports show it bought the best tickets for AC/DC's reunion tour, Elton John, Paul McCartney, Lady Gaga, playoff sports games, Wicked on Broadway, and most likely any show you wanted to go to in the mid 2000s that you weren't able to get tickets to.

"We'd buy all the good seats so quickly the fans would have to buy our leftovers and throwbacks," Blake Collins, who worked for Wiseguy for nearly a decade, said.

The scale of Wiseguy's dominance is mind boggling. The company became an additional middleman in the often circuitous trip a ticket took between Ticketmaster and the fan. For example: I checked the Wiseguy's purchase report for a Jimmy Buffett concert at the Tweeter Center (now Xfinity Center) in suburban Boston on June 20, 2005. It spent more than $120,000 on 1,300 tickets located in nearly every section and every row of the venue, which has a total capacity of 19,900.

This type of purchasing wasn't particularly unusual.

"We made a decision early on to be the best ticket buyers, not necessarily the best ticket scalpers," Lowson said. Rather than deal with individual fans, Lowson sold directly to independent ticket brokers, who then sold the tickets to fans on StubHub, or other online or brick-and-mortar ticket marketplaces. By doing this, the company completely eliminated inventory risk—the tickets were usually sold before Wiseguy even bought them, and the company had a rule that every single ticket they had bought on any given day had to be sold before anyone could go home for the night.

The bot was so good that brokers further down the food chain would put in orders for specific seats with Wiseguy before Ticketmaster had even put them on sale.

Wiseguy served as the main source of a valuable commodity to a network of hungry dealers who were forced to play by Lowson's rules. Wiseguy's slogan was "making offers you can't refuse," and that quite literally became the case.

"Each client of mine would send me 30 to 40 credit cards, and we could buy as many tickets as we wanted on them," Lowson said. "We eventually stopped letting them tell us how much to buy. We told them what tickets they had to buy from us and told them how much they were going to pay us."

This invoice, for example, shows that Wiseguy charged a client $20 or $30 "overs" per ticket for a Shania Twain concert. This "over" is the amount that the client owed in addition to the original price of the ticket, which Wiseguy had purchased using the client's credit cards.

Because it was a wholesale operation, Wiseguy often took just a small markup on tickets that would eventually be sold on the secondary market for much higher margins.

Between 2001 and 2010, the company bought and resold roughly 1.5 million tickets, amassing more than $25 million in profits overall, according to the FBI's indictment. On the 2005 U2 tour alone, it made more than $2.5 million, Lowson told me. At the height of its power, Wiseguy employed close to 30 people.

"We went to ticket broker conferences, and we were the rock stars there," Collins told me. "Everyone wanted to take us to the strip club or take us out for dinner. It was ridiculous how powerful we were."

Lowson plastered the wall of the Wiseguy offices with No. 1 copies of classic comic books. He and five friends flirted with the idea of buying Dracula's castle in Transylvania and turning it into an adult theme park, which may have been something of a pipe dream.

Those days were filled with visions of grandeur. When Ticketmaster introduced "paperless" tickets—an anti-scalper move that requires the fan to present the credit card used to purchased the ticket to gain entry to a show—Lowson considered opening a bank in the Cayman Island to issue his own disposable credit cards.

"Really, though, I wanted to be the biggest collector of $100 bills," Lowson said.

In the ticket industry, he was. Until it blew up.

If you've ever tried to buy a concert ticket the second it goes on sale only to find it's immediately sold out, it's impossible, probably, to read about the success Wiseguy had and not feel as though bots, scalpers, and people like Ken Lowson have been screwing you for decades. This isn't an entirely unreasonable feeling, but it's definitely not the whole story. Bots are a problem and have been a problem since the advent of online ticket sales. But bots aren't the only reason you have trouble buying tickets to popular shows, and more importantly, they also probably aren't the main reason why you can't buy a ticket.

Bots have served the function of being an easy, morally simple scapegoat for Ticketmaster, lawmakers, artists, promoters, and venues to cover up more serious problems with the way tickets are sold to fans.

Last year, the New York Attorney General's office released the most comprehensive government report ever issued on the ticketing industry. The report revealed to the public what many ticket brokers already knew: The game is rigged.

"Bots are a piece of the problem, but not the whole problem," a spokesperson at the NY Attorney General's office told me. "It's one piece of the puzzle, but a lot of the industry operates in nakedly improper ways."

[Blooby]

Part II

Most tickets for the most popular shows are never made available to the public
The NY Attorney General's report determined that "the majority of tickets for the most popular concerts are not reserved for the general public." Instead, some are sold in presales, which—bots or not—favor brokers because they have access to databases of passwords and access to all credit card-specific presales. Others are put on "hold" for promoters, advertisers, radio stations, venues, VIP packages, and corporate sponsors, or sold directly to scalpers by venues themselves.

