Illinois Considers a Ban on Black Market Restaurant Reservations

After struggling to find reservations at Armitage Alehouse, a bustling Lincoln Park restaurant owned by Hogsalt, which also owns Au Cheval and Bavette’s, Illinois State Rep. Margaret Croke’s frustrations grew when she discovered a bevy of reservations for sale on Appointment Trader.

“It’s something that I don’t think a lot of people know is happening,” Croke says. “They just think that this reservation is tough to get or that you have to know someone… I thought that was insane.”

Appointment Trader sells reservations in a variety of cities including Miami and Las Vegas, and has come under scrutiny by regulators as representative of an emerging black market where bots gobble up bookings at trendy restaurants that are quickly put up for sale. In Chicago, Appointment Trader has an active community with reservations available for restaurants like Maple & Ash, Bavette’s Bar & Boeuf, and Tre Dita. Want a reservation for Saturday, March 22 at Monteverde in West Loop? For $240, the booking is yours. Croke, a Democrat whose 12th District includes Lincoln Park, is now joining calls to regulate the industry.

In February, Croke proposed a new ordinance in collaboration with the Illinois Restaurant Association to combat the unsanctioned sale of reservations by third-parties. The Restaurant Reservation Anti-Piracy Act would bar third parties from listing, advertising, promoting, or selling reservations for restaurants through a website, app, or any other platform without a written agreement between the third party and the restaurant. Violators would face $1,000 fines for each infraction.

Illinois, California, Nevada, and Florida are among the states where lawmakers are considering legislation, following New York’s lead with measures that would make selling restaurant reservations illegal. Their reasoning? Scalpers make reservations scarce, using bots that swarm reservation sites. As a result, normal customers miss out on scoring a table and potential walk-ins won’t stop by because the restaurants appear fully booked. And when reservations don’t sell, restaurants are left to deal with no-shows that hurt business.

“The margins in restaurants are so tight — and when you have people not showing up for reservations that you think your restaurant is fully booked, that’s a problem for your bottom line,” Croke says.

While Chicago may be the restaurant capital of Illinois, Croke sees scalping becoming an issue statewide, especially as popular Chicago restaurant groups like Ballyhoo Hospitality continue to expand outside of urban areas. The Illinois Restaurant Association was drafting an ordinance before Croke contacted the lobbying group. The group’s CEO and president, Sam Toia, tells Eater that members approached the association about the reservation scalping concerns: “Customers shouldn’t have to compete with predatory third-party sellers,” Toia says.

Armed with a sponsor, the ordinance was up for debate on Wednesday, March 12, in Springfield. Croke and Toia say they haven’t encountered any dissent, and that this is a consumer-first ordinance that will protect restaurants during a volatile period where costs are spiraling out of control. Both Croke and Toia say they’re not targeting individuals who might have legitimate concerns for selling or trading reservations. Maybe someone is sick or the babysitter can’t make it. This legislation focuses on scalpers, like a Brown University student who told the New Yorker that he made $80,000 selling reservations.

Jonas Frey, founder of Appointment Trader — which Frey launched in 2021 — says the narrative has been entirely one-sided, and that his business is being unfairly targeted. Appointment Trader has measures to prevent piracy — users who sell fewer than 50 percent of their reservations listed are booted from the site, Frey points out. The website doesn’t deploy bots, he adds: “We feel very strongly that we have strong measures to prevent that from happening,” Frey says.

He compared the fervor surrounding Appointment Trader to eBay’s early days in the late ’90s. Frey wonders what would become of the auction website if it faced the restrictions lawmakers want to impose on Appointment Trader. For example, the New York law mandates that restaurants need to provide written permission for their reservations to be sold. After New York Gov. Kathy Hochul signed the Restaurant Reservation Anti-Piracy Act into law last December, Appointment Trader complied and removed New York from its offerings. Frey compared that to mandating eBay users to gain consent from Sony or Samsung if they wanted to sell a cell phone manufactured by those companies. Appointment Trader is no worse than what Stubhub is for sports and concerts, increasing consumer choice by providing a niche service, Frey argues.

Frey adds that New York and Illinois lawmakers never bothered to reach out and that Eater’s interview request is what alerted him that Springfield was considering a more or less ban on Appointment Trader in the state. Frey says the legislation won’t benefit the consumer, and notes that no consumer watchdogs have gone public with support for the measures. Credit card companies are behind the legislation, he says. Both Resy and Chicago-born Tock are owned by American Express. Frey says Appointment Trader presents a threat to credit card companies offering exclusive reservations as customer perks. Beyond American Express’s stake in Resy and Tock, JPMorgan Chase owns restaurant review platform The Infatuation.

About six months ago, Resy established a task force aimed at reducing bots, acknowledging their negative impact on consumers. The reservation platform backs the legislation in Illinois, Nevada, and Florida. The company is listed as a sponsor in California, which is the equivalent of supporting the bill, as the Golden State’s legislative processes are unique.

Frey says he doesn’t blame AMEX for supporting the measures: “The special interest groups are protecting their market.”

Frey adds: “Whatever is good for the consumer will prevail.”

Pablo Rivero, Resy CEO and senior vice president for American Express Global Dining, offered the following statement:

We stand with restaurants on this issue. They’ve told us that unauthorized third parties who resell reservations often lead to significant no-shows and late cancellations, hurting these small businesses and their customers. Resy and Tock support the Illinois Restaurant Reservation Anti-Piracy Act because it will protect restaurants from losing revenue to no-shows and fraud, keeping reservations where they belong — with restaurants and real guests.

Matt Tucker, head of Tock, the platform founded in 2014 by Alinea Group founder Nick Kokonas and CTO Brian Fitzpatrick — and, like Resy, is owned by AMEX — also addressed the legislation:

Tock supports the Illinois Restaurant Reservation Anti-Piracy Act to protect restaurants and diners against reservation scalping by creating a more transparent and equitable dining landscape. As a trusted partner to the hospitality industry, we applaud all measures that oppose these exploitative practices that undermine restaurants’ ability to serve their communities and safeguard the integrity of restaurant reservations for all parties, especially in our homebase of Chicago.

Restaurants are seemingly in favor of the proposals, but haven’t shown support publicly. Croke says Hogsalt’s legal team has been vocal behind the scenes, but the company declined to comment for this story. Likewise, other attempts to contact restaurant owners have been unsuccessful.

Croke says while the Illinois proposal may be tweaked, she doesn’t anticipate any strong challenges. Enforcement might be a challenge, especially for parties outside of Illinois, but Croke says the measure is worth it.

“If there’s ever anything that comes up that I think benefits the restaurant industry, and if it’s small businesses, I’m going to support it,” she says.