CA Bill Targets Black Market Of Restaurant Reservation Scalpers

CALIFORNIA — State lawmakers hope a new bill will help crack down on a black market operating in California — one that deals exclusively in hard-to-get restaurant reservations.

It might sound unusual, but restaurant industry advocates say that the emerging phenomenon of reservation scalping is creating an environment that encourages fraud, confusion and inequity — in which only those who can pay black-market dealers' fees are able to land a seat at the most in-demand restaurants.

“Online reservation systems should be fair, transparent, and support our small businesses.” said Assemblymember Catherine Stefani, who recently introduced the bill. “AB 1245 will crack down on the predatory practice of reservation scalping, which not only deceives consumers but also exploits our local restaurants who are still struggling to recover from the pandemic.

"By protecting these businesses from fraud and unfair competition, we are ensuring they can focus on what truly matters—serving their customers, creating jobs, and driving our economic recovery.”

The bill comes after New York Gov. Kathy Hochul in December signed into law a similar provision in her state.

The New Yorker reported on what it called an elite network of restaurant resellers who rake in big bucks. The publication profiled one Brown University undergraduate student who said he made $70,000 reselling bookings in 2023.

“Sometimes they recognize my voice, so I have to do different accents,” Alex Eisler said. “I have to act like a girl sometimes. I’m, like, ‘Hiiii, is it possible to book a reservation?’ I have a few Resy accounts that have female names.”

Meantime, websites like Appointment Trader offer a similar service on a larger scale and made $6 million on resold reservations, the New York Post reported. On Friday night, the website was offering a reservation for the next night at Beverly Hills hotspot Funke for $125.

And in another example, a group called #FreeRezy saw reservations traded over a group chat on the encrypted messaging platform Telegram, Eater reported.

The California bill has earned the backing of heavy hitters in the restaurant industry.

“The California Restaurant Association is happy to support AB 1245 because it’s a commonsense bill that will benefit consumers and restaurants alike.” said Matt Sutton, Senior Vice President of Government Affairs and Public Policy of the California Restaurant Association. “AB 1245 will ensure middlemen don’t rack up the cost for reservations so families can afford to visit their desired dining experience and restaurants are not hit with fake reservations.”

Additionally, the bill counts OpenTable and Resy — online reservation platforms used by restaurants themselves — as supporters.

”This legislation will protect restaurants from losing revenue to no shows and fraud, while restoring the integrity of the reservation process for diners," Pablo Rivero, CEO of Resy and Head of American Express Global Dining said.

The bill is set to be heard in Assembly committees this spring.