Gov. Hochul signs bill to assist in state's crackdown on 'black market' for restaurant reservations

NEW YORK (WABC) -- Gov. Kathy Hochul on Thursday announced new legislation to help the state crack down on the "black market" for restaurant reservations.

The law bans third-party companies that use AI bots that automatically snap up restaurant reservations then sell them for a profit.

"We're putting an end to the predatory black market for restaurant reservations - protecting consumers and businesses, and giving everyone a chance to get a seat at the dinner table," Hochul said.

Recently throughout the state, a marketplace has developed placing a cost on consumers before they even enter the restaurant, while also making dining inaccessible to those who refused to pay.

"This law targets unauthorized resellers who cause chaos for restaurants with last-minute cancellations and no-shows, leaving tables empty and hardworking staff without tips," State Sen. Nathalia Fernandez said.

Some people are not so shocked this has been going on. Take SoHo for example. There is a high demand for tables and it's a packed house at nearly every restaurant on any night. It's the perfect storm for exploitation.

"Not because people want to go to the restaurant but because they want to make a reservation and hope to flip it," said New York State Assemblyman Alex Bores.

The new law targets those who are not authorized to sell - by reservation apps or the restaurants themselves. It happens sometimes on encrypted platforms, leaving some wondering how this will be enforced.

New York State Restaurant Association President & CEO Melissa Fleischut acknowledged the new law will have a profound impact on the restaurant business.

"These 'bots' have wreaked havoc on operations, and I am proud to say that New York is the first state in the country to take meaningful action to address this problem," she said.

Hochul says the law will help restaurant employees, who will no longer lose out on tips when reservations go unsold and are canceled last minute.

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