{"id":2934,"date":"2024-10-09T01:36:12","date_gmt":"2024-10-09T01:36:12","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/casinos-are-defeating-suits-over-algorithms-and-room-rates\/"},"modified":"2024-10-09T01:36:12","modified_gmt":"2024-10-09T01:36:12","slug":"casinos-are-defeating-suits-over-algorithms-and-room-rates","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/casinos-are-defeating-suits-over-algorithms-and-room-rates\/","title":{"rendered":"Casinos Are Defeating Suits Over Algorithms and Room Rates"},"content":{"rendered":"\n
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A federal judge in New Jersey has dismissed a suit claiming that some Atlantic City casinos used pricing software to unlawfully fix rates for hotel rooms.<\/p>\n<\/div>\n

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It follows an earlier dismissal of a Nevada\u00a0case involving similar claims.<\/p>\n<\/div>\n

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The plaintiffs failed to establish a plausible price-fixing conspiracy among the defendant casinos because there were wide variations in the time periods when the casino defendants used the software, U.S. District Judge Karen Williams ruled.<\/p>\n<\/div>\n

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In addition, the algorithm’s pricing recommendations offered to each hotel were not based on competitors’ data because the plaintiffs failed to allege that the hotels ever comingled their room rate information in a common dataset, Williams ruled when she dismissed the suit, Cornish-Adebiyi v. Caesars Entertainment.\u00a0<\/em><\/p>\n<\/div>\n

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The New Jersey ruling follows the dismissal in May of a similar suit against casino hotels in Las Vegas and the same software maker, for similar reasons. That case, Gibson v. Cendyn Group<\/em>, is now before the U.S. Court of Appeals for the Ninth Circuit.<\/p>\n<\/div>\n

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In the New Jersey case, software maker Cendyn Group and six casinos faced claims on behalf of a class of consumers that hotel room prices were supra-competitive because the casino defendants used Rainmaker,\u00a0Cendyn’s product, to facilitate an anticompetitive scheme.<\/p>\n<\/div>\n

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The named companies are Caesars Atlantic City Hotel & Casino, Harrah’s Resort Atlantic City Hotel & Casino, Tropicana Casino and Resort Atlantic City, MGM Resorts International, Borgata Hotel Casino & Spa, and Hard Rock Hotel & Casino Atlantic City.<\/p>\n<\/p><\/div>\n

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U.S. District Judge Karen Williams. Photo: New Jersey State Bar Association <\/figure>\n<\/p>\n<\/div>\n

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Plaintiffs were represented by Lite DePalma Greenberg & Afanador of Newark, New Jersey, along with Burns Charest in Dallas, Texas, and Susman Godfrey in Houston and Seattle. Plaintiffs lawyers in the case did not respond to requests for comment.<\/p>\n<\/div>\n

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King & Spalding represented Hard Rock Hotel & Casino. Latham & Watkins represented Cendyn Group. Skadden, Arps, Slate, Meagher & Flom represented the Caesars, Harrahs and Tropicana casinos. Womble Bond Dickinson represented MGM Resorts International and the Borgata Hotel Casino & Spa. Defense lawyers in the case also did not respond to requests for comment.<\/p>\n<\/div>\n

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Williams noted that the plaintiffs do not allege that the casino defendants’ proprietary data are pooled or otherwise comingled into a common dataset.<\/p>\n<\/div>\n

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Merely using the software in question does not count as a conspiracy, the judge wrote.<\/p>\n<\/div>\n

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“Plaintiffs repeatedly and emphatically emphasize that the casino hotels ‘knowingly provided’ their ‘non-public room pricing and occupancy data’ to the Rainmaker products. As to how this data is used once it is handed over, plaintiffs do not say. But that is precisely what appears to be missing. Without it, their antitrust theory is factually and legally incomplete,” Williams wrote.<\/p>\n<\/div>\n

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In addition, Williams found the plaintiffs premised their claim on allegations that the casino defendants all used the same type of pricing software. She rejected the plaintiffs’ claims that their allegations are “closely analogous” to those successfully alleged in a multidistrict litigation involving algorithm software for the apartment rental industry In re RealPage.<\/em><\/p>\n<\/div>\n

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Williams cited a ruling from Judge Waverly D. Crenshaw Jr. of the U.S. District Court\u00a0for the Middle District of Tennessee in the RealPage<\/em> case, differentiating that\u00a0suit from the Gibson<\/em> case in Las Vegas.<\/p>\n<\/div>\n

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Williams cited Crenshaw’s finding that Gibson<\/em>\u00a0was not similar to RealPage<\/em>\u00a0because in Gibson,<\/em> it was unclear whether competitors’ pricing information was a factor in the pricing recommendations generated by the defendant’s software. Meanwhile, Crenshaw wrote, in the Realpage<\/em> case there is no question that competitors’ pricing was fed into the algorithm that produced pricing recommendations.<\/p>\n<\/div>\n

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Citing the ruling dismissing the Gibson<\/em> suit, Williams wrote that “plaintiff’s failure to\u00a0plausibly allege the exchange of confidential information from one of the spokes to the other through the hub’s algorithms is another fatal defect \u2026 [and] it too compels the conclusion that there is no rim.”<\/p>\n<\/p><\/div>\n

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