Judge Tosses Las Vegas Casino Resort Price-Fixing Lawsuit

Posted on: May 13, 2024, 06:03h. 

Last updated on: May 13, 2024, 06:03h.

A lawsuit accusing the four major Las Vegas Strip casino resort operators of price-fixing has been dismissed, handing Caesars Entertainment, MGM Resorts, Wynn Resorts, and Treasure Island a win.

US District Chief Judge Miranda Du rejected the lawsuit, which was an amended version of one she first rejected last October.

According to Du, the amended lawsuit still didn’t clearly show an agreement to conspire to set price points between the resort operators.

“Plaintiffs’ allegations that Defendants entered into a tacit agreement to fix prices still have not crossed the line from conceivable to plausible despite the multitude of additional allegations,” Du’s dismissal read. “This case remains a relatively novel antitrust theory premised on algorithmic pricing going in search of factual allegations that could support it.”

Misplaced Anti-Trust

The class action suit, filed in US District Court in January 2023  by Seattle-based law firm Hagens Berman Sobol Shapiro, alleged that these four casino resort companies — which control 26 of the 33 properties on or near the Las Vegas Strip — colluded to artificially inflate the prices of their hotel rooms in violation of the Sherman Antitrust Act.

According to the lawsuit, the collusion was accomplished via a data-sharing software called Rainmaker, which is manufactured by the Florida-based Cyndyn Group (also a defendant in the suit).

In a competitive market, hotel operators price rooms independently, filling as many rooms as possible. However, information shared and algorithms set through Rainmaker “displace normal competitive pricing and lead to increased room prices,” according to the suit.

Rainmaker’s proprietary software, Guestrev, analyzes hotel guest and room supply information, then artificially suppresses supply, the suit claimed, so it can make dynamic pricing recommendations biased toward the resorts.

According to Du’s dismissal, however, resorts often don’t even accept pricing recommendations from Rainmaker.