Several major hotel-casino operators in Atlantic City are facing lawsuits that allege anticompetitive actions resulting in increased hotel room rates since 2018. US District Court Judge Karen Williams has approved the consolidation of three class action lawsuits against six casinos in Atlantic City. Defendants named in the consolidated lawsuit include Hard Rock International, MGM Resorts International, Caesars Entertainment, and Cendyn Group.
The lawsuits claim that the defendants used a program supplied by Cendyn Group to coordinate and set supra-competitive prices for guest rooms, which has led to an increase in hotel room rates across Atlantic City. The plaintiffs argue that this behavior violates the Sherman Antitrust Act and the Clayton Antitrust Act.
The plaintiffs have presented data from the Division of Gaming Enforcement, showing a decrease in room occupancy since 2017. The data indicates that hotel occupancy in Atlantic City dropped from 87% in 2017 to 73% in 2022. The plaintiffs allege that the defendants control between 72% to 80% of the share of hotel rooms in the market, which has allowed them to establish higher rates.
MGM Resorts operates the Borgata Hotel and Casino in Atlantic City, while Caesars is responsible for Tropicana Atlantic City, Caesars Atlantic City, and Harrah’s Resort Atlantic City. The lawsuit also includes Bally’s Atlantic City, which was sold by Caesars.
The consolidation of these lawsuits signals a significant legal battle for the hotel-casino operators in Atlantic City. The allegations of anticompetitive behavior and price fixing could have far-reaching implications for the industry in the region. The defendants will need to mount a robust defense against these claims, as the outcome of this legal battle could have a substantial impact on the future of hotel room rates and competition in Atlantic City.