A group of former hotel guests have filed a brief with the US Court of Appeals for the Ninth Circuit, arguing that many Las Vegas casino hotels are engaging in price-fixing, violating local antitrust laws. This complaint follows an earlier dismissal of a Las Vegas hotel price-fixing lawsuit.
The earlier lawsuit claimed that major operators leveraged the data-sharing software Rainmaker to share sensitive data with one another and artificially inflate room prices. It challenged the implicated companies under the Sherman Antitrust Act, which aims to prevent anti-competitive practices that could harm consumers.
Guests Insist That Operators Violated Antitrust Laws
For context, a federal judge dismissed the previous lawsuit, resulting in a significant victory for the Vegas operators. The judge had argued that the plaintiffs were unable to prove there was an agreement between the businesses.
The complaint disagreed with the court’s earliest stance. The plaintiffs said that the court drew inferences against plaintiffs and ignored well-established case law.
Indeed, the court’s reasoning would effectively immunize algorithmic price fixing from antitrust scrutiny and lead to a variety of absurd results.
Complaint excerpt
The plaintiffs reiterated the claim that competitor operators delegate their pricing to a single third-party actor, effectively undermining the competitive aspect of the market.
In any case, the use of machine-powered algorithms has been a point of contention within the sector, previously sparking similar lawsuits in other US markets too.
The Operators Denied the Allegations
According to the complaint, major gambling and hospitality companies, such as MGM Resorts, Caesars Entertainment, Treasure Island and Wynn Resorts, have been consistently increasing their room prices since 2015. The software supplier Cendyn Group, which developed Rainmaker, has also been implicated in this alleged price-fixing operation.
Plaintiffs alleged that the companies’ price increases sought to generate extra profit and were not based on occupancy rate concerns.
However, casinos previously dismissed these claims as baseless, saying that there is no evidence of a conspiracy. The implicated parties noted that the complaint fails to identify an individual who joined the purported conspiracy, meaning that the plaintiffs had no idea when it began.
