For years, critics of the secondary ticketing industry (including us) have warned about the dangers of speculative ticket sales, hidden fees, and platforms that profit whether fans ultimately get through the gate or not. Those warnings were often dismissed as the complaints of disgruntled consumers.

The FIFA World Cup ticket controversy suggests those critics may have been right all along. As reported in Business Insider:

Countless World Cup fans are discovering that their tickets have gone poof, and they’re left scrambling to decide whether to buy new, pricier ones or simply give up on their World Cup dreams. They’re asking themselves how this could happen, since many people don’t realize it’s even a possibility.

The answer lies in the peculiar structure of secondary ticket marketplaces. Sites such as StubHub don’t actually sell tickets, much like eBay or Facebook Marketplace, they just connect buyers and sellers. This setup relies on sellers to come through with the tickets they say they have, essentially rendering it an honor system. Companies often don’t require sellers to upload their tickets immediately or provide proof of purchase. Many platforms give sellers until the day of the event to hand over the tickets.

It’s impossible to know the explanation for each individual situation, but one potential culprit is speculative ticketing, which I coined “ghost ticketing” last year. In these scenarios, resellers list tickets on StubHub or SeatGeek that they don’t yet have, hoping they’ll eventually secure them (for a lower price than they offered) and send them along.

FIFA warns fans about such practices:

You can transfer your tickets using the Ticket Transfer feature on the FIFA Resale/Exchange Marketplace. The marketplace is accessible via FIFA.com/tickets.

Please note: Transferring tickets to third-party platforms or accounts is discouraged as it may result in issues, including the inability to cancel or accept transfers. To ensure a secure and valid transfer process, please use the Ticket Transfer feature between FIFA accounts.

Fans reportedly purchased World Cup tickets through StubHub, booked flights, hotels, and vacations around those purchases, only to discover that tickets never arrived, could not be transferred, or could not be honored. In many cases, the offered remedy was a refund.

Business Insider reports that:

A SeatGeek spokesperson said in an email that [a fan’s] letdown “fell short” of the experience the company aims to provide and said they’d apologized to him and were working on a resolution. “We continue to invest significant resources in monitoring World Cup orders and supporting fans attending matches,” they said.

But a refund is not a remedy when the one-time event is over. An “apology” maybe very Internet (“we said we were sorry [for fill in the blank obvious scummy and shady behavior]”) but it ain’t going to cut it.

A World Cup match is not a toaster. Consumers are not merely purchasing a product; they are purchasing an experience tied to a specific place and time. Once the match is over, no amount of reimbursement can recreate the opportunity, no apologies will make the fan whole.

The deeper problem is that these incidents expose the fundamental flaw in speculative ticketing. In many cases, tickets appear—to be more fair than they deserve— to have been offered for sale before sellers possessed transferable inventory or before they could demonstrate a present ability to deliver what they were selling. Consumers were effectively asked to assume the risk that the ticket would eventually materialize. This kind of thing is often called “fraud” in the trade.

Imagine a securities market where brokers could freely sell commodities they did not possess and buyers discovered on settlement day that the shares or options never existed. Regulators would never tolerate such a system. Yet in secondary ticketing markets, similar concerns have persisted for years and nobody has gone to jail.

Longtime critics of the speculative ticketing industry may experience a sense of déjà vu.

As recently as 2024, plaintiffs in Kaiser v. StubHub advanced allegations that sound remarkably familiar: tickets to Hotspurs game allegedly offered for sale that sellers did not possess, consumers induced to purchase based on representations about availability, and a platform collecting fees while bearing relatively little delivery risk. The complaint included civil RICO allegations before being referred to arbitration, meaning many of the underlying claims were ruled on in private (secret) arbitration and never tested through a public merits determination.

The significance of Kaiser is not whether every allegation was ultimately proven. The significance is that the core complaints sound strikingly similar to those now emerging from the FIFA World Cup controversy. If the allegations prove accurate, critics will understandably ask why the same concerns appear to be resurfacing only two years later on a much larger stage.

Another uncomfortable question concerns StubHub’s longstanding reliance on mandatory arbitration clauses and class-action waivers contained in its consumer terms of service. Historically, those provisions have helped channel disputes into private proceedings, limiting public discovery and reducing the risk of large-scale class litigation. Indeed, in Kaiser, the court referred even the plaintiffs’ civil RICO claims to arbitration—a result that many consumer advocates viewed as troubling public policy because allegations involving potentially systemic marketplace practices were removed from public judicial scrutiny.

It must be said that StubHub is hardly alone in trying to stretch consumer arbitration provisions beyond what most consumers would reasonably expect. Disney drew national criticism when it initially sought to invoke a Disney+ arbitration clause in a wrongful-death case arising from an allergic-reaction death at Disney Springs. The Happiest Place on Earth later backed down, but the episode illustrates the same broader problem: companies increasingly treat arbitration clauses as all-purpose liability shields, even when the dispute bears little resemblance to the ordinary consumer transaction that supposedly created consent.

The FIFA controversy may test the limits of that strategy. When alleged consumer harm spans multiple countries, major sporting events, and potentially thousands of affected purchasers, the practical, political, and regulatory pressures become much harder to contain through private arbitration. More importantly, arbitration clauses do not bind government regulators. A consumer may be forced into arbitration, but the FTC is not. Nor are state attorneys general, foreign regulators, or other enforcement authorities. In that sense, arbitration may reduce private litigation exposure, but it provides little protection against the type of regulatory scrutiny that often follows high-profile consumer failures.

