FTC Targets Casino Resort Fees with New Junk Fees Rule
The Federal Trade Commission (FTC) has introduced a new rule designed to bring transparency to “junk fees” in industries such as live events and short-term lodging. The Junk Fees Rule, announced on 17 December, requires businesses to clearly disclose the full cost of services upfront, including mandatory fees, aiming to eliminate misleading “bait-and-switch” pricing practices.
For the gaming sector, this rule targets casino-resorts that charge resort fees, which often cover amenities like Wi-Fi, gyms, and pools. While these fees will not be banned, the rule mandates that resorts must prominently display the total price of lodging, inclusive of all mandatory charges. Any omitted fees must be clearly identified, with their purpose and amount disclosed before payment.
FTC Chair Lina Khan said, “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.” The commission estimates the new rule will save consumers 53 million hours annually spent searching for pricing details.
This regulation marks a significant milestone in President Joe Biden’s broader effort to combat junk fees. The Biden administration first began scrutinising these fees in 2022, across sectors including airlines, credit cards, and lodging. After gathering over 70,000 public comments, the final version of the rule was published and will take effect in 120 days, potentially as early as April 2024.
President Biden praised the move, stating, “Junk fees sneak onto your bill and companies end up making you pay more because they can. Today’s announcement builds on work across my administration to ban junk fees and lower costs—saving many families hundreds of dollars each year.”
However, critics, including industry leaders and associations, argue the rule may not significantly impact consumers, as resort fees themselves remain intact. Properties like MGM Resorts have increased resort fees this year, with current charges ranging from $45 to $55 per night in Las Vegas. Industry representatives insist that such fees provide value by covering additional services.
The Nevada Resort Association and the American Gaming Association (AGA) have previously lobbied against the rule, emphasizing that these fees are disclosed adequately and reflect the amenities offered.
The rule’s long-term impact on pricing transparency and consumer experience will become clearer after its implementation.
