Court Revives Antitrust Lawsuit Over AI-Priced Hotel Rooms in Atlantic City

A federal appeals court has revived a proposed class action against major Atlantic City casino operators, clearing the way for antitrust claims that allege an AI-driven hotel pricing system helped coordinate room rates and inflate costs for guests.

The ruling, issued Wednesday by the 3rd US Circuit Court of Appeals in Philadelphia, reverses an October 2024 dismissal by US District Judge Karen Williams. The lower court had found the plaintiffs failed to show how the New Jersey hotels used the allegedly confidential data after submitting it to Cendyn's Rainmaker platform.

The appeals panel disagreed, concluding that the plaintiffs deserve the opportunity to gather technical evidence about how the software functions. In its opinion, the panel said "AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other."

The lawsuit centers on Rainmaker, a revenue management system developed by Cendyn. Participating hotels provided real-time occupancy and pricing information to the platform, which then used AI-assisted algorithms to produce rate recommendations for the properties. Plaintiffs argue this amounted to an unlawful information-sharing arrangement among competitors.

The decision creates a split with the 9th US Circuit Court of Appeals, which dismissed a similar Nevada casino case in August 2025. The conflicting rulings mean the question of how federal antitrust law applies to AI pricing tools may ultimately require Supreme Court review.

Christopher Cormier of Burns Charest, an attorney for the plaintiffs, said the ruling "applies established legal principles in a common-sense way to modern technologies," adding that such systems have the capacity to cause significant harm to competition and consumers across major parts of the economy.