A federal appeals court has revived a proposed antitrust class action accusing major Atlantic City casino operators of using AI-powered pricing software to coordinate hotel room rates and charge customers more.
The 3rd US Circuit Court of Appeals in Philadelphia ruled Wednesday that the plaintiffs had presented sufficient claims for the lawsuit to continue under federal antitrust law. The decision reverses an October 2024 ruling by US District Judge Karen Williams, who said the plaintiffs had failed to establish how the hotels used allegedly confidential information after providing it to software developer Cendyn.
The case centers on Rainmaker, Cendyn’s revenue management platform. According to the plaintiffs, hotel owners supplied the system with sensitive internal information, including real-time pricing and occupancy figures. Rainmaker then used AI-assisted algorithms to generate pricing recommendations.
Appeals Court Allows Technical Evidence
The plaintiffs argue that the system enabled competing casino hotels to coordinate room prices without communicating directly. The appeals court said they should have an opportunity to obtain technical evidence that could clarify how the software operated and whether it supported the alleged coordination.
The panel wrote, “AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other.”
The ruling gives the proposed class action another opportunity to establish its allegations through further proceedings. It also conflicts with a separate ruling involving casino customers in Nevada.
In August 2025, the San Francisco-based 9th US Circuit Court of Appeals dismissed a similar lawsuit brought by casino customers in that state. The different outcomes give courts competing approaches to allegations involving AI-based pricing systems and antitrust law.
The New Jersey case focuses on whether Rainmaker and the information supplied to it could support an unlawful pricing arrangement among competing hotel operators.
Casino Operators Face Renewed Scrutiny
The lawsuit names major casino companies operating in Atlantic City. Representatives from Cendyn, Caesars Entertainment, and a couple of other companies did not immediately respond to requests for comment.
The plaintiffs’ attorney, Christopher Cormier of Burns Charest, welcomed the ruling. He said the appeals court had applied existing antitrust principles to technology that could affect competition and consumers across major parts of the economy.
Cormier said the 3rd Circuit’s ruling “applies established legal principles in a common-sense way to modern technologies that have the capacity to cause widespread harm to competition and consumers across vital segments of the economy.”
The revived case will allow plaintiffs to pursue evidence concerning Rainmaker and how participating hotels allegedly supplied and used pricing information. The appeals court did not establish that the casino operators violated antitrust law. It allowed the allegations to proceed so plaintiffs can seek additional technical evidence.
The dispute raises a broader legal question over automated pricing technology: whether competing businesses can face antitrust liability when software helps generate coordinated pricing recommendations without direct communication.
Source:
“US court revives lawsuit claiming AI software fueled price-gouging by New Jersey casinos”, reuters.com, July 29, 2026
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