Atlantic City casino hotels have been met with an influx of guest-room price-fixing lawsuits after an initial suit led defendants to arm themselves with heavyweight law firms like Skadden, Arps, Slate, Meagher & Flom; King & Spalding and Jones Day. At the heart of these legal battles is ‘Rainmaker’, an algorithm used by the casinos to optimize revenue from hotel rooms. However, claimants allege that this practice contravenes antitrust laws.
Two new class action lawsuits were filed against the casino hotels on Monday, intensifying scrutiny on the controversial use of revenue management algorithms in the hospitality industry.
Data reported to the New Jersey Casino Control Commission, according to the lawsuits, exhibit significant increases in room revenue even as occupancy rates decline and gaming revenues show only modest growth. These figures, plaintiffs argue, provide a compelling case for their assertions.
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