A federal judge in New Jersey has ordered the consolidation of similar complaints accusing several Atlantic City casinos of illegally inflating hotel room rates for years.
US District Court Judge Karen Williams granted a plaintiff’s request to merge three proposed class action claims against six Atlantic City casinos and their parent companies for allegedly “conspiring” with a hotel booking software supplier to raise room rates.
The claimants accuse the casinos and the tech firm of violating antitrust laws and causing customers to overpay for rooms since 2018.
Atlantic City casinos, tech company named in court docs
Caesars Entertainment, MGM Resorts International and Hard Rock International – in addition to Cendyn Group, a Florida-based hospitality technology company providing room-booking software to hotel operators – are named as defendants.
The companies have not publicly responded to the proposed class-action claims.
Caesars operates three casinos along the Jersey Shore: Caesars Atlantic City, Harrah’s Resort Atlantic City and Tropicana Atlantic City. Before selling the Boardwalk property in 2020, Caesars Entertainment operated Bally’s Atlantic City, which is why its name also appears in the suits.
MGM oversees Borgata Hotel Casino & Spa, the city’s highest-grossing property. Second behind Borgata: Hard Rock Hotel & Casino Atlantic City.
Combined, the casinos have controlled between 72% and 80% of the market since June 2018, according to court documents. Hard Rock and Ocean Casino Resort (not named in any complaints) both opened on June 27, 2018.
The plaintiffs allege “tens if not hundreds of thousands” of customers could be part of a class action. They are seeking unspecified compensatory and triple damages under federal antitrust laws and a jury trial.
The case mirrors ongoing legal action in Nevada, where a similar complaint was filed against Las Vegas casino hotels. Casino operators have requested the case in Nevada be dismissed.
Is AC casino industry data the smoking gun?
According to court documents, the casino operators and Cendyn engaged in an anticompetitive scheme resulting in guests paying “supra-competitive prices.”
Publicly available financial and industry data published by the NJ Division of Gaming Enforcement shows an increase in Atlantic City casino hotel room rates. However, properties saw a decline in occupancy rates during the period in question.
In 2019, the average room rate was $142.11 and the occupancy rate was 78.9%. By 2022, the average room went for $177.89 with 73.4% occupancy.
“The numbers reveal substantial increases in room rates and revenue coupled with marked decreases in occupancy rates, while casino gaming revenue from the same period increased at a much lower rate,” the antitrust suit says.
The AC casino industry’s fourth-quarter and end-of-year data for 2023 has not yet been released.
The matter is scheduled to continue via teleconference on Feb. 21, according to court records.
