Did Atlantic City Casinos Secretly Team Up to Raise Hotel Prices? Court Revives Lawsuit

The United States Court of Appeals for the Third Circuit has reinstated an antitrust lawsuit accusing Atlantic City’s casinos of conspiring to fix hotel room prices, overturning a federal district court’s dismissal of the case.

A three-judge panel in the Philadelphia appellate court unanimously ruled that the proposed class of plaintiffs should have been given the chance to gather technical evidence regarding its claims through a discovery phase. In 2024, New Jersey US District Court Judge Karen Williams dismissed the lawsuit, saying the plaintiffs failed to demonstrate how the casinos allegedly colluded to maximize room rates.

The case, led by lead plaintiff Karen Cornish-Adebiyi on behalf of the proposed class, alleges that by using the same Cendyn Rainmaker software, a cloud-based, AI-assisted revenue and profit optimization platform that helps hotels set room rates, the casinos engaged in price-fixing. The complaint alleges that five of the nine casinos violated antitrust laws, namely, the Sherman Act, which prohibits companies from conspiring to monopolize or attempting to monopolize a market.

Borgata, Hard Rock, Caesars, Harrah’s, and Tropicana are named as defendants.

Case Proceeds

This week’s Third Circuit decision came as a surprise, as a similar price-fixing lawsuit filed in Nevada against Las Vegas casinos was similarly thrown out in August 2025. Third Circuit Judges Theodore McKee, L. Felipe Restrepo, and D. Brooks Smith opined that the plaintiffs should be privy to the Cendyn Rainmaker data used by the Atlantic City casino defendants before a motion to dismiss is considered.

In the original complaint, the plaintiffs alleged that each casino shared confidential booking data with Cendyn Rainmaker, such as room reservations for a given weekend. The software aggregated that information and generated optimized room rates for participating casinos. According to the lawsuit, the arrangement amounted to an unlawful conspiracy to fix hotel room prices in violation of federal antitrust law.

Williams said the complaint lacked evidence. Writing the opinion, McKee questioned the lower judge’s quick decision.

“The District Court required plaintiffs to plead with more specificity how the algorithm functions to facilitate the exchange of information. This is tantamount to expecting Plaintiffs to explain how Cendyn’s proprietary software works without affording the discovery required to do that,” McKee wrote.

“At this stage of litigation, such level of detail into the software’s operations is neither required nor appropriate. Thus, at this stage, Plaintiffs have sufficiently alleged that a material exchange is likely occurring and facilitating collusion,” the order explained.

The appellate ruling remands the case back to New Jersey’s District Court for further proceedings, including a discovery phase.

Fewer Visitors, Higher Rates

In 2019, Atlantic City’s nine casinos sold nearly 4.3 million hotel room nights at an average nightly cost of $142. That year, the nine casinos collectively experienced a room occupancy rate of 79%.

In 2025, the room occupancy rate for the same nine casinos was just 71%. The resorts sold 3.9 million room nights, but at a nightly average rate of $175.