Third Circuit Revives Atlantic City Casino Antitrust Suit Over Shared Pricing Software
The Third Circuit revived Cornish-Adebiyi v. Caesars Entertainment, an antitrust class action claiming Atlantic City casino-hotels coordinated prices via Cendyn’s Rainmaker software. The court rejected common defenses on staggered adoption, 90% compliance rates, and plus factors like sustained high rates amid falling occupancy. This creates a circuit split on algorithmic pricing antitrust claims.
SCCG Take — This ruling marks a structural shift increasing litigation risks for operators using shared revenue platforms. Expect greater antitrust scrutiny and the need for careful implementation reviews.
The US Court of Appeals for the Third Circuit has revived a class action alleging that several Atlantic City casino-hotels used common revenue management software to coordinate hotel room prices. The decision in Cornish-Adebiyi v. Caesars Entertainment overturns the District of New Jersey’s dismissal, finding that plaintiffs plausibly alleged an agreement sufficient for the case to proceed. This creates a split among federal appellate courts on antitrust treatment of algorithmic pricing platforms.
Court’s Rejection of Prior Dismissal Grounds
The suit centers on Cendyn’s Rainmaker platform, which plaintiffs say used confidential hotel data to generate pricing recommendations shared across competitors. The Third Circuit rejected the argument that staggered adoption of the software over years precluded collusion claims. It held that a reported compliance rate of around 90 per cent with pricing suggestions could support an inference of coordinated conduct, even where operators could override the recommendations.
The court also ruled that plaintiffs need not detail the proprietary algorithm’s inner workings at the pleading stage, as such information would emerge in discovery. Allegations of sustained higher room rates despite declining occupancy were accepted as a “plus factor,” alongside marketing statements about avoiding price wars. As reported by G3 Newswire, the ruling diverges from several earlier decisions in comparable algorithmic pricing cases.
Where the Risk Lies
While the Third Circuit stopped short of deeming algorithmic pricing software inherently unlawful, the decision will increase scrutiny on shared platforms and strengthen challenges where competitors rely on common tools for pricing recommendations. After decades observing the intersection of technology and competition law in regulated industries like gaming, this represents an inflection point for how operators assess these systems. Client-partners should anticipate more litigation testing the line between efficiency and coordination, particularly as discovery unfolds.
Reporting: US appeals court revives Atlantic City hotel pricing software antitrust case (g3newswire.com)
Algorithmic pricing platforms now carry measurable litigation risk — expect more scrutiny on shared pricing tools across gaming.
We've placed revenue management systems in dozens of properties globally. This ruling changes the calculus: shared platforms that worked quietly for years are now antitrust targets. Operators using common pricing tools need immediate compliance reviews, and vendors must rethink how data flows between competitors. The Third Circuit just raised the cost of efficiency.
- Third Circuit ruled 90% compliance with shared pricing recommendations can support collusion claims
- Court rejected staggered adoption and algorithm opacity as dismissal defenses
- Creates circuit split, signaling more litigation and DOJ scrutiny on algorithmic pricing
SCCG angle: SCCG connects operators to compliance counsel and alternative revenue management providers we've vetted across 545 partnerships. If you're running shared platforms, we help you audit exposure and pivot to defensible architectures before discovery starts.
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