AI Price-Fixing Allegations: US Court Revives Lawsuit Against Atlantic City Casinos

A legal storm is brewing in the luxury hotels of Atlantic City, following a decision that has put the global hospitality and gaming industry on notice. On Wednesday, a three-judge panel of a US appeals court overturned a previous ruling, reviving an antitrust class action lawsuit against industry giants including Caesars Entertainment, MGM Resorts International, and Hard Rock International. The core of the allegation is that these companies used artificial intelligence to form an illegal price-fixing cartel, driving up hotel room costs and stifling competition.

The plaintiffs, including Karen Cornish-Adebiyi, Luis Santiago, and Monica Blair-Smith, claim that the casino operators used software provider Cendyn Group’s Rainmaker platform as a vehicle for coordination. Instead of setting prices independently based on market demand, the hotels allegedly fed non-public, real-time data regarding room pricing and occupancy into the algorithm. This practice reportedly allowed the AI to generate pricing recommendations that maximized profits for all participants while eliminating the risk of being undercut by competitors.

Numbers and facts

The statistical evidence presented in the case is particularly striking. According to the legal filings, the hotel operators accepted the AI-generated pricing recommendations approximately 90 per cent of the time. This consistency allowed the companies to maintain elevated rates without significant competitive friction. The properties involved include iconic landmarks such as Caesars, Harrah’s, Tropicana, MGM’s Borgata Hotel Casino & Spa, and the Hard Rock Hotel & Casino Atlantic City.

The lawsuit is grounded in Section 1 of the Sherman Act, the foundational antitrust law in the United States. Circuit Judges Restrepo, McKee, and Smith of the Third Circuit Court of Appeals in Philadelphia determined that the allegations were sufficient to support a plausible inference of conspiracy. Judge Theodore McKee noted the unique threat posed by modern technology:

„AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other.“ - Theodore McKee, Circuit Judge at the US Court of Appeals for the Third Circuit

Background

This case has already seen a reversal of fortunes. US District Judge Karen Williams had initially dismissed the complaint in October 2024. At the time, she found that the plaintiffs had failed to demonstrate how the hotels utilized the confidential data once it was provided to Cendyn. Furthermore, she saw no evidence of an explicit agreement between the competing properties. However, the appeals court disagreed, ruling that at this stage of litigation, the plaintiffs only need to show a plausible scenario of collusion facilitated by the shared data pool.

Interestingly, this ruling diverges from an August 2025 decision by the Ninth Circuit Court of Appeals. In that instance, a similar class action against Las Vegas casino hotels using Cendyn software was dismissed. The contradiction between the two circuits highlights the legal uncertainty surrounding AI-driven pricing. Christopher Cormier of Burns Charest, representing the plaintiffs, described the ruling as a common-sense application of law to technologies that have the capacity to cause widespread harm to consumers.

Why it matters for German players

For German players engaging with platforms licensed by the GGL (Gemeinsame Glücksspielbehörde der Länder), the Atlantic City hotel market may seem distant. However, the case touches on the fundamental integrity of digital gambling ecosystems. In Germany, the State Treaty on Gambling 2021 (GlüStV 2021) imposes strict regulations that largely prevent this type of dynamic manipulation. For example, the 1,000 Euro monthly deposit limit and the 1 Euro per spin limit on virtual slots act as rigid barriers against the erratic pricing or algorithmic exploitation seen in unsupervised markets.

The legal scrutiny of AI algorithms in the US serves as a warning for the global industry. In Germany, the GGL whitelist ensures that only operators who adhere to strict transparency rules can offer legal services. Any attempt at data-driven collusion to disadvantage players would result in the immediate revocation of the German license. German consumers should remain vigilant and only play at sites listed on the official whitelist, where national authorities monitor operations to protect against algorithmic manipulation.

What it means for GGL-licensed casinos

Casinos operating under a German license must have their IT systems and algorithms audited for compliance. The Atlantic City case demonstrates that using third-party software does not exempt an operator from competition law obligations. If German providers were to use AI to synchronize bonus terms or odds without respecting the data protection rules of the GlüStV 2021 or GDPR, they would face heavy fines. The transparency required by the GGL is a safeguard against the "silent collusion" described in the US ruling.