When tickets go on "public sale," an average of only 46 percent of tickets go on sale to the public, according to the report. For more popular events, the percentage can be much higher. It's rare for the public to see ticket charts that venues and promoters are privy to, but in 2009, a seating chart for Taylor Swift's concert at Nashville's Bridgestone Arena became public: 11,720 of the 13,330 seats in the venue were accounted for before the "public sale."

"The most common way ticket brokers get tickets these days is from the artist or venue itself," said Don Vaccaro, the CEO of TicketNetwork, which helps brokers sell tickets. "A very common practice is to make a broker buy a block of tickets for a weekday or lesser event and, in exchange, they can buy tickets for a hot event."

Lowson and others have called for Ticketmaster to be more transparent about how many tickets are being sold in each presale and public sale, but the company says this would make scalping worse.

"Knowing the number of tickets on sale gives scalpers a road map for deciding how many tickets to buy, and how to price the tickets," Jody Mulkey, Ticketmaster's Chief Technology Officer for North America, told me in an email.

Historically, Ticketmaster's stated ticket limits have been rarely enforced and are easily circumvented
Ticketmaster has a "ticket limit" for almost every show it puts on sale, which is ostensibly designed to stop scalpers from buying a ton of tickets. Careful scalpers easily circumvent this by using multiple credit cards with multiple addresses. Most don't even worry about it, because Ticketmaster usually doesn't cancel tickets that have already been sold. Lowson told me he always ignored ticket limits and only had tickets cancelled by the Allman Brothers. Ticketmaster disputes this claim and says it regularly and strictly cancels tickets.

The NY Attorney General noted that historically, tickets have only been canceled if artists request a special audit after tickets go on sale. "A sophisticated representative of several top artists playing the largest arenas told NYAG they had been unaware that Ticketmaster required a separate auditing request to enforce limits the artist had already requested, and had therefore never made such a request."

Additionally, every ticket broker has multiple credit cards with multiple addresses, meaning they appear to be different people and can buy more tickets than the limit states.

Scalpers have an information and tech advantage
An invite-only website called ShowsOnSale provides its members with an exhaustive list of every presale (and presale password) and public sale in the world, which is pulled from signing up for thousands of venue and artist mailing lists and signing up for specific credit cards.

This means that scalpers can and do buy in every presale that's supposedly meant for fans, and the average scalper probably knows about more presale opportunities than a casual fan does.

A ShowsOnSale subscription costs $120 per month and is one of a suite of companies that offer information and tools for brokers. Other websites offer "drop checkers," which constantly ping Ticketmaster's servers after a show has already sold out to see if additional tickets are released, specialized browsers that create new "sessions" for each tab, meaning that a broker can make multiple Ticketmaster requests within a single browser, and inventory management software that can automatically list tickets to StubHub or can check ticket prices across dozens of online secondary markets, which sets up potential arbitrage opportunities (buy low on one market, sell high on another).

Tickets are incorrectly priced, which incentivizes scalping
If there's a reliably profitable secondary market for tickets, that means tickets are being priced too inexpensively by the artist. Pricing tickets too low is an understandable decision for an artist to make, because obviously no one wants to play to an empty venue and no artist wants to be seen as greedily extracting as much money as possible from fans. When face value ticket prices increase, scalpers generally respond by sitting sales out, meaning less competition for fans during public onsales.

"There's an emotional aspect to what artists do, which is to say 'I'm not willing to charge $500 even though clearly the market value is $500. I'm going to charge $100, and at the end of the day someone else is going to make that money,'" Rich Holtzman, head of StubHub's music business development, told me. "The marketplace will always exist as long as artists won't increase their ticket prices."

Ticketmaster takes this view, as well: "What drives the secondary market and creates the motivation for scalpers to use bad acting bots is the enormity of the pricing gap between the face value and market value of a ticket," Ticketmaster's Mulkey said.

Tickets can generally be bought by anyone from anywhere in the world
Big time brokers look down on so-called "beer money brokers" and "soccer moms" who casually scalp tickets to major events that are nearly certain to be profitable. When I was scalping tickets, for instance, any ticket to a Taylor Swift concert anywhere in the country was bound to let me double my money, and so I, a college kid living in Maryland, would wake up on a Saturday morning and buy tickets in New York, Philadelphia, New York, and Boston before I left my bed. Then I'd take a shower, buy tickets in Chicago, Houston, Dallas, and Kansas City. Eat breakfast, buy tickets in Denver, Los Angeles, and Seattle. By lunch, I may have already had 40 tickets.

"The biggest issue why fans can't get tickets is not bots or even because there are professional scalpers involved," Dean Budnick, coauthor of Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped, told me. "There are just so many amateurs who can buy from anywhere in the world and flip them on StubHub a few minutes later."

