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February 12, 2012

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Strip discount-ticket seller hit with antitrust suit

By Steve Green (contact)

Wednesday, Dec. 16, 2009 | 2:05 a.m.

A big seller of discount show tickets to tourists on the Las Vegas Strip has been hit with an antitrust lawsuit filed by a competitor.

VegasTix4Less, which has five locations in Las Vegas and California selling discount Las Vegas show and tour tickets, filed suit in U.S. District Court in Las Vegas on Monday against Tix4Tonight LLC and its parent Tix Corp. of Studio City, Calif.

Tix4Tonight has eight locations on the Las Vegas Strip selling tickets at discounts up to 50 percent.

Producers and venues increasingly are unloading excess ticket inventory at such discount kiosks, which cater to tourists making last-minute purchases. The tourists are typically interested in seeing a show but have no specific show in mind.

The inventory and pricing for the shows changes daily depending on how many unsold tickets are available for each production.

VegasTix4Less is owned by online travel site VEGAS.com, which, like the Las Vegas Sun, is part of The Greenspun Corporation based in Henderson.

VegasTix4Less claims in its lawsuit that Tix4Tonight controls more than 65 percent of the market in Las Vegas for discount show tickets.

VegasTix4Less claims Tix4Tonight has worked to maintain its dominance with anti-competitive conduct, such as extracting exclusive distribution rights from venues and producers, threatening venues and producers that deal with VegasTix4Less and trying to bribe at least one businessman into excluding VegasTix4Less from selling tickets at the Showcase Mall.

The lawsuit also complained that Tix4Tonight has been falsely telling business partners it’s on the verge of winning patent rights "over the entire discount ticket business and (will) once again be the only game in town."

Tix Corp. Chairman and Chief Executive Mitch Francis issued this statement Tuesday in response to the lawsuit: "While we cannot comment on a lawsuit we have not yet received, Tix Corp. is proud of the value we have delivered to producers and consumers over the past seven years at our Tix4Tonight discount ticket booths in Las Vegas. Claims asserted against Tix are entirely without merit.”

Tix, which has publicly traded stock, reported a third quarter loss of $157,000, break-even on a per-share basis, vs. a loss of $1 million or 3 cents per share in the year-ago quarter. Revenue of $9.362 million was up from $8.839 million.

It said commissions and fees from ticketing services totaled $4.6 million.

"After approximately eight years of effort, Tix Corp. has received a 'Notice of Allowance' from the United States Patent and Trademark Office that it will soon be issued a patent for its inventions concerning discount ticket brokerage. The company believes the patent is quite broad, covering ticket booths, online ticket sales and even ticket sales over cell phones," Tix said in a November regulatory filing. "The company believes the patent encompasses the business it conducts under its Tix4Tonight subsidiary in Las Vegas. A 'Notice of Allowance' confirms the patent application has been examined and is allowed for issuance as a patent and the prosecution on the merits is closed."

But VegasTix4Less, in its lawsuit, called the prospective patent "invalid and unenforceable."

VegasTix4Less said the patent application "includes almost no detail, but instead generally describes a central computer that box offices would use to transfer ticket information to consumers via retail kiosks, the Internet and telephones."

Represented by attorneys with the law firm Lewis and Roca LLP, VegasTix4Less complained that Tix4Tonight’s alleged attempts to monopolize the market means producers, venues and theater patrons "will be forced to spend more (higher commissions and transaction fees) for less."

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