Lawsuit accuses hotels of not-so-fabulous price fixing in Las Vegas
A lawsuit filed in the Nevada Federal Court has alleged Caesars Entertainment Inc, Treasure Island LLC, Wynn Resorts Holdings LLC and MGM Resorts International of using shared pricing algorithms to set their room rates.
A spokesperson for MGM Resorts labelled the allegations as “factually inaccurate”, and said the company would be vigorously defending itself in court.
Caesars Palace, Harrah’s, Wynn and MGM Grand are among the more than 20 hotels run by the company’s accused.
“What happens in Vegas will no longer stay in Vegas,” lawyer Steve Berman said in a statement.
“We intend to expose the under-the-table deals perpetrated by these Vegas hotels, and we intend to hold them accountable.”
The lawsuit says a company called Rainmaker “collects confidential price information from each of the hotel operators, and then tells them, through use of various algorithms, how to price.”
The complainant is seeking an unspecified amount for damages to “tens of thousands if not hundreds of thousands” of people.
The former acting chairperson of the Federal Trade Commission, Maureen Ohlhausen alluded to the practice in a speech in 2017.
She said the practice was like the old fashioned hub-and-spoke conspiracy.
“In effect, the firms themselves don’t directly share their pricing strategies,but that information still ends up in common hands, and that shared information is then used to maximize market-wide prices.”
According to the Las Vegas Review-Journal, the average daily room rates on the strip hit record highs in 2022, topping US$200 a night.
Two former employees of Rainmaker claim the system is used by more than 90% of hotels in the city.
It is estimated the Las Vegas Strip attracts 42 million visitors a year.
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