Hotel guests seek appeal in Las Vegas hotel price-fixing lawsuit

Consumers who accused several Las Vegas casino-resorts of a hotel room price-fixing scheme have requested their lawsuit be reinstated, arguing the case carries significance for various antitrust claims against companies using new technology to pass along inflated costs to the public.

On Thursday, in a filing with the 9th U.S. Circuit Court of Appeals, the hotel customers asked that their class-action lawsuit against five Las Vegas casino operators and a software company be allowed to move forward even though a Nevada district court judge dismissed the case earlier this year.

The plaintiffs contend they have presented sufficient evidence to establish a coordinated effort on the part of Wynn Resorts, Caesars Entertainment, Treasure Island, Blackstone (former operator of The Cosmopolitan), JC Hospitality (operator of the Virgin casino-hotel), and Cendyn Group, a Florida-based computer software and data company that developed a hotel room booking program used by the casinos, and its subsidiary, Rainmaker Group Unlimited, based in Georgia.

The class-action suit alleges that the hotel operators colluded to overcharge guests by collectively feeding the software program artificially inflated prices, thereby altering how the algorithm determined room rates.

“Today, competitors can use algorithms to collude more easily and effectively than in the past,” the Sept. 26 court filing states. In its summation, the filing argues: “Left undisturbed, the (U.S. District Court of Nevada’s) order would effectively immunize algorithmic price fixing from antitrust scrutiny.”

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

A similar case brought against casino hotel operators in Atlantic City, New Jersey is pending. That 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 case in Nevada in May. In the 18-page decision, Du wrote that the customers failed to convincingly demonstrate an orchestrated effort on the part of the hotel operators or the software developer.

“This case remains a relatively novel antitrust theory premised on algorithmic pricing going in search of factual allegations that could support it,” the May dismissal stated.

The Sept. 26 brief says the Nevada District Court erred in dismissing the claims, saying, “the court drew inferences against Plaintiffs, ignored well-established case law, and embraced reasoning that would effectively immunize algorithmic price fixing from liability.”