A class action lawsuit alleging many Atlantic City casinos of conspiring to raise hotel room rates has been dismissed by a federal judge in New Jersey. U.S. District Judge Karen Williams dismissed the lawsuit against well-known casino operators like Caesars Entertainment and MGM Resorts on the grounds that there was insufficient evidence. It is not possible to refile the lawsuit after her prejudiced ruling. The gaming companies have repeatedly refuted the claims.
Allegations of AI-Driven Price Coordination
The plaintiffs claimed that the casinos used sophisticated software that acted as a “shared pricing brain,” allowing them to coordinate room rates without direct communication. According to the lawsuit, this AI-powered technology enabled the hotels to adjust prices based on real-time data like occupancy rates. The plaintiffs argued that, while the use of AI in setting prices may be new, the underlying conduct—collusion—was not.
The Federal Trade Commission (FTC) and the Antitrust Division of the Justice Department both endorsed the lawsuit. Even though the casinos never spoke to one another directly, these authorities contended that the casinos may have broken antitrust laws just by employing the shared pricing algorithm. Even if the final rates were different, the FTC and DOJ further argued that the casinos may have utilized the algorithm to set initial prices, which may still amount to illegal price-fixing.
Judge Williams determined that there was insufficient evidence presented by the plaintiffs to support a trial, even with support from federal agencies. A related Nevada case that charged hotels in Las Vegas with price-fixing was also recently dropped. In that particular case, the plaintiffs are appealing the decision, nevertheless.
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