Report: Ticketmaster Colluding With Scalpers, Taking A Cut

NEW YORK (CBSNewYork) -- One of the world's biggest event ticket providers has been accused of ticket scalping.

A new report points the finger at Ticketmaster for driving up prices and costing consumers millions.

An investigation by the Canadian Broadcasting Corporation and the Toronto Star claims the box office giant is helping scalpers buy tickets and resell them by using a secret program, CBS2's Vladimir Duthiers reported Thursday.

Wearing hidden cameras, journalists from the Toronto Star and CBC posed as scalpers at a major live entertainment conference in Las Vegas In July. That's where they found Ticketmaster representatives appearing to pitch a company-owned resale platform used by ticket scalpers.

Ticketmaster representative: "I've brought in people that are extremely small that have just had just a few sets of tickets and just had the gumption to try and they've become pretty good partners for me. Doing half a million, or whatever."

Undercover CBC reporter: "Half a million dollars? Or half a million tickets?"

Ticketmaster representative: "In sales. In total sales."

"They have a secret scalper program that they don't talk about in any corporate reports," CBC investigative reporter Dave Seglins said.

MORE: Millions Eligible For Free Tickets Through Ticketmaster

Seglins is one of the reporters who went undercover, posing as a ticket broker from Toronto.

"What we discovered is they are selling something called 'Tradedesk,' which is an online system," Seglins said. "It's purposely designed for professional scalpers. It helps manage large inventories."

Here's how it works: Scalpers set up fake accounts to buy tickets in bulk on Ticketmaster.com, since the website limits how many tickets one person can buy. The scalpers then sell those tickets at inflated prices on Tradedesk.

Undercover CBC reporter: "I want to know the straight goods on whether Ticketmaster is going to be policing us using our multiple accounts?"

Ticketmaster representative: "Uh, no. I have a gentleman who's got over 200 Ticketmaster.com accounts."

Ticketmaster can then make money off fees from the initial ticket sale, and the re-sold scalped ticket. For example, CBC analyzed ticket sales for a Bruno Mars concert and calculated that Ticketmaster could make up to $658,000 in fees -- half of that coming from scalped tickets.

"I'm hoping from an investigation like this, we're really bringing transparency so that people could look at this and ask whether this is right, moral, ethical, legal," Seglins said.

In a statement. Ticketmaster told CBS News, "It is categorically untrue that Ticketmaster has any program in place to enable re-sellers to acquire large volumes of tickets at the expense of consumers."

As for the Ticketmaster employee in the undercover video, the company said, "We do not condone the statements made by the employee, as the conduct described clearly violates our terms of service."

Ticketmaster said it has already started an internal review.

There's no federal law against ticket scalping, but Ticketmaster has publicly opposed the practice in the past.