By Harvey Silverman, Contributor, Golf Business | Silverback Golf Marketing
A recurring, skeptical theme from golf stakeholders, local politicians, and golfers within the emerging market of third-party tee time resellers is, “Well, how much money can they really make, anyway?” In other words, is it really something we should be worried about?
It was enough for the U.S. Attorney’s Office, Central California District, to worry about. It returned an indictment against twin brothers Se Youn “Steve” Kim and Hee Youn “Ted” Kim, 41, residents of Southern California, charged with two counts of tax evasion, one count of making and subscribing to a false tax document, and two counts of willful failure to pay tax.
According to the Justice Department's press release, “Between 2021 and 2023, the Kim brothers operated a golf tee time brokering business in which they reserved tee times online, including at public golf courses, and resold them to the public for a fee, often violating municipal regulations. They marketed, solicited, and communicated with their customers through various social media platforms, including KakaoTalk, an instant messaging app.
As part of their business, the brothers reserved thousands of tee times for resale at numerous golf courses across the country, including at least 17 public courses in Southern California. They created a monopoly on Los Angeles and Orange County golf course tee times by securing the most desirable early morning slots, often within seconds of release. As a result, they made it more difficult and more expensive for the public to reserve tee times at these courses without paying additional booking fees, especially during the COVID-19 pandemic.
The Kim brothers frequently directed their golf tee time clients to pay reservation fees to their personal accounts, such as Venmo and Zelle, and then transferred those funds to their personal bank accounts.”
Now, here’s the big news: “Overall, from 2021 to 2023, the Kim brothers earned nearly $700,000 from their tee time brokering activities. Despite generating significant income and owing taxes, their actions often violated relevant regulations. business, and from their job as MRI technicians, the brothers willfully failed to report a combined total of more than $1.1 million in income to the IRS for tax years 2022 and 2023. Rather than using their available funds to pay off their outstanding tax balance, the Kim brothers spent their money on a timeshare in Hawaii, luxury vehicles, and high-end retail purchases from brands such as Chanel, Cartier, Louis Vuitton, and Prada, among other things.”
$700K! That’s more than wagered in a round of golf with Michael Jordan. And, MRI technicians must make pretty good money. But, seriously, it is a window that has been opened into how lucrative brokering tee times can be. Brokering tee times without the course’s knowledge or approval has legal implications, most notably with name, image, and likeness copyright infringement, and who “owns” the tee times. The act of buying or reserving tee times for the purpose of selling or reselling them for a profit without course approval is similar to restaurant reservation brokers that have provoked several states to pass or consider laws modeled after New York’s “Restaurant Reservation Anti-Piracy Act,” also passed in Florida. California and Illinois have introduced or advanced similar legislation. Next could be golf.
But in the Kims’ case, the slope they slid down is the business practices and efforts to evade paying taxes that caught the authorities’ attention.
Operationally, it's hard to believe that just two people could rapidly secure tee times across up to 17 courses just by banging away on a keyboard. It leaves open the question of whether the Kims operated a boiler room operation, or built or had built a bot designed to crawl with faster-than-human speed online tee time booking engines when booking windows opened. A bot seems a possible culprit, and it’s an object of discussion at the upcoming NGCOA Golf Tee Time Summit.
The solution to tee time robbery is twofold. First, course operators need to adopt tee time policies that make it nearly or totally impossible for unauthorized third-party tee time brokers to infiltrate the system for purposes of reselling or monetizing the times in other ways. Policies employed by the County of Los Angeles are a good example, as evidenced by the total elimination of tee time brokering on their public golf courses, along with a significant decrease in no-shows and cancellations. The policy requires a $10 per person, nonrefundable deposit when a reservation is made. Also, another $10 is charged if the tee time is canceled within 48 hours of the tee time, or if the customer is a no-show or short-show.
About 40% of course operators responding to a survey conducted for the Tee Time Summit said they have found their course listed on unauthorized tee time websites. Golf Management Software (GMS) providers could build programming that identifies bots and blocks them from unauthorized access. Or, they could program a function that enables course operators to choose who to block and who to allow access. Some are doing it now, and we hope to reach a consensus at the Tee Time Summit that doing so is best for the health of both the respective technology providers and their clients. It’s imperative upon our technology partners to educate and assist their clients on the available resources and how to implement them, and for course operators to heed what technology offers to protect a golf course’s most valuable asset – its tee times.
Here is the government’s press release: https://www.justice.gov/usao-cdca/pr/identical-twins-who-moonlighted-golf-tee-time-brokers-charged-failing-report-more-11.