It would be possible for Ticketmaster to implement regional buying restrictions tied to a consumer's credit card billing address, and it does this on very rare occasions. For instance, when I was buying tickets, you had to live in the general Cleveland area to buy Cleveland Cavaliers season tickets. Ticketmaster says such decisions are up to the venues and artists. But it would at least theoretically possible to identify scalpers and prevent them from buying tickets using a person's purchase history; if a customer is buying hundreds of tickets to shows all over the country, they are likely a scalper.

The primary point of sale is becoming more confusing
Stubhub, which dominates the secondary ticketing market, has started making deals with artists such as Jennifer Lopez to sell some premium seats directly on its platform. This "blended marketplace," as StubHub calls it, means that the primary and secondary market will exist side by side. There are upshots to this: If a fan is able to see all tickets that are on sale for any event at any time, they can make a more informed decision about what to buy.

StubHub's Holtzman told me that such schemes allow artists more control over the price of their tickets. "I don't know of a lot of artists that sell directly on us, but I think they should," he said. The flip side of this is that fans will have a harder time determining what is a "face value" ticket is or where and when it actually goes on sale.

Bots are still a problem
The NY Attorney General's office makes clear that bots are still exerting pressure on the primary ticket market. A spokesperson at the agency told me that the office believes many brokers use ineffective, off-the-shelf software that can be bought for a few thousand dollars, but big time brokers program their own bespoke bot solutions, as Wiseguy did.

"The sophisticated and successful ones are constantly revising their bot software, waiting for Ticketmaster to make changes and changing with them," the spokesperson said.

When Congress passed the law banning bots, many of my friends cheered, thinking that it would suddenly be easier to get tickets. That hasn't been the case. A Dallas Observer article from last month notes that the "bill designed to prevent bots from buying up concert tickets didn't help U2 fans," who once again found it difficult to get tickets to the band's new tour. This is in part because of the reasons I've listed, but it's also because there's nothing stopping a bot-using broker from moving their operation overseas, where US laws are harder to enforce.

Ticketmaster agrees that anti-bot legislation isn't likely to greatly change bot activity. The company said it blocked 5 billion bot attempts in 2015, and that bot activity increased 10 percent between 2015 and 2016.

"Legislative efforts are effective in raising awareness, but there must be stronger criminal penalties and civil fines to disincentive those who profit from bots," Mulkey said. "The battle against bots is constantly changing."

'Paperless' tickets help stop scalpers but can be circumvented
So-called "paperless" tickets are an antiscalping measure that requires the purchasing credit card to be presented at the venue on the night of the concert. This requirement makes scalpers' lives much harder but is regularly circumvented by the most serious operations. Wiseguy, for instance, told its wholesalers to ask their customers for their credit cards before a sale happened. Wiseguy then used its bot to buy paperless tickets directly on fans' credit cards.

Because paperless tickets weed out casual scalpers, operations that are able to bypass the requirement are usually able to make more profits because there is less competition on the secondary market.

The concert industry relies on scalpers to buy tickets
After the anti-bot law was passed, brokers on the ShowsOnSale forum cheered. Brokers who don't use bots hate the "BotBoys" who do, and brokers who hire human ticket pullers or pull tickets themselves hate that scalpers are automatically assumed by the public to be using bots.

While many shows are profitable for scalpers, a lot of them aren't. I learned that the hard way, buying thousands of dollars of Nick Jonas tickets in 2010. Very few of the shows sold out, and I had to sell the tickets for pennies on the dollar. On any given day, you can check StubHub and, hours before almost all but the most popular events, you can find tickets for at or below face value. Many of these tickets were bought by scalpers, who are trying to ditch them at the last minute. The fact is scalpers buy millions of tickets every year, and Ticketmaster gets fees from every ticket sold, and StubHub gets money from every ticket bought and sold on its site. Ticketmaster wants to stop the most egregious uses of bots, but if it killed scalping altogether, it would adversely affect its business.

"Ticketmaster's job is to sell tickets," Budnick said . "They want to sell as many tickets as they can, and if they want to sell to thousands of people who are going to resell them, they have a right to do that. That's what the laws are."

Ticketmaster, for its part, says that it has a data science team of dozens of people working around the world dedicated to stopping bots.

"At a top level, we see bots still as a real and serious issue," a Ticketmaster spokesperson told me. "We are successful at fighting them every day, but it's an arms race."

Ticketmaster's site is much different today than it was when Lowson was buying tickets, and the company says that the level of sophistication it's fighting has increased dramatically.

"Over the last decade, and especially the last few years, we've made significant investments in both our technology and our team to be the best at aggressively blocking bots and all bad actors," Mulkey said. "Scalpers and bots impact the playing field. Even though ticket scalping has always existed it has evolved over the years with the advancement of technology, and that makes fighting bots even harder."

