Two Atlantic City casino guests filed a lawsuit MGM Resorts, Caesars Entertainment and other casino groups alleged last May that the companies colluded to set artificially high hotel prices in the East Coast gambling mecca. The Federal Trade Commission and the Justice Department’s Antitrust Division filed a statement of interest in the case last week, agreeing with the plaintiffs.
The original lawsuit claimed that the property An algorithm was used to set artificially high prices Which varies slightly between properties.
“The two agencies argued that the company’s use of the algorithm could still violate antitrust law even if the two companies never communicated directly, in response to one of the legal arguments used by the defendants,” Wall Street Journal mentioned. “the Federal Trade Commission And Ministry of Justice They also said in their statement that the companies could have been violating US law by using the algorithm to set an initial price, even if they ended up charging different amounts.
Details about the lawsuit
The move comes after the feds also showed support for lawsuits in the real estate industry related to similar uses of algorithms. The Atlantic City lawsuit alleged that the casinos used an anti-competitive reservation model to set room rates.
Properties enter their “commercially sensitive data about pricing and occupancy” into an algorithm that manipulates pricing and prevents hotels from maximizing occupancy, said attorney Jacob Fabel. Fabel sought to file a class action lawsuit against the casinos.
“As a result of this anti-competitive scheme, Plaintiff and Class Members paid artificially inflated rates for guest rooms rented directly from the Casino Hotel Defendants or their co-conspirators from June 27, 2018 to the present,” the lawsuit notes.
A similar lawsuit was filed in January 2023 against Las Vegas casinos. The gaming companies denied the allegations and said there was no direct evidence of collusion or conspiracy.
“The complaint initially fails because it lacks all of the essential elements necessary to plead an antitrust conspiracy,” the attorneys wrote in the Nevada case.
In other Atlantic City-related gaming news, a New Jersey judge recently ruled that casinos have no obligation to prevent compulsive gamblers from betting.
