Las Vegas Hotels Price Collusion Lawsuit Dismissed, Plaintiffs to Appeal

Article ByDavid Weir

October 26, 2023

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Posted in: US Gambling News, Nevada Gambling News, US Casino News, US Gambling Crime News

A federal judge in Nevada has dismissed a class-action lawsuit alleging hotel room price-fixing among several famous operators of Nevada casino venues on the Las Vegas Strip. However, attorneys for the plaintiffs are expected to appeal the decision.

The lawsuit was filed back in January by Seattle-based law firm Hagens Berman Sobol Shapiro against Caesars Entertainment, MGM Resorts International, Treasure Island, and Wynn Resorts Holdings. It also claimed against Cendyn Group, a Boca Raton, Florida-based hospitality data analytics and software firm, and its subsidiary, Rainmaker Group Unlimited, based in Georgia.

The lawsuit claimed that the hotel operators violated the Sherman Antitrust Act by using the Rainmaker software, and seeks to hold the defendants liable for repayment for guests who overpaid.

Lawyers for the casinos asked the court to dismiss the claim back in April 2023, and six months later, U.S. District Judge Miranda Du has given her agreement.

Dismissed Without Prejudice

This week, she issued a 13-page order rejecting the lawsuit, stating that it was flawed because it failed to show that the hotel companies agreed to conspire to set price points, and it couldn’t explain why operators were required to accept prices the Rainmaker software recommends.

“The court therefore cannot say which pricing algorithms each hotel operator uses, making it impossible to infer that all hotel operators agreed to use the same ones,” Judge Du wrote.

The law firm is allowed to refile the complaint within 30 days, and attorneys with the firm indicated they would do that. Representatives of the resort companies have not yet commented on the lawsuit.

MGM was removed from proceedings in October after it emerged that it did not, in fact, employ the alleged collusive pricing software Rainmaker at any of its Las Vegas properties.

“Plaintiffs do not plausibly allege that any MGM hotels within Plaintiffs’ defined market of the Las Vegas Strip used the Rainmaker software in a way otherwise alleged as the alleged conspiracy Plaintiffs challenge in this case,” the judge wrote in granting MGM’s motion to dismiss.

“MGM is accordingly dismissed from this case without prejudice.”

Related: Our guide to the best Nevada online casinos, no room fees needed

Prices Set to Remain High

Since the COVID-19 pandemic, many Las Vegas Strip resorts have made efforts to keep hotel rates high to avoid the appearance of being desperate and keep their reputation for quality.

For the first eight months of 2023, the average daily room rate for Las Vegas hotels is $178.11, according to Las Vegas Convention and Visitors Authority statistics. In 2019, the average rate was $132.62.

They generally adhere to supply-and-demand philosophies, raising prices when major events are in town, such as the NFL Draft, Electric Daisy Carnival, National Finals Rodeo, and the recent G2E Gaming Expo.

However, since visitor numbers (and monthly Nevada casino revenues) have reached record highs in 2023, Las Vegas visitors may start getting frustrated at the continuing high prices.

Some of the highest hotel rates in history for Las Vegas are anticipated in November and February when the Formula 1 Las Vegas Grand Prix and Super Bowl are in town. Even though the price of hotel rooms for the Formula 1 race has steadily dropped since the middle of the year, they are still well above average prices.

Many operators are offering high price luxury VIP race weekend packages for the event, including a million dollar package at Wynn, an $888,888 package at Resorts World, and a $5 million week long deal at Caesars Palace.