Several major hotel-casino operators in Atlantic City are facing lawsuits over allegations of engaging in anticompetitive actions that resulted in increased hotel room rates. US District Court Judge Karen Williams recently allowed three class action lawsuits against a total of six casinos in Atlantic City to be consolidated, following a request from the plaintiff.
The consolidated lawsuit names Hard Rock International, MGM Resorts International, Caesars Entertainment, and Cendyn Group as defendants. The claim alleges that the defendants used a pricing algorithm platform supplied by Cendyn Group to share, coordinate, and set supra-competitive prices for guest rooms, leading to increased hotel room rates since 2018.
According to the lawsuit, the alleged conspiracy has resulted in a breach of the Sherman Antitrust Act and the Clayton Antitrust Act. The plaintiffs also included data from the Division of Gaming Enforcement (DGE) in New Jersey, which showed a decrease in hotel room occupancy at Atlantic City’s hotel casinos since 2017.
The lawsuit alleges that the defendants control between 72% to 80% of the share of hotel rooms in the city, allowing them to establish higher rates. The plaintiffs claim that this has impacted hotel occupancy rates in Atlantic City, as evidenced by the DGE’s data showing a decline in occupancy since 2017.
The lawsuit also mentioned specific properties operated by the defendants, including MGM Resorts’ Borgata Hotel and Casino, and Caesars’ Tropicana Atlantic City, Caesars Atlantic City, and Harrah’s Resort Atlantic City. Even though Caesars sold its Bally’s Atlantic City property, it was also listed in the lawsuit.
The consolidation of the lawsuits against these major casino operators in Atlantic City indicates a significant legal battle ahead as the plaintiffs seek to hold these companies accountable for allegedly engaging in anticompetitive actions that have impacted hotel room rates and occupancy in the city.