Several prominent hotel and casino firms based in Atlantic City have been allowed by a court to merge multiple lawsuits presented against them earlier. The basis of these lawsuits over the years was claiming that these major gambling providers participated in anticompetitive behavior. This, allegedly, caused a steady increase in the Atlantic City hotel room prices since 2018. Play NJ reported that US District Court Judge Karen Williams permitted the amalgamation of three class action lawsuits aimed at a collection of six Atlantic City casinos. The ruling was in response to a request submitted by the plaintiff.
The consolidated lawsuit named as defendants are Hard Rock International, Caesars Entertainment, and MGM Resorts International. In addition, the Cendyn Group is also cited in the legal claim. The group is recognized for its “sale and marketing of a system for pricing algorithms”. The lawsuit alleges that the defendants procured a proprietary program from Cendyn Group, which facilitated them to “synchronize, collaborate, and set supra-competitive room pricing.”
The accused conspiracy is said to have continued since 2018, leading up to the present date, hiking up hotel room rates across Atlantic City. The plaintiffs contend that the accused six casinos violated the Clayton Antitrust Act in addition to the Sherman Antitrust Act.
Lawsuit Claims Room Occupancy Affected by Price Surges
Backed by evidence gathered from the Division of Gaming Enforcement, New Jersey’s gambling authority, the plaintiffs maintain their claims. The evidence suggests that since 2017, room occupancy in Atlantic City’s hotel casinos has shown a consistent drop. In 2017, the hotel occupancy rate was 87%, which subsequently fell to 81% in the following year. This dipping trend continued and by 2019, the rate had decreased to 79%; followed by 62% and 68% in 2020 and 2021 respectively. The data revealed by DGE shows that in 2022, the occupancy rate was at 73%, which was substantially lower than what had been observed in 2017 and 2018.
The lawsuit alleges that the defendants command somewhere between 72% and 80% of the total hotel room availability in the city’s market. The lawsuit argues that having control over this significant market share allowed them to dictate exorbitant rates for their rooms.
Currently, the Borgata Hotel and Casino in Atlantic City is managed by MGM Resorts. Conversely, Caesars oversees three establishments in the city, namely Tropicana Atlantic City, Caesars Atlantic City, and Harrah’s Resort Atlantic City. Despite having sold off their property, Bally’s Atlantic City, it too was mentioned in the lawsuit.
