Four leading Las Vegas Strip resort operators have requested that a US court of law dismiss a suit claiming that they had engaged in price-fixing. The class action lawsuit, submitted in January, accused Caesars Entertainment, MGM Resorts International, Wynn Resorts Holdings, and Treasure Island—which oversees twenty-six of the thirty-three resorts situated on the Strip or nearby—of unlawfully exchanging data through a revenue management software program to artificially inflate the costs of their hotel rooms.
Attorneys representing these four companies and Cendyn Group—the Florida-based creator of the revenue management platform, Rainmaker—filed a motion on March 27th stating that the two plaintiffs in the case had not provided any direct proof to show that the platform was used to induce collusion.
In a statement released to the Las Vegas Review-Journal, Steve Berman—the managing partner of the plaintiffs’ law firm, Seattle-based Hagens Berman—noted that the motion to dismiss was expected.
“The defendants in this case will attempt every tactic in the book to avoid accountability,” Berman said. “But we are confident that the facts are against them.”
The Alleged Collusion
The plaintiffs’ lawsuit blames Rainmaker for the alleged collusion, which is employed by ninety percent of the Strip’s hotels. The lawsuit claims that the software, Guestrev, studies current pricing and room supply info and then artificially decreases supply so as to maximize resort profits, thereby breaking the Sherman Antitrust Act.
In a free-market, hotel operators would independently set their rates to fill up as many rooms as possible. According to the plaintiffs’ lawsuit, data shared and algorithms set through Rainmaker “supersede regular competitive pricing and lead to higher room rates.”
Hagens Berman declared in a press release that antitrust academics “unanimously disapprove of this type of pricing and supply exchange as anti-competitive.”
Four major Las Vegas Strip resort operators have asked a US court to dismiss a lawsuit accusing them of price-fixing. The class action lawsuit, filed in January, alleged that Caesars Entertainment, MGM Resorts International, Wynn Resorts Holdings, and Treasure Island—which control 26 of the 33 resorts on or near the Strip—had been using revenue management software to unfairly inflate the prices of their hotel rooms.
Attorneys representing these four companies and Cendyn Group—the Florida-based manufacturer of the revenue management platform Rainmaker—filed a motion on March 27th, arguing that the plaintiffs, two tourists, had not presented any direct evidence that the platform had led to price collusion.
“The complaint lacks all of the essential elements necessary to plead an antitrust conspiracy,” the defendants wrote in a joint motion to dismiss the US District Court of Nevada case. “The complaint does not identify a single communication between the hotel defendants, much less one that suggests a conspiracy was afoot.”
In a statement released to the Las Vegas Review-Journal, Steve Berman—the managing partner of the plaintiffs’ law firm, Seattle-based Hagens Berman—expressed that the motion to dismiss was anticipated.
“The defendants in this case will employ every tactic to avoid responsibility,” Berman said. “But we are convinced that the facts are against them.”
How the Alleged Collusion Works
The plaintiffs’ lawsuit blames Rainmaker, employed by 90% of Strip hotels. It claims that Rainmaker’s proprietary software, Guestrev, analyses real-time pricing and room supply information, then artificially suppresses supply, maximizing resort profits in violation of the Sherman Antitrust Act.
In a competitive market, hotel operators price rooms independently, filling as many rooms as possible. According to the plaintiffs’ lawsuit, information shared and algorithms set through Rainmaker “displace normal competitive pricing and lead to increased room prices.”
Antitrust academics “unanimously condemn this type of price and supply exchange as anti-competitive,” Hagens Berman stated in a press release.