The larger the FIFA controversy becomes, the less likely it is that StubHub can resolve it behind closed doors. Plus, it makes America look bad and we can think of at least one person who might get really pissed about that.

The FIFA controversy is also notable because the underlying conduct is not universally accepted as a legitimate market practice. In the United Kingdom, the unauthorized resale of football tickets is heavily restricted and, in many circumstances, prohibited outside approved channels established by clubs and governing bodies. That issue surfaced in Kaiser, where plaintiffs alleged sales occurring outside authorized distribution systems and when the plaintiff showed up at Hotspurs World, it became apparent that the plaintiff was the only one not in on the joke. In other words, at least some jurisdictions have already concluded that unrestricted secondary-market sales of football tickets create risks significant enough to warrant legal restrictions.

The timing could hardly be worse for StubHub.

The company recently resolved an FTC enforcement action involving allegedly deceptive pricing practices and so-called “junk fees.” The FTC accused StubHub of using drip-pricing tactics that advertised one price while revealing mandatory fees later in the purchasing process. The resulting settlement required changes to pricing disclosures and a $10 million payment.

But hidden fees were only part of the story.

The FTC’s broader rulemaking record also discussed speculative ticketing as a potentially deceptive practice under the same rule. In fact, commenters specifically raised concerns that platforms were facilitating the sale of tickets that sellers did not actually possess or could not yet transfer. The Commission cited those concerns in its rulemaking discussion, recognizing that speculative ticketing may present consumer-protection issues distinct from hidden fees alone. Numerous states have outlawed speculative ticketing outright, concluding that selling tickets you do not possess is not innovation—it’s such serious consumer harm they outlaw the practice.

That point deserves emphasis. Critics of speculative ticketing were not simply complaining on social media or filing isolated lawsuits. They participated in the federal rulemaking process itself. The concerns raised in litigation such as Kaiser and in comments submitted to the FTC were sufficiently significant that the Commission expressly addressed them when adopting its junk-fee framework. The FIFA controversy therefore does not emerge from nowhere. It arrives against a backdrop of years of consumer complaints, litigation, regulatory comments, and public warnings that the industry has largely resisted.

If a platform represents inventory as available when the seller lacks the present ability to transfer or deliver it, the issue extends beyond pricing disclosures and into the integrity of the marketplace itself. That distinction is significant because it supports expansion of available legal prosecutions.

A civil RICO plaintiff would likely argue that repeated electronic communications marketing unavailable or non-transferable tickets constitute a pattern of wire fraud. And that puts you squarely in racketeering land. Whether such a claim could succeed would depend heavily on evidence of knowledge, intent, and the scale of the conduct. But the FIFA controversy inevitably invites the question raised in Kaiser: at what point does a recurring business practice stop looking like isolated misconduct and start looking systemic?

No one should assume that a criminal RICO case is around the corner. Federal prosecutors would need far stronger evidence and proof of knowing participation in criminal conduct. Yet once allegations involve recurring speculative inventory, consumer deception, electronic communications, and a potentially nationwide pattern of conduct, the discussion inevitably broadens from customer service to compliance and governance. The FTC has been partway down this path before with StubHub—while FTC can’t bring a criminal prosecution, it’s a short stop to a Department of Justice referral, Especially if you know who gets involved.

And that is what makes this episode different.

For years, StubHub could treat these controversies as disputes with unhappy customers. Today, StubHub is a public company. It has benefited from access to public capital markets and the confidence of public investors. With that status comes heightened expectations regarding compliance systems, risk management, internal controls, and regulatory oversight.

Angry fans are one thing. Invited guests in our country are another thing entirely, as are regulators, institutional investors, securities lawyers, and the SEC.

The problem for StubHub is not merely that critics predicted these issues. The problem is that critics raised them in court, raised them before federal regulators, and saw those concerns acknowledged in the FTC’s own rulemaking record—yet the complaints continue to surface.

The problem for StubHub is not that critics are saying something new. The problem is that critics appear to be saying the same thing they were saying in Kaiser—only now the whole world is watching.

If the FIFA complaints ultimately prove as widespread as it appears, investors may begin asking uncomfortable questions that go well beyond customer service. Is speculative ticketing a disclosed business risk? Is it primarily a compliance problem? Or is it so deeply embedded in the economics of the marketplace that meaningful reform would materially affect revenue and growth? And, as they say, “have a materially adverse affect on StubHub’s business.”

Those are not questions typically asked by disappointed fans on social media. They are the kinds of questions asked by regulators, analysts, institutional investors, auditors, and securities lawyers.

The secondary ticketing industry has spent years arguing that it provides efficiency and liquidity. Governor Polis defended the practices as an “innovative online ticket waiting service” (yes, he really said that). The FIFA fiasco suggests something different: a system that privatizes gains, socializes risk, and too often leaves consumers holding the bag.

For a public company operating under the gaze of both the FTC and the SEC, that should no longer be good enough.

Because the real risk for StubHub may not be the next user lawsuit, the next consumer arbitration demand, or even the next FTC inquiry. The real risk is that investors begin to conclude that what defenders have long described as isolated incidents are, in fact, permanent features of the unsavory business model itself.