The commission has introduced a new bipartisan rule called the Junk Fees Rule, designed to eliminate “bait-and-switch” pricing tactics. This practice typically involves businesses, particularly those in the live-event ticketing and short-term lodging sectors, advertising a low price only to later add extra charges. In the gaming world, this targets casino-resorts known for imposing resort fees.
Instead of banning these fees outright, the rule mandates that resorts must “clearly and conspicuously disclose the true total price inclusive of all mandatory fees” for short-term stays. Furthermore, the total lodging price must be displayed “more prominently than most other pricing information.”
Additionally, if resorts choose to exclude fees from advertised prices, they must “clearly and conspicuously disclose the nature, purpose, identity, and amount of those fees” before consumers agree to payment. According to the FTC, the rule is intended to save time for consumers by reducing the time spent searching for deals. In a statement, the commission estimated Americans could save 53 million hours annually by better understanding pricing information.
“The FTC’s rule will eliminate junk fees related to live event tickets, hotels, and vacation rentals, saving Americans significant amounts of both money and time,” said FTC chair Lina Khan in the announcement. “I encourage enforcement agencies to address these illicit fees and urge policymakers at both state and federal levels to build on this success with legislation that prohibits unfair and misleading junk fees across all sectors of the economy.”
Rule Change Marks a Milestone in Biden’s Campaign Against Junk Fees
Targeting so-called “junk fees” has been a key focus of the Biden administration. Federal officials began investigating various industries, including hotels, ticketing platforms, credit card companies, airlines, and others, back in 2022.
The FTC reportedly received over 12,000 comments leading to the initial draft of the new rule last October. Following this, the commission collected an additional 60,000 comments before unveiling the final version recently. The rule is set to take effect 120 days after publication in the Federal Register, potentially as early as April.
“We are all familiar with encountering hidden fees at checkout, where these costs suddenly appear on the bill, leading to higher payments,” President Biden remarked in a statement. “These fees accumulate, impacting Americans financially. Today’s announcement is part of a broader effort to eliminate junk fees and reduce expenses, saving families hundreds of dollars each year.”
Is the Change Truly Needed?
Though the outgoing administration sees the rule as a success, its actual impact remains uncertain. The fees themselves are not being eliminated, which some believe would be more impactful. Such fees often cover amenities like Wi-Fi, shuttle services, gyms, pools, and more. Consequently, the industry argues these charges are not merely “junk” but valuable, contending that all fees are already disclosed before payment.
Resort fees are commonplace along the Las Vegas Strip and in most high-end US properties. MGM Resorts, for instance, has increased its resort fees in Las Vegas twice this year—once in January and again this month. Currently, guests at MGM’s Strip properties face resort fees ranging from $45 to $55 per night.
Neither the American Gaming Association (AGA) nor the Nevada Resort Association responded to requests for comments. Previously, the latter argued that state resorts already disclose such fees. AGA President and CEO Bill Miller had earlier sent a letter to the FTC opposing the rule change.
“Resort fees signal to customers that they receive more than just a nicely furnished room,” Miller stated in February 2023. “Because these additional amenities and services cost the resort, patrons are charged a fee—these are significantly valuable and should not be labeled as ‘junk.’”