Hotel Pricing AI Software Faces Test After Court Revives Atlantic City Case

Picture a hotel handing its private pricing data to a computer program, while the hotel across the street is feeding its own numbers into that same program. That is the scenario at the heart of a lawsuit against several Atlantic City casino hotels, and a federal appeals court just ruled it can move forward. The case raises a question that reaches far past one boardwalk: can software turn competitors into secret price partners, even if no human ever picks up the phone?

The law firm Mandelbaum Barrett PC laid out the details in a recent post, and the story centers on a shared revenue management platform called Rainmaker, run by Cendyn Group. According to the lawsuit, several casino hotels fed non-public information into the system, and the software then used that pooled data to generate room rate recommendations. The plaintiffs argue this turned the platform into a tool for coordinating prices across competing properties. The U.S. Court of Appeals for the Third Circuit did not rule on whether that actually happened. It ruled that the allegations were serious enough to let the case continue. The hotels deny any wrongdoing, and the facts still need to be sorted out in court.

According to Mandelbaum Barrett, the real issue isn’t the technology itself. Antitrust law has never cared whether competitors coordinate prices over the phone, at a conference, or through an algorithm. What matters is whether the coordination happened at all. As the firm put it in its post: “The court’s opinion suggests that companies cannot assume that the presence of software automatically insulates a pricing strategy from antitrust scrutiny.”

That distinction matters because pricing software has become standard equipment across the hospitality industry, not just for casino giants. Independent hotels, hotel brands, management companies and restaurant groups all lean on similar tools to set rates. Many of those businesses have little visibility into what data feeds their pricing recommendations or how the numbers get crunched. Mandelbaum Barrett suggests that gap in understanding is itself a risk. Operators who don’t know whether their software relies only on public market data, versus data shared by rivals, may not realize they are exposed until a lawsuit like this one lands.

The firm isn’t telling hotels to unplug their pricing tools. Instead, it recommends a short list of questions for owners to ask their vendors and legal teams: What information goes into the platform? Does it rely on public data alone, or does it draw on competitors’ private numbers too? Are managers reviewing the software’s recommendations before setting prices, or just accepting them automatically? What do the vendor contracts say about how shared data gets used? And have compliance policies been updated to account for artificial intelligence tools?

So, what happens next? The Atlantic City case now heads back to the lower court for further proceedings, meaning a final answer on liability is still a ways off. But Mandelbaum Barrett expects the bigger trend to keep building regardless of that outcome. As AI-driven pricing spreads through hotels, restaurants and other consumer-facing businesses, courts and regulators are likely to keep scrutinizing how these systems work under the hood. The firm’s bottom line: technology can help a business make decisions, but it can’t take the legal blame when something goes wrong. That responsibility still sits with the people running the business, not the software they bought to help them.