A federal appeals court has revived an antitrust lawsuit alleging that several major Atlantic City casino-hotels conspired to inflate hotel room prices using AI technology. The Third Circuit Court of Appeals, overturning a 2024 decision by the U.S. District Court for the District of New Jersey, ruled that There’s enough evidence to pursue the case further.
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Allegations of AI-Facilitated Price Fixing
According to the plaintiffs, Karen Cornish-Adebiyi, Luis Santiago, and Monica Blair-Smith, the Atlantic City casinos, alongside software provider Cendyn Group, utilized AI software to share non-public data and coordinate pricing. They allege that Cendyn’s Rainmaker platform processed real-time data on room pricing and occupancy from the hotels and their competitors. The software then generated pricing recommendations, which were reportedly followed around 90% of the time, effectively allowing the casinos to maintain high room rates. This action is claimed to violate Section 1 of the Sherman Act. Caesars Entertainment, with its properties Caesars, Harrah’s, and Tropicana; MGM Resorts International’s Borgata Hotel Casino & Spa; and Hard Rock International’s Hard Rock Hotel & Casino Atlantic City are all named in the lawsuit. Cendyn Group, the provider of the Rainmaker software, is also a defendant.
Court’s Rationale and Diverging Decisions
Previously, U.S. District Judge Karen Williams dismissed the suit, citing insufficient evidence showing the hotels’ use of the shared data to coordinate pricing. And however, Circuit Judge Theodore McKee, writing for the panel, argued that the plaintiffs presented a plausible case, highlighting how AI technology enables collusion without direct communication among competitors. This ruling contrasts with a decision by the Ninth Circuit in August 2025, which dismissed a similar lawsuit against Las Vegas casino-hotels using the same Cendyn software. The appellate court’s decision underscores ongoing debates about AI’s role in potential anti-competitive practices.
Legal and Industry Implications
Christopher Cormier, representing the plaintiffs, applauded the ruling, stating it applies established legal principles to modern technologies that could harm competition. He noted that AI’s capability to enable coordination among competitors raises major concerns. Industry analysts have pointed out that while AI can optimize revenue management, its use in setting prices collaboratively raises regulatory alarms. The case now returns to the district court for further proceedings, underscoring the legal uncertainties surrounding AI and competitive practices in industries.
What’s Next?
The lawsuit now heads back to the district court for trial. Stakeholders are watching closely, as a decision will impact how AI technologies are utilized in pricing strategies across sectors. A court date has yet to be set. Industry watchers will be keen to see whether this case sets a precedent for future antitrust actions involving AI.
Garry Sputnim is a seasoned journalist and storyteller with over a decade of experience in the trenches of global news. With a keen eye for uncovering stories that resonate, Alex has reported from over 30 countries, bringing light to untold narratives and the human faces behind the headlines. Specializing in investigative journalism, Garry has a knack for technology and social justice issues, weaving compelling narratives that bridge tech and humanity. Outside the newsroom, Garry is an avid rock climber and podcast host, exploring stories of resilience and innovation.
