South Korea’s tax authority has opened investigations into 17 ticket scalpers, targeting businesses and individuals who authorities say have concealed a combined 20 billion South Korean won (approx. USD $13.8 million) in income from secondary market sales
The National Tax Service (NTS) announced the probe on Thursday (November 6), marking the agency’s response to a secondary ticketing market where 400 entities, representing the top 1% of sellers on major ticketing platforms, control nearly half of all transactions.
The measure is part of Commissioner Lim Kwang-hyun’s crackdown on tax evasion that “harms the people’s daily lives,” according to to a translated text of the NTS’s notice, which you can read here.
The investigation targets include private school teachers, public institution employees and organized businesses. Their average annual transaction volume reaches 67 million won ($46,000) per person, exceeding typical starting salaries for college graduates in South Korea, according to the NTS.
The tax service identified scalpers reselling through online platforms and secondhand communities secured over 40,000 tickets across several years, marking up prices by as much as 30 times face value. Some concealed transaction volumes by deleting sales posts without marking items sold on platforms.
Proxy ticketing services, known locally as “Dalty,” purchase tickets on behalf of buyers for commission fees. Some operators underreported income while claiming small business tax breaks and driving expensive foreign cars. Others split income across borrowed-name accounts or invested proceeds in stocks worth “hundreds of millions of won,” the tax agency said.
The NTS also identified sellers of macro programs, or automated software that gives users advantages in online ticket queues. One investigation subject allegedly sold these programs since the mid-2010s, processing “thousands of sales” through fake accounts without reporting income.
The other form of ticket scalpers flagged by the NTS are those that sell direct booking links that bypass online queues.
The agency detailed specific cases in its notice. One scalper resold concert tickets for 2.4 million won ($1,650), 15 times the regular price, and baseball game tickets for 2 million won ($1,380), up from 100,000 won ($69) face value. Despite underreporting profits, the individual accumulated 800 million won ($551m) in deposits and real estate, the NTS alleged.
“Given the scale and urgency of the issue’s impact on the public, we will thoroughly examine the resellers’ earnings, cash flow and hidden assets.”
Ahn Deok-Soo, South Korea’s National Tax Service
Another investigation focuses on a proxy ticketing operation called EEE that secured tickets for ballad and trot singer performances, musicals, e-sports and volleyball matches. The service charged 100,000 won success fees per transaction and purchased about 1,200 tickets over six months using macro programs and over 10 user accounts to circumvent per-person purchase limits.
EEE provided payment details through one-on-one chat platforms, collecting cash without reporting income. The operator allegedly acquired 1.2 billion won ($826,000) in stocks using “hidden income.”
The NTS said it will use financial tracking and Financial Intelligence Unit data to verify cash transactions and collect owed taxes.
Ahn Deok-soo, head of the investigation bureau at NTS, told local media: “Given the scale and urgency of the issue’s impact on the public, we will thoroughly examine the resellers’ earnings, cash flow and hidden assets.”
Overseas in the US, regulators have also clamped down on ticket scalpers in the live events space. The US Federal Trade Commission in August sued Key Investment Group LLC, a Maryland-based ticket brokering operation, alleging it used illegal tactics to circumvent ticket purchase limits and resell hundreds of thousands of tickets at inflated prices, including for Taylor Swift’s blockbuster Eras Tour.
The FTC has also sued Live Nation and its ticketing arm, Ticketmaster, accusing the company in September of profiting from scalpers operating on its platform. Live Nation has denied this accusation last month, and committed to making changes to its ticket resale platform to assuage consumers’ concerns.
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