The California Assembly on Tuesday signed off on a crackdown aimed at a fast-growing cottage industry built on flipping hard-to-get restaurant reservations for cash. The bill, carried by San Francisco Assemblymember Catherine Stefani, would make it illegal for third parties to sell or transfer a reservation for more than they originally paid unless they have written permission from the restaurant. Backers say the move is meant to curb fraudulent bookings and no-shows that already thin out the margins for small dining rooms.
According to CBS News, Assembly Bill 1640, dubbed the “California Restaurant Reservation Anti-Piracy Act,” cleared the Assembly this week with support from the California Restaurant Association. The outlet reports that the bill goes after third-party resellers that deploy bots and other tactics to lock down in-demand tables, then resell them at marked-up prices. Proponents argue the legislation gives restaurants fresh tools to push back against fake reservations and the revenue they quietly drain away.
What AB 1640 Would Do
As drafted, AB 1640 would bar anyone from selling or helping to sell a restaurant reservation for more than they paid unless they have a written agreement with the restaurant. The measure authorizes the attorney general, county counsels and city attorneys to file civil actions, and it also lets affected individuals or businesses sue on their own. Civil penalties could run up to $1,000 per violation, and the bill creates a state fund to receive any recovered penalties, according to California Legislative Information.
Backed By Apps And The Dining Industry
Major reservation apps and industry groups are lining up behind the proposal. In a news release, OpenTable CEO Debby Soo called the bill “truly meaningful for California restaurants,” while Resy CEO Pablo Rivero said it would help preserve the integrity of the reservation process, according to Assemblymember Stefani’s office. The California Restaurant Association sponsored AB 1640 and has argued the law is needed to shield restaurants from deceptive markups and the revenue lost when bogus bookings clog their books.
How Resellers Turned Reservations Into A Commodity
Legislative committee analysis and news reporting describe a small ecosystem of dedicated resale marketplaces and automated concierge services that have turned coveted reservations into a tradeable commodity, sometimes going for hundreds of dollars or even more than $1,700 for a two-top. The Assembly Committee on Privacy and Consumer Protection flagged screenshots and bidding examples from those sites and warned that such markets can lock out ordinary diners while fueling fraudulent bookings and no-shows. Supporters say the new civil penalties and private lawsuits outlined in the bill would finally give restaurants and regulators a way to hold those operators accountable, according to the committee analysis.
With the Assembly vote in the bag, AB 1640 now moves to the state Senate for committee hearings and potential floor votes, according to LegiScan. If it passes the Senate and reaches the governor, enforcement would involve both public actions from the attorney general and private civil suits filed by harmed parties. Lawmakers say the system is expected to be complaint-driven and focused on larger operators rather than individual diners unloading a spare reservation…