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On September 12, the US Attorney's Office for the Central District of California announced the indictment of two (2) Los Angeles based tee time brokers for failing to report $1.1 million in income, $700,000.00 of which the indictment alleged was made from the resale of tee times at 17 Southern California golf courses, mostly located in and around Los Angeles.
A few key takeaways of interest to the California golf community:
- To the many who were skeptical that there was this much money to be made from what amounted to a boiler room operation reselling municipal tee times, this indictment stands as evidence that the US Justice Department believes it can prove beyond a reasonable doubt that these two persons were able to make $700,000.00 from doing just that.
- Given the amount involved here, an amount that reflects the proceeds from only one such operation — there were likely more, but we don't know that for a fact — as long as Southern California's major municipal golf systems continue to remain committed to providing high quality golf at prices well below free market rates, powerful incentives to use various means, including technological, will remain to find ways to skim these kinds of monies from those systems. Urban California is demand rich, supply short territory – and supply isn’t expanding to meet the demand anytime soon.
- As much as the golf community should be pleased that the protocols adopted last year (nonrefundable deposits with cancellation penalties) mitigated much of the problem represented by the persons named in the indictment, we should keep in mind that at least some of that mitigation may have been more the result of these kinds of actors' going into hiding when the matter exploded in the media, because if the allegations in the indictment prove true, they knew they had not reported the income derived therefrom.
- Given all of the above, we have likely gotten only a reprieve, not a more permanent solution. What the two subjects of this federal indictment are charged with has nothing to do with the way in which they earned their income, but rather the fact that they consciously evaded paying taxes on that income. Violation of an LA City Ordinance hardly rises to the level of a crime — a minor civil infraction, perhaps, but not even so much as a misdemeanor, and certainly nothing that would rise to the level of creating a cause of action.
To that 4th and final point, please know that CAG has opened up a dialog with our colleagues in New York, where a Long Island State Senator whose District includes the site of this year's Ryder Cup (Bethpage Black) has filed the BIRDIE ACT, which would do for that state's golf industry what last year's "Restaurant Reservation Anti-Piracy Act" did for New York's restaurants by requiring all reselling of reservations be done per written agreement between 3rd party vendor and restaurant. Florida and other large states have since passed into law versions of "Restaurant Reservation Anti-Piracy Acts." A version of it is now a 2-year bill in California and will be taken up in January.
Given what is at stake — non-authorized schemes that siphon off revenues that could otherwise be reinvested in the golf courses and/or used by owners and operators to provide better golf experiences and jeopardize the affordability/accessibility/community missions of these systems so central to their political viability – this is an issue that the Alliance is going to stay atop and when the time is deemed right, perhaps consider pursuing in California what the golf community in New York is actively pursuing now.
No discussion of this issue would be complete if we weren’t to make clear that the issue here is not 3rd party re-selling per se; it’s 3rd party re-selling without permission. There is much about the many existing 3rd party transactions that are governed by written agreement between facility and 3rd party vendor that benefits facilities and golfers. No one seeks to curtail those agreements, or the benefits derived therefrom.
The National Golf Course Owners Association (NGCOA) has added a day to its biannual Technical Conference (“Tech Con”) this October focused just on this issue. We have to imagine that among the salves it will consider is legislation. Though the legislative path is always an arduous one – a long distance run without guarantee of ever arriving at a finish line – it can offer a more permanent and sustainable solution than the ad hoc salves the industry is likely to keep having to craft to stay ahead of those calculating to extract value from the game’s facilities without providing them benefit.
Along with permanent standard time, this too is an issue that promises to remain on golf’s plate for some time to come.
The information in this newsletter is being distributed among allied associations that form the California Alliance for Golf (CAG), the organization that speaks with one voice in the Capitol regarding legislative and regulatory issues of statewide scope.
(Excerpt from September 2025 California Alliance for Golf Newsletter – Click here for full story.)
