In a plot seemingly ripped from the pages of a thrilling crime novel, topnotch American casinos continue to face the sharp edge of controversy and potential reputation damage as they battle a daunting class action lawsuit. The setting is the epicenter of the gaming world, Las Vegas, a scene flamboyant with lights and endowed with economic pulsations that carry the rhythm of a city defined by its ostentatious resorts.
The four heavyweight casino resorts, Caesar’s Entertainment, MGM Resorts, Wynn Resorts and Treasure Island – which collectively control the fortunes of 26 out of the 33 resorts on or near the dazzling Las Vegas Strip – are embroiled in an unresolved brewing legal storm.
This tempest sprang to prominence when these power players were accused of nefariously inflating their hotel room prices, an act which echoes of collusion and price-fixing tactics. A snapshot generated using Artificial Intelligence interestingly visualizes the essence of these claims, conjuring images of skewed pricing dynamics on the Las Vegas Strip.
This infamous controversy first took shape as a class action suit in 2023. The four gambling behemoths, along with software company Cendyn of Boca Raton, Florida, were implicated. Cendyn is the producer of Rainmaker, a data-sharing software cited as instrumental in implementing the alleged price-raising agenda.
Throughout multiple twists and turns, the legal proceedings experienced tandem dismissals, most recently last month. However, in a gripping courtroom drama, the highly anticipated last dismissal, which was issued by US District Chief Judge, Miranda Du, is now part of an active appeal.
Indeed, the appeal was accepted by the 9th U.S. Circuit Court of Appeals in San Francisco. Consequently, this case now builds on a larger national narrative defined by a slew of algorithmic-pricing antitrust cases. Hence, without a doubt, it has now transcended the boundaries of Las Vegas to become a national concern. The U.S. Justice Department labels this constellation of lawsuits as a new “frontier” of price-fixing battles.
Interestingly, this lawsuit distinctively stands out as the first of this new breed of algorithmic pricing cases that have made it to an appeals court. Amid such a backdrop, legal scholars and economists are keenly observing how this lawsuit could potentially set a precedent for future antitrust actions involving industries that employ algorithm-based pricing strategies.
The legal battle hinges on the Sherman Antitrust Act. The crux of the case is that the four casino goliaths conspired using Rainmaker, thereby violating the Act. However, the defense argues that the software merely provided suggestions that could potentially be ignored. Judge Du supported this line of argument, stating that the plaintiff’s allegations lacked the necessary clarity and credibility for the lawsuit to be persuasive.
The saga, however, is far from over. The appeals court will soon receive submissions from both sides, in addition to input from interested parties. A decision, expected to create ripples across multiple industries, is anticipated to surface in the next year, casting a shadow of suspense over the Las Vegas Strip, the federal antitrust landscape, and the nation’s business community.
