Third Circuit Revives Atlantic City Casino Price-Fixing Class Action Over AI Software Use

A federal appeals court has breathed new life into a proposed class action that accuses several Atlantic City casino-hotels and software firm Cendyn Group of using an AI-powered platform to artificially inflate room rates. The US Court of Appeals for the Third Circuit overturned a district court's October 2024 dismissal of the complaint, allowing the antitrust suit to proceed.

The plaintiffs—Karen Cornish-Adebiyi, Luis Santiago, and Monica Blair-Smith—allege that the casinos fed Cendyn’s Rainmaker platform with non-public, real-time data on pricing and occupancy. The AI system then processed that information alongside rival properties' data to generate pricing recommendations, which the hotels allegedly followed roughly 90 percent of the time. This coordination, the suit claims, kept room prices high while reducing the risk of any single property undercutting the others—a violation of Section 1 of the Sherman Act.

Defendants named in the lawsuit include Caesars Entertainment and its Atlantic City brands (Caesars, Harrah’s, and Tropicana), MGM Resorts International with Borgata Hotel Casino & Spa, Hard Rock International with its Atlantic City property, and Cendyn Group.

US District Judge Karen Williams had originally dismissed the case, ruling that the plaintiffs failed to adequately show how the hotels used the confidential data after it reached Cendyn or that an actual agreement existed among the competing properties. However, Circuit Judge Theodore McKee, writing for a panel that also included Judges Restrepo and Smith, found the allegations sufficient to support a plausible inference of conspiracy. The panel stated that “AI software can facilitate collusion by enabling competitors to coordinate prices and share information without ever communicating with each other.”

This Third Circuit decision diverges from a Ninth Circuit ruling in August 2025, which upheld the dismissal of a similar class action against Las Vegas casino-hotels that used the same Cendyn software.

Christopher Cormier of Burns Charest, representing the plaintiffs, said the ruling “applies established legal principles in a common-sense way to modern technologies” with the capacity to cause widespread harm to competition and consumers.

The case now returns to the district court for further proceedings.