How THG's past business dealings sparked Brazil probe
Kevin Mallon, a company director for sporting ticket agency Marcus Evans Ltd - the parent of THG - was arrested on Friday, August 5, in Rio de Janeiro, allegedly attempting to illegally resell tickets to Olympic ceremonies.
Mallon wasn't alone. Arrested alongside him was Barbara Carnieri, a Brazilian national and a translator who is also said to be an employee of a Marcus Evans Ltd company. Along with Mallon and Carnieri, 10 other Brazilians were arrested - with a total of 1,000 tickets seized.
THG Sports was the authorised Irish reseller for London 2012 and Sochi 2014, but has no such rights for Rio 2016.
Director of ticketing for the Rio games, Donovan Ferreti, said that Brazil learned from the tout ticket sales at the World Cup and "created a group with the police two years ago to fight against this kind of sale." That group made the arrests this month.
On June 17, 2014, during the World Cup, James Sinton, CEO of THG Sports, was arrested in a hotel in Rio for unauthorised sales of 'packages' for tournament games. Sinton was released after paying a fine - and immediately left Brazil.
Brazilian police chief Fernando Veloso said that the tickets Mallon had in his possession were genuine and not fake, saying, "these are real tickets. They are originals. They are offered as part of the package, facilities like the transport of passengers, and other things like that".
A ticket for Rio 2016 seized during a search of an apartment after the arrest of Kevin Mallon bears the logo of the Olympic Council of Ireland (OCI).
Inspector Ricardo Barbosa told a press conference in Rio that THG was offering tickets for the opening ceremony for more than four times the original price, and claimed the combined worth of the illegal ticket sales could have been up to €3m.
According to the Brazilian broadcaster Globo, in one case a Brazilian man purchased 10 tickets, spending a total of $80,000 (€72,200).
For each Olympic Games the International Olympic Committee (IOC) allocates tickets to each national Olympic committee based on population and sporting prowess. Each of these typically contracts an authorised ticket reseller (ATR). These are allowed sell on these tickets at an agreed mark-up or as part of travel or hospitality packages.
But the IOC demands that each ATR only sell into the territory of the national Olympic committee from which it holds its contract. The most prized contract of them all is the one to sell hospitality packages in the host nation, which traditionally accounts for up to 70pc of the hospitality market at each Olympic Games.
In April of last year, the Rio contract was won by US company IMM, in partnership with Latin America's largest airline, LATAM.
If Mallon was found to have been selling IOC tickets to Brazilian citizens or corporate clients, he may be in breach of Rio's ticketing laws.
Sunday Indo Business