US Appeals Court Revives AI Price-fixing Lawsuit Against New Jersey Casinos

A US federal appeals court has revived a proposed antitrust class action lawsuit accusing major casino operators in Atlantic City, New Jersey, of using an artificial intelligence-powered revenue management platform to coordinate hotel room prices and allegedly overcharge guests.

The 3rd US Circuit Court of Appeals allowed the lawsuit to move forward after finding that consumers had presented sufficient allegations that the casinos may have used shared pricing software to facilitate anti-competitive behaviour.

The lawsuit claims that casino operators, including Caesars Entertainment and MGM Resorts International, relied on an AI-based revenue management platform to help determine room rates, resulting in artificially inflated prices for customers.

The case centres on allegations that the use of algorithm-driven pricing systems allowed competing casino hotels to align their rates without direct communication, potentially violating US antitrust laws. Similar legal challenges have emerged across industries over concerns that pricing algorithms could enable companies to co-ordinate prices and reduce competition.

The casino operators have denied wrongdoing and argued that using the same third-party software does not amount to an unlawful agreement to fix prices. A lower court had previously dismissed the case, but the appeals court’s decision now allows the plaintiffs to continue pursuing their claims.

The ruling highlights growing legal scrutiny over the role of artificial intelligence and automated pricing systems in competition law, as regulators and courts examine whether businesses can use algorithms in ways that undermine fair market competition.

Note: I have kept the legal allegations qualified with terms such as alleged, accused and claims in line with court-reporting standards.

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