Las Vegas Resort Operators File For Dismissal in Price Collusion Lawsuit

Article ByDavid Weir

April 6, 2023

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

Four of the biggest casino operators in Las Vegas asked a US court last week to dismiss a lawsuit involving hotel room price-fixing, according to the Las Vegas Review Journal.

MGM Resorts, Caesars Entertainment, Wynn Resorts, and Treasure Island are all accused of using a shared data system to artificially inflate room prices from 2019 onwards.

Between them, the four companies involved operate more than 25 of the 33 resorts on the Vegas Strip.

This lawsuit was originally filed back in January 2023, and the plaintiffs are two previous Vegas visitors, backed by Seattle-based lawyers Hagen Berman.

The defense’s counterargument is that the lawsuit is spurious, as it does not provide enough details or evidence that any organized conspiracy took place. They see that as grounds for dismissal.

The plaintiffs’ lawyers were not surprised at the latest motion to dismiss the case.

“The defendants in this case will attempt every trick in the book to hedge their bets. But we believe the cards are stacked against them,” Hagens Berman partner Steve Berman told the Review Journal.

What Stays in Vegas

The suit maintains that the casino’s deployment of a company called Rainmaker, who help them share room pricing and supply information, results in unfair and anti-competitive market practices that harm customers.

Rainmaker and its software supposedly helped “collect and share data between Vegas hotel competitors to unlawfully raise prices of hotel rooms,” according to allegations from Hagen Berman.

“What happens in Vegas will no longer stay in Vegas. We intend to expose the under-the-table deals perpetrated by these Vegas hotels, and we intend to hold them accountable,” they stated.

Basic Questions

For their part, the defendants’ various lawyers have stuck to their guns.

‘Plaintiffs fail to answer any of the “basic questions” that the Ninth Circuit requires to plausibly allege an antitrust conspiracy in violation of Section 1 of the Sherman Act—that is, “who, did what, to whom (or with whom), where, and when?’ said the preliminary statement in their dismissal motion.

One of the plaintiffs’ core points is that the Las Vegas hotel rooms are prohibitively more expensive now than they were before 2019.

The resort operators claim this is all due to the impact of the Covid-19 pandemic and increased demand.

Meanwhile, the plaintiffs have pointed out that Cendyn, the company behind Rainmaker, has repeatedly advertised its services in a way that backs up the price-fixing allegations.

For example, they quoted a testimonial that saw a hotel’s revenue increase by 70%, despite only a 50% occupancy increase over that period. They also quoted a Rainmaker employee who said, “The ultimate goal is not chasing after occupancy growth, but instead maximizing profits across all revenue streams.”

Is this damning evidence of a conspiracy between supposedly competing Las Vegas resort operators to unfairly increase pricing on rooms? Or simply companies efficiently researching their competitors to set a fair market price?

The courts will decide the answer to that.