Appeals Court Revives Atlantic City Price-Fixing Suit

A federal appeals court has revived an antitrust lawsuit against five of Atlantic City’s casino-hotels, ruling that guests who accuse the resorts of using shared software to inflate room rates deserve their day in court. On July 29, 2026, the US Court of Appeals for the Third Circuit reversed a lower court’s dismissal and sent the proposed class action back to New Jersey for the evidence-gathering the plaintiffs were denied.

The unanimous three-judge panel found that guests suing Borgata, Hard Rock, Caesars, Harrah’s, and Tropicana had alleged enough, at this early stage, to move forward. At the center of the case is Cendyn‘s Rainmaker, an AI-assisted revenue-management platform the casinos used to price rooms. The guests allege each property fed the software nonpublic booking and occupancy data, which Rainmaker pooled to generate recommended rates, an arrangement they say let competitors coordinate prices without ever speaking to one another.

The suit, led by named plaintiff Karen Cornish-Adebiyi, rests on the Sherman Act, the federal antitrust law that bars rivals from agreeing to fix prices. In September 2024, US District Judge Karen Williams dismissed it, ruling that the guests never explained how the casinos actually used their confidential data once Cendyn had it, a gap she found fatal to the claim.

Why the appeals court disagreed

Writing for the panel, Judge Theodore McKee found that the allegations “are sufficient to support a finding that casino-hotel Defendants have conspired to fix prices” through the shared software. The panel faulted the lower court for demanding a detailed account of how the algorithm works before the plaintiffs had seen any of its data, something they could not provide without access to Cendyn’s proprietary system.

The judges drew a careful line. They were not condemning the mere fact that competitors use the same pricing tool, but the specific allegation that Rainmaker collected rivals’ nonpublic information and used the combined pool to suggest each hotel’s rates. On those facts, the court said, there is rarely a legitimate business reason to hand competitors the benefit of commercially sensitive data.

A split with the Ninth Circuit

The decision opens a direct rift among the federal appeals courts. In August 2025, the Ninth Circuit affirmed the dismissal of a nearly identical case against Las Vegas Strip hotels that used the same Cendyn software, becoming the first appeals court to weigh in on algorithmic pricing. That case turned out differently in part because the plaintiffs dropped their conspiracy theory on appeal and never alleged the software shared confidential data among rivals. With two circuits now pointing in opposite directions, the question of when shared pricing software becomes illegal collusion looks increasingly likely to reach the Supreme Court.

Federal enforcers have already picked a side. In March 2024, the Justice Department’s Antitrust Division and the Federal Trade Commission filed a joint statement backing the Atlantic City guests, arguing that businesses “cannot use an algorithm to engage in practices that would be illegal if done by a real person.” The agencies said competitors need not talk directly to form an illegal agreement, and that setting a shared starting price is unlawful even when each hotel stays free to override the recommendation. The filing was part of a wider federal campaign against algorithmic collusion that also targets rental-housing software such as RealPage.

What it means for operators

For Atlantic City’s operators, the ruling revives years of legal and financial exposure at a moment when the market leans harder on room revenue. State gaming figures show the city’s nine casinos sold about 4.3 million room nights in 2019 at an average of $142, with occupancy near 79%. By 2025, occupancy had slipped to 71%, yet the average nightly rate had climbed to $175, the kind of fewer-guests, higher-prices pattern the plaintiffs cite as a red flag, even as competition from New York’s expanding casino market squeezes the boardwalk.

The case now heads back to New Jersey’s federal court for the discovery the plaintiffs were denied, where they will finally get to test whether Rainmaker’s data flows amount to a shared pricing engine or simply competitors independently buying the same product. For any casino or hotel group that leans on third-party revenue software, that is the fight to watch.