coindesk.com
Whether it be scalping, fraudulent tickets or illicit reselling, the legacy ticketing system has its fair share of issues. This is hardly surprising from an industry that has scarcely innovated beyond digital barcodes over the past decade.
This op-ed is part of CoinDesk's "Sports Week."
Offering the potential for change through verifiable and authenticable tickets, non-fungible tokens (NFTs) can remap the current landscape for sports events, providing secure and efficient entry to events and adding value for loyal fans.
The state of the ticketing industry
In May, chaos ensued at the UEFA Champions League Final in Paris, with claims of fraudulent tickets causing massive delays and bottlenecks at security checkpoints – resulting in clashes between fans and authorities. The event has since put a spotlight on conventional ticketing issues, with many pushing for digitization, with blockchain-powered NFT ticketing touted as the solution.
Using this system, tickets can be purchased online but only issued via SMS after the purchaser has proven their identity and been given access to a “holding” area when arriving at the venue. The NFT tickets contain an unfalsifiable and unique QR code that can be used to gain access to the event – keeping out unauthorized individuals and streamlining the experience for legitimate customers.
With pilots having already rolled out across the music industry via companies such as YellowHeart, NFT ticketing is now starting to garner the attention of the sporting world. For example, Michel Cadot, the French government’s Olympics envoy, has submitted a 30-page report to the prime minister’s office recommending the implementation of blockchain-powered ticketing for the 2024 Paris Olympic Games. Other events, such as the 2023 Rugby World Cup, are similarly evaluating the benefits of this new system.
Why NFTs?
This technology is an obvious fit because it offers complete veracity of the tickets' authenticity. NFTs can’t be forged, thanks to the immutable nature of the blockchains they are built on top of. A quick check of a cryptographic hash can separate the real thing from a fake in seconds, and the complete history of the ticket is recorded from the moment it is minted all the way through sale and redemption.
Read More: Sports NFTs: How to Get in the Game
This makes it significantly less likely that a scammer could gain access to falsified documents, and consumers can even have an easy way to check if the tickets they are buying are considered legitimate before handing over any money. This stands to be a significant boon for both consumer protection and industry revenue. Less fraud means more money in the pockets of artists, promoters, organizers and so on.
A shift into NFT ticketing would be a considerable blow to scammers and a major win for the industry. But this is hardly the only benefit of this innovation. The truth is that NFT technology is positioned to bring a variety of new opportunities to the ticketing and entertainment industries.
Bringing more to fans
With this technology, the door would be open for venues and leagues to work together to begin offering things like “dynamic tickets.” These could be digital passes that update as they are redeemed and offer additional bonuses such as airdrops of additional NFTs, access to exclusive merchandise, or free vouchers for food and beverages. Tickets could stay with individuals across multiple events, and continued engagement could bring in even larger rewards, including upgraded seats or personal meet and greets. There’s almost no end to what NFT tickets can do, and all of this is protected by the unfalsifiable nature of blockchain.
For example, the NBA is looking into issuing NFT “ticket stubs” to fans when they redeem their tickets at a venue. Why? Because ticket stubs from memorable games turn into big money down the line, and currently, the NBA sees none of that. However, NFTs can be programmed to funnel a percentage of all future secondary sales to a given address, in this case, owned by the team that issued the tickets. In this way, fans retain something that may prove to go up in value, and the NBA generates a new stream of passive revenue from secondary market activity. It’s a win-win.
Read More: How the Golden State Warriors Gamified Fandom With NFTs
But even though NFT “ticket stubs” help put money back in the hands of sports teams and fans, since they don’t function as actual tickets and can’t be used to enter a game, they don’t fix other issues with traditional ticketing (e.g., scalpers, high resale prices, fraudulent tickets). As an industry, this is something collectively we need to continue working toward. Over the past few years, major progress has been made when it comes to NFTs and sports games, but in actuality, we’ve only scratched the surface.
Without taking action, the levels of fraud seen around the ticketing industry will not likely go away. Blockchain and NFTs offer a path to solve those exact problems. Offering complete veracity of the credentials will be vital in revolutionizing how access to venues and events happens in the 21st century. However, this is really just the beginning. There’s so much added value that can come to both fans and franchises, and it simply cannot be ignored. Some of these ideas are already being tested out, but a lot more NFT-based ticketing innovation is likely coming, just around the corner.