Everything You Need to Know About California's Crackdown on Illegal Restaurant Reservations

A lot of California’s eateries demand a reservation for evening meals, and for the hardest-to-book spots within these venues, illegal online platforms have complicated matters further—making both access and costs higher for customers looking to secure a table. Websites such as Appointment Trader offer high-demand restaurant bookings nationwide, including at some prestigious dining places right here in California. the French Laundry or Funke in Beverly Hills, even House of Prime Rib In San Francisco, now California is among several states moving forward with regulations for the industry.

In December, Governor Kathy Hochul of New York enacted the Restaurant Reservation Anti-Piracy Act into law , becoming the first state to prohibit third-party websites from benefiting from the gamification of reservation systems such as OpenTable, Resy, Tock, and SevenRooms. In February, California also adopted similar legislation with the introduction of Assembly Bill 1245 On Wednesday, February 26, legislation was proposed to "ban third-party reservation services from facilitating unapproved bookings, thereby eliminating a exploitative market environment that victimizes consumers and disadvantages smaller enterprises," as stated in the proposal. press release by Assemblymember Catherine Stefani (D-San Francisco), who is proposing the bill. Other states, like Illinois Nevada and Florida are likewise pursuing their own actions to stop companies from selling restaurant reservations.

Here’s a closer look at these so-called reservation resale sites and the legislation being proposed:

How do these external websites obtain the reservations initially?

A number of independent online markets utilize advanced technologies to swiftly acquire booking spots. As soon as eateries make their reservations available through systems like Resy or OpenTable, automated tools immediately snatch these slots, frequently focusing on popular venues known for limited seating availability. This essentially monopolizes prime timing windows. These sites subsequently offer these bookings for resale via their respective platforms. In essence, this mirrors the practice seen with concert tickets where they're bought in bulk and later sold at inflated prices compared to what was initially charged.

Customers can additionally look for particular reservations at a restaurant and “provide financial 'incentives,'” according to the details. San Francisco Chronicle The article discusses an Appointment Trading system for securing reservations. This concept might be compared to offering a reward. In this scenario, the person requesting the reservation can obtain one from someone who already holds a confirmed slot, or others may attempt to secure that reservation with the aim of earning a financial incentive.

However, there’s also a simpler approach without high technology. like this enterprising gentlemen In 2024, someone was cited for generating $70,000 through fake reservations. They created bogus numbers and email addresses to book spots and then resold these bookings to other individuals.

Hold on a moment. What amount are individuals paying for reservations?

Restaurant prices vary based on timing and location. You'll notice a significant distinction between reservations made for weekends versus those scheduled for weekdays.

Seeking a reservation for a party of six at House of Prime Rib on Friday, March 21, would set you back around $250 based on a quick look at an online booking platform. In contrast, reservations at The French Laundry may vary from approximately $120 for a Friday evening seat on March 14—provided availability allows last-minute bookings—to up to $2,540 for securing a confirmed spot for four people on Monday, March 17. As mentioned by one ticket reseller consulted. New York Post mentions they impose a cost ranging from $500 to $1,000 and have collaborated with both Justin and Hailey Bieber as well as the NBA to reserve table seats.

Why is this an issue for restaurants then?

As https://5.180.24.3/Chicago Reports indicate that third-party reservation resellers harm restaurants in several ways. For example, these platforms often use bots to make reservations, causing the restaurant to seem fully booked even though genuine customers cannot secure spots. Consequently, potential patrons might not opt to become walk-ins upon seeing full availability. Additionally, when reserved tables remain unoccupied—leading to what’s known as "no-show" situations—it negatively impacts the establishment’s revenue stream, ultimately damaging their business. As the San Francisco Chronicle notes in a tale about reservation no-shows, this leads to wasted employee time and spoils perishable goods.

However, what do external websites think about this topic?

Jonas Frey, the creator ofAppointment Trader, draws parallels between his venture and StubHub—a platform known for reselling event tickets—and believes that his enterprise is unjustly singled out by these proposed laws. According to him, the company makes efforts to combat fraud by removing individuals who fail to list at least half of their bookings for sale, emphasizing that they do not employ automated tools like bots.

In his interview with https://5.180.24.3/Chicago Frey highlights the businesses backing these bills—especially Resy and Tock, which receive support from American Express—mentioning that these credit card firms provide premium reservation services potentially jeopardized by platforms like Appointment Trader. He also notes that no public consumer advocates have endorsed these initiatives.

I'm still unclear why using platforms like these is such a significant matter.

Despite arguments from platforms such as Appointment Trader that they can self-regulate, the present setup often leads to everyday consumers being disadvantaged, and businesses that do not wish to participate getting hurt. With reservations going to whoever bids the most, only affluent individuals—such as celebrities like Justin Bieber or entities like the NBA—are capable of consistently affording these bookings. As stated in the press release from Stefani’s office: "This situation fosters a dining environment where securing sought-after tables at trendy spots becomes exclusive to those willing to cover additional costs, thereby denying countless people and families the chance even to make simple reservations after restaurants open up availability."

Even more problematic, individuals who wish to dine at the restaurant yet are unwilling to pay an additional fee for booking a table end up missing their chance. Consequently, restaurants may find themselves with unoccupied seats even when they did not agree to the practice of selling reservations.

If this legislation becomes law, would it be possible to enforce it?

Stefani told the San Francisco Chronicle Enforcement will rely on complaints, with penalties reaching up to $1,000 for each violation.

Has something similar occurred in the past?

One could argue that this practice is a more high-tech version of line-sitting The primary distinction lies in how people behave Who offer their services for waiting in lines? must be physically present. If a bot handles your tasks, you can simultaneously be in multiple places at once.

— Additional reporting by Brenna Houck.