A Lawsuit Alleges that Casinos in AC Collaborated in a Price-Fixing Scheme for Hotel Rates
A few casinos in AC are accused of fraudulently inflating the cost of room rentals for years, according to a call-action lawsuit filed by customers.
A 109-page complaint submitted on May 9 in US District Court in NJ accuses MGM Resorts International, Hard Rock International, and Caesars Entertainment of breaking United States antitrust law. The lawsuit also names Cendyn Group, a Florida-based hospitality technology business that offers hotel owners room-booking software.
Harrah’s Resort, Caesars, and Tropicana are the three casinos in AC that Caesars runs. The city’s highest-grossing facility, Borgata Hotel Casino & Spa, is managed by MGM Resorts. The Hard Rock Hotel & Casino in AC is holding onto the second place on the market.
According to court filings, during the summer of 2018, these five casinos collectively have a market share of between 72% and 80% of the Atlantic City market.
Suit: AC Casinos Supported a Monopolistic Plan
The lawsuit alleges that the casino owners participated in a cartel that fixed, increased, and stabilized hotel room prices by utilizing Cendyn’s common pricing formula. As a result of this ongoing conspiracy, according to the plaintiffs, visitors have been forced to pay above-competitive pricing as of June 28, 2018.
The case claims that the Atlantic City casinos misled customers about how they arrived at their hotel prices by omissions, half-truths, and misrepresentations.
The casino operators have not yet replied to the court document.
Public data from the gaming authorities in NJ over that time reveals an increase in the cost of hotel rooms at AC casinos but a decrease in occupancy rates. The average accommodation cost in 2019 was $142.11, and 78.9% of rooms were occupied. With 73.4% occupancy, the typical accommodation cost $177.89 the previous year.
