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Las Vegas Hotels Face Antitrust Suit Over Price Collusion

 |  January 26, 2023

MGM Resorts, Caesars, Treasure Island, and Wynn Resorts are facing federal antitrust litigation over claims they conspired to jack up room rates at the Las Vegas Strip’s top hotels, reported Reuters.

The lawsuit, filed late Wednesday, accuses the four hospitality giants of illegally colluding through their shared adoption of pricing algorithms engineered by the Rainmaker Group, a Cendyn Group subsidiary, to charge record prices in 2022. The companies allegedly control “the vast majority” of the city’s most famous casino resorts, including the Bellagio, Wynn, Caesar’s Palace, MGM Grand, and Mandalay Bay.

Hospitality industry tech company Cendyn and its subsidiary Rainmaker Group, which the lawsuit said provides the algorithms, were both also named defendants.

Read more: Hong Kong Watchdog Published A Set Of “Non-collusion Clauses”

The lawsuit, filed on behalf of a resident of Florida and a resident of Washington state who allege they stayed in defendants’ hotel rooms, claimed the group of hotel defendants, using shared data, could “defy supply and demand dynamics” in the hospitality industry.

“Any units listed at prices exceeding the market price would be undercut by competitors and thus stay empty,” according to the lawsuit. “A hotel operator with overpriced, empty rooms would eventually go out of business.”

In a statement, a spokesperson for MGM Resorts said the allegations against it “are factually inaccurate, and we intend to defend ourselves vigorously against these meritless claims.”