Ticketmaster sees the frustration of ticket buying as a fundamental problem with both supply and demand and a pricing gap: "There are more people who want to go to a show than there are tickets available," a company spokesperson said. "For example the 2015 Adele onsale, there were about 10 million people lining up to get tickets and we only had a little over 400,000 tickets. There's a big difference there and we're sensitive to the emotions behind these on sales for passionate fans."

"Fans do get tickets," the company added. "We work tirelessly in partnership with artists to get tickets into the hands of real, verified fans. That is our mission at Ticketmaster and everything we do is with that goal in mind."

In March 2010, armed FBI agents kicked down the doors of Wiseguy's Los Angeles office. Wiseguy had taken over the office from AIG, which faced a flurry of legal problems around that time.

"The first thing Ken said was, 'We're not AIG,'" Collins said. "We were a bunch of dorks at computers with toys and stuff at our desks. We didn't think we were doing anything illegal. We never did anything illegal, ever."

When Lowson was arrested, ticket bots hadn't been made illegal yet. But Wiseguy had gotten so large that the FBI used the Computer Fraud and Abuse Act, a catch-all hacking law, to go after the company. The feds sought to make an example of Wiseguy, slapping 42 separate wire fraud charges on Lowson and two colleagues, which carried a maximum penalty of 20 years in prison for each count. The government's case hinged mostly on whether Wiseguy had "circumvented" Ticketmaster's system. If it had, Wiseguy would be guilty under the CFAA. If it hadn't, and Wiseguy's bot was more like a very fast human in the steps it took to buy tickets, then there was no case. Much of the argument hinged on how Wiseguy solved CAPTCHA. Ultimately, Lowson and his colleagues took a plea deal that dropped all of the wire fraud charges and took a single charge of conspiracy to commit wire fraud charge. They got off with probation. Lowson spent most of his money from Wiseguy defending himself.

"What Ken did was extraordinary, the scale of it," Budnick, coauthor of Ticket Masters said. "They mystified people in that they were so bold about it. They lived large, like the way people imagined criminal gangsters on TV and films. When it came time for trial, there were a lot of people who supported and said what they were doing was legal. I think the clean way out for everyone was just to have the plea and put the whole thing to bed."

The intervening years haven't been great for Lowson. Soon after his arrest, his brother was killed by a drunk driver. Lowson got divorced and fought drug addiction and alcoholism for the early part of the decade. He rarely speaks to most of the people who helped him build Wiseguy; he says the federal investigation spooked most of the crew. A year spent in India mellowed him out and sobered him up. For the last year, he's been planning his comeback.

He doesn't apologize for running Wiseguy, and he doesn't think that ticket scalping is inherently immoral. In fact, he got into it because the secondary ticket market is one of the freest markets in American capitalism.

"Before this, I was selling workman's comp insurance, which felt like such a dishonest industry," Lowson said. "With tickets, you might not like the number you pay, but you're getting the exact seat, the exact section—you're getting exactly what you bought from me, and there's no grayness. I felt like it was really straight up."

Lowson says he's uniquely placed to fix the ticket buying experience. Many of the revelations about the ticket industry I've highlighted were discovered in part because Wiseguy's ticket bot was so much better than its competitors that he got a better picture of what was actually going on sale to the public than any other person outside of the primary ticketing industry.

The bot taught him that the tickets the public thought were going on sale often weren't. Often, the best tickets weren't put on sale at all, or only certain sections went on sale, with the rest held back for corporate sponsors, radio stations, VIP packages, or other "holds." Presales meant for fans disproportionately benefit scalpers.

Because ticket scalpers can buy tickets for any show and are better at buying tickets than fans, the main problem is not banning bots; it's making sure that the opportunity to buy face-value tickets are targeted directly to fans and not at scalpers. Lowson says bands, sports teams, and Ticketmaster can't continue to decry scalping while continuing to cut backroom deals that only help scalpers.

"The game is rigged, and this secrecy can't survive in a WikiLeaks world," he said. His new venture, TIXFAN, is a consultancy firm that will work directly with teams and artists to plug the holes he exploited. Published ticket limits will be enforced. Presales will be microtargeted at specific groups in hopes of keeping scalpers out, and tickets won't be sold to known scalpers.

"I have hundreds of ideas," Lowson said. "And now that bots have been made illegal, I've become a hot commodity. It sounds good, right? 'We hired the ticket bot king to work for us to make sure the other ticket bots aren't taking tickets from the fans.'"

Lowson says once his case was made public, dozens of copycat brokers started making and commissioning their own bots. He says he's ready to fight for the fans by airing out the industry's dirty laundry to the artists and teams who want to make sure their fans get tickets—and build a company that has even more influence than Wiseguy did.

"You think I give a **** if scalpers lose $10 billion to make a billion for myself?" Lowson said. "If I do that, the fans save $9 billion, right?"