9th U.S. Circuit Court of Appeals Asked by Plantiffs to Reinstate Class Action

Consumers who accused several Las Vegas casino resorts of a hotel room price-fixing scheme have asked to reinstate the lawsuit, arguing that the case is relevant to various antitrust claims against companies that use new technologies to pass on inflated costs to the public.

In a lawsuit filed Thursday with the 9th U.S. Circuit Court of Appeals, hotel patrons asked to hear a class-action lawsuit against five Las Vegas casino operators and a software company, even though a Nevada district court judge dismissed the case earlier this year.

Plaintiffs claim to have presented sufficient evidence of coordinated efforts by Wynn Resorts, Caesars Entertainment, Treasure Island, Blackstone (former operator of The Cosmopolitan), JC Hospitality (operator of Virgin casino-hotel) and Cendyn Group, a Florida-based computer software company and data, which developed the hotel room reservation program used by casinos, and its Georgia-based subsidiary Rainmaker Group Unlimited.

The class action lawsuit alleges that hotel operators conspired to overcharge guests by collectively feeding artificially high prices into the software, thereby changing the way the algorithm determined room prices.

“Today, competitors can use algorithms to collude more easily and effectively than in the past,” reads the lawsuit filed on September 26. The brief’s summary states: “Left unchanged, the (U.S. District Court in Nevada) ruling would effectively shield algorithmic pricing from antitrust scrutiny.”

The casino-hotel operators did not immediately respond to a request for comment on Friday. The companies have previously denied these allegations.

A similar case filed against casino hotel operators in Atlantic City, New Jersey, is pending. This case involves Caesars Entertainment – which operates three casinos in Atlantic City – and Cendyn, as well as MGM Resorts International (operator of the Borgata casino-hotel) and Hard Rock International.

U.S. District Chief Judge Miranda Du dismissed the Nevada case in May. In the 18-page decision, Du wrote that the clients failed to convincingly demonstrate an organized effort on the part of the hotel operators or software developer.

“This case remains a relatively new antitrust theory, based on algorithmic pricing in search of factual allegations to support it,” the fired executive said in May.

The Sept. 26 filing said the U.S. District Court of Nevada erred in dismissing the claims, stating that “the court reached inferences against plaintiffs, ignored established case law, and adopted reasoning that would have effectively shielded algorithmic pricing from liability.”

David Danzis can be reached at [email protected] or (702) 383-0378. Follow AC2Vegas_Danzis on X.