New Jersey federal court consolidates Atlantic City casino rate lawsuits
Several Atlantic City casinos facing house price conspiracy charges will be consolidated in federal court in New Jersey.
Federal Judge Karen Williams of the U.S. District Court in New Jersey agreed this week to consolidate three class-action lawsuits filed last year against the casinos.
The defendants are Caesars Entertainment, MGM Resorts and Hard Rock International. The three lawsuits involve MGM-owned Borgata and three Caesars properties in Atlantic City: Caesars, Harrah's and Tropicana. The lawsuit also affects Bally's because it is operated by Caesars. The company sold Bally's Atlantic City to a Rhode Island company in 2020 for $25 million, which was later folded into Bally's Corp. Rename.
Hard Rock owns and operates the Boardwalk property of the same name. The six casinos named as defendants in the lawsuit are accused of colluding to raise hotel room rates despite declining occupancy demand.
Third party named as defendant
Along with the casinos, the proposed class action lawsuit has now been consolidated into a consolidated case titled "Cornish-Adebiyi et al." v. Caesars Entertainment, Inc. et al.," concluded that third-party sellers made reservations as defendants. The plaintiffs allege that the Cendyn Group of Boca Raton, Fla., defrauded consumers by helping casino hotels raise prices, violating federal law.
The lawsuit alleges that Cendyn’s “Rainforest” pricing algorithm platform service used by designated casinos violates the Sherman Act, an antitrust law that imposes free competition rules. In 1890, Congress passed the first antitrust law, Sherman, which prohibited "any contract, association, or conspiracy in restraint of trade" as well as any "monopoly, attempted monopoly, conspiracy, or combination to monopolize."
Plaintiffs point to data provided by the New Jersey Division of Gaming Enforcement (DGE) showing that designated casino defendants have significantly increased nightly room rates in recent years, even though occupancy rates did not justify such increases. They argue that given that demand is relatively stable or even declining, house prices should not rise as much as they have.
Defendants knowingly used a common pricing algorithm platform for casino hotels sold and promoted by Defendant Cendyn Group to enable and facilitate an anticompetitive scheme that resulted in Plaintiffs and Class Members paying inflated prices for rooms they leased directly from the casinos. hotel. hotel defendants or their co-conspirators from no later than June 28, 2018 to the present,” the complaint states.
Casino hotels compete for customers with lower room rates in what Cendyn calls a "race to the bottom," where the company's pricing algorithm sets prices for all participating resorts.
The proposed class argued that the system violated a truly free competitive environment in the market. The case is scheduled to continue with a conference call on February 21.
Hotel Details
The New Jersey DGE reported in its 2018 Casino Industry Report that the resort's 15,104 hotel rooms were 80.7% occupied, with an average nightly rate of $137. In 2019, the same hotel room occupancy rate was 78.9%, but the average price per night increased to $142.
Post-pandemic, Atlantic City’s average nightly rate is nearly $173, even though room occupancy is only 67.6%. In 2022, occupancy increased again to 73.4%, but room rates continued to rise to $178.
Read also:
- U.S. cities with the most Swifties per capita
- Blackjack Casino Advantage: How to Beat the Odds
- Football 101: What is relegation in football?
- Rush Street Interactive surges after conference comments
Source: www.casino